The GM Revolution
A young generation of general managers are testing conventional baseball wisdom as they make their marks in front offices around the Majors
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Epstein wore an elegant white shirt, untucked, and had the first stirrings of a goatee on his chin. He looked ready to walk onstage with an electric guitar. Instead, he'd just put a pitcher on the disabled list and signed a hitting instructor. On a similar day the previous summer, he'd traded fan favorite Nomar Garciaparra to the Chicago Cubs. Over the winter, he'd ended the bidding on future Hall of Famer Pedro Martinez, who escaped to the Mets. Then Epstein took a flyer on the portly David Wells.
As the general manager of the Red Sox, Epstein is responsible for the personnel decisions for the team that won the 2004 World Series and led the American League East for nearly all of 2005. He is 31 years old.
Epstein is the extreme example in a new wave of baseball executives: decision-makers with the attributes of investment bankers or lawyers. Instead of thousands of innings accumulated watching ballplayers at every level, this new breed has high SAT scores and degrees from prestigious universities. They are blessed with nimble minds and knowledge of other disciplines, and are challenging the conventional wisdom of how to effectively build and run a baseball team. And because almost nobody like this existed in baseball until quite recently, they are younger than nearly all of the executives they're supervising—and many of the players, too.
The day he was named to his position in late 2002, Epstein became the youngest general manager in baseball history at 28. He was also one of the least qualified—or one of the most qualified, depending on the criteria. He had an American Studies degree from Yale and experience as a sports editor of the Yale Daily News. He had law school in the on-deck circle. But he hadn't played baseball past high school.
A Renaissance type, Epstein could have been working on Wall Street or writing a novel. Instead, he'd chosen baseball. He seemed so young, so callow, that it was no surprise to learn that he'd been driving a car for only five years. Jay Leno joked that the new GM had been held over a balcony by Michael Jackson.
The summer after Epstein's youthful ascendance, Michael Lewis's Moneyball was published. The book detailed the unorthodox (for baseball, at least) thinking of Oakland general manager Billy Beane, a former Major Leaguer who had come to trust statistical analysis more than empirical observation, then constructed teams that overperformed considering their limited payrolls. Together, Epstein and Moneyball caused a crisis of confidence among career baseball men—"a bunch of old guys sitting around in windbreakers," as former Baltimore Orioles owner Edward Bennett Williams once called them—who did things a certain way because that was how they had always been done.
The baseball lifers were scared. For decades, they'd been operating under the rarely questioned belief that nobody could truly understand their game without playing it at the highest level. What really mattered in baseball, they believed, was unquantifiable. The only way to evaluate a player was to watch him play and match what you saw against your mental snapshots of decades' worth of similar players.
This seems strange, if you think about it. Of all the sports, baseball requires the longest time for the talents of standouts and scrubs to separate themselves. Any untrained observer could see within five minutes that Michael Jordan at the height of his career was the best player on a basketball court. Neither a varsity football letter nor a Yale degree was necessary to ascertain that Jim Brown ran the football better than other mortals; a single handoff sufficed. But in baseball, even a three-game series might not be long enough to glimpse the historic talent of, say, Barry Bonds. He could go 2-for-10 with three strikeouts even as some marginal Major Leaguer happened to bang out seven hits and make a game-saving grab. It would all mean nothing. As anyone who follows the game even superficially understands, it's the accumulation that counts.
But if you make your living evaluating talent, your mandate has always been to know something the statistics skimmers at home don't know—can't know. So you flew to Augusta or Amarillo and noted how the player carried himself, how confident he seemed at the plate, how he took his cuts. You assumed—you knew—that such attributes could predict his success better than statistics. Nobody could just come off some college campus with an American Studies degree and see that special something. If someone really wanted to be able to see it, he'd be better off not going to college at all.
For decades, such an empirical approach served to limit the pool of men who made the personnel decisions for big-league teams. Outsiders, no matter how intelligent, didn't bother to apply. Judging baseball talent was positioned as a special skill, unique to the profession. A pianist might have the hands to play Chopin, but did that mean he could build a house? But now here came Beane's computerized evaluations, and the high-SAT backgrounds of Epstein, the Los Angeles Dodgers' Paul DePodesta and the Cleveland Indians' Mark Shapiro: brainy, young executives who had been promoted all the way to GM having barely worn a batting helmet. If some Harvard graduate could run a baseball team just as easily as he could run a hedge fund, the lifers were out of luck.
You couldn't have a baseball conversation for much of 2003 and 2004 without someone pushing you to take sides. "Moneyball became a buzzword," says Toronto Blue Jays general manager J. P. Ricciardi, who has a standard-issue baseball background—6 years on the field as a minor-league player and coach followed by 16 years scouting or supervising scouts—but helped undermine the established order while working for Beane in Oakland. "And Theo was Moneyball with money. People attack countries with the budget he has."
Then Epstein's Red Sox won the World Series. All of a sudden, this wasn't a theoretical discussion involving a book someone had written, and kids who didn't know a fastball from a fungo. Now this was about winning at the highest level. And if there's any tradition in baseball as strong as maintaining the established order, it is the slavish copying of success. Soon, nearly every Major League team was out trolling for an Epstein of its own, even as the original advised against imbuing his success with undue meaning.
"I'd be careful separating into groups and slapping labels, because it isn't 'us against them,'" Epstein says now, but it's far too late. The door has swung open wide and the college kids with the shiny resumés are streaming through. For better or worse, baseball may never be the same.
The first thing that must be understood is that Theo Epstein isn't Billy Beane. Beane was a Major Leaguer, albeit a not particularly successful one. When he walks into the Oakland clubhouse, author Lewis notes, he earns respect as the best athlete in the room. Beane moved directly from a stellar high school career to the minors. His path to the front office was traditional, though he has used very untraditional means of evaluating talent since arriving there.
Unlike Beane, Epstein can be best understood as the personification of a gradual move by the baseball industry toward the business practices of other industries. "Baseball people look at the bottom line differently," says Paul Godfrey, a former head of the Municipality of Metropolitan Toronto and publisher of the Toronto Sun who now serves as the chief executive officer of the Toronto Blue Jays. "'Best practices' was never part of the nomenclature."
When Godfrey arrived in baseball in 2000, he found an industry different from any he'd known. "Baseball is so traditional," he says. "After every out, if there's nobody on base, they've got to throw the ball around. Everybody's got to touch it, like it's some mystical thing, though there's absolutely no reason why they should. In the same way, I don't think that even today half the organizations in baseball are run the way someone would run their private business, which is what earned them the money to buy a team in the first place. Baseball teams are looked at with a different set of principles. To me, that's a ridiculous situation."
Godfrey should have seen baseball in the 1960s and 1970s. It was run more on the level of a YMCA than a major industry. At the time, player salaries were in line with those of middle-management executives. Ticket prices were affordable for any kid with an allowance. Marketing meant throwing the doors open and announcing that the season had started, perhaps giving away free bats to turn a Saturday afternoon into an event. Sponsors were limited to exposure on radio broadcasts. "It was a game that was a little business," says John Schuerholz, the general manager of the Atlanta Braves. "Now it's a big business that's also a game. And the realization has occurred around the industry that perhaps we need some different types of people running it."
Schuerholz was the first of them. In 1966, he was working as an English and geography teacher in Baltimore County when he wrote to Jerrold Hoffberger, who ran the Orioles. Schuerholz had played baseball at Towson State, and had known and loved the game as a fan and participant. His letter expressed hope that his perspective might possibly be helpful. Astonishingly enough, the Orioles agreed. They offered an entry-level job, and Schuerholz accepted. It wasn't as if he was getting rich teaching world capitals to eighth graders.
Years later, Schuerholz would be named general manager of the Kansas City Royals at age 41, which made him younger than every other Major League general manager, and one of the very few who hadn't played the game professionally or grown up in a baseball management dynasty. He'd win a World Series in Kansas City in 1985, then move to Atlanta and begin an unprecedented run of 14 consecutive division championships, including 2005. When you consider the rapid player turnover of the free-agent era, Schuerholz can be considered the most successful baseball GM in history.
At the start, though, he was simply an anomaly. For a time, he worked in the Orioles scouting department under Charlie Metro, an archetypal baseball man, who had set notions and his blue windbreaker and wondered what this erstwhile schoolteacher could possibly understand. Once, Schuerholz sent out minor-league requisition forms. Metro questioned the act. "What uniform did you ever wear?" he asked Schuerholz. "I was unaware that putting on a baseball uniform made you smarter," Schuerholz responded. So Metro fired him.
In 1981, the same year that Schuerholz was named the Royals' general manager, Sandy Alderson left a law practice to become team counsel of the Oakland A's. Alderson was a Dartmouth graduate with a Harvard Law degree who'd served in the Marines for four years, including a tour in Vietnam. "I went to the A's with the notion that I could always come back," says Alderson, who is now a CEO with the San Diego Padres.
Two years later, he was the A's general manager, working for a friend, owner and fellow attorney Roy Eisenhart, with baseball veterans Bill Rigney and Karl Kuehl at his side. "I really wasn't doing any player evaluation at the time, nor did I have any handle on how to do it," says Alderson. He kept his mouth shut, dressed down so as not to look like a lawyer, and fantasized that he might be the first of a new breed. "I thought maybe there could be a new prototype, people with law backgrounds who could be more proficient in business issues. That turned out not to be the case."
Alderson was proficient enough. From 1988 to 1990, his A's won three American League pennants. Beyond that, he brought a real-world perspective to the sometimes fantastical doings of the industry.
Others saw the value in this. When Edward Bennett Williams was running the National Football League's Washington Redskins for Jack Kent Cooke in the early 1970s, he'd brought in Larry Lucchino, an attorney specializing in sports law, to help. When Williams cashed out of the Redskins to buy the Baltimore Orioles in 1979, Lucchino, a graduate of Princeton and Yale Law School, moved with him. "Williams told me he'd rather reach into the pool of people who'd been selected by his law firm than use traditional baseball people," Lucchino says. "It was a different breed of cat, a better skill set."
By 1988, Lucchino was the Orioles' president, with equity in the team and a general manager below him. He'd hold the same position with the Padres—where he'd try to hire Beane to be his baseball man—and then with the Red Sox. He hasn't played baseball since helping Taylor Allderdice win Pittsburgh's high school championship, but that's fine. In Lucchino's case—and nearly every case—the line of demarcation remained firm into the 1990s. There were lawyers and businessmen to do the law and business, and baseball people to do the baseball.
If a Theo Epstein had come along then, carrying the same Yale degree and obvious intelligence, the existing schemata of Major League Baseball would have offered little hope. "He would have seen that the environment in the industry did not exist for an opportunity to succeed," says Schuerholz. "And he would have been smart enough to have gone to work in another industry."
But baseball was changing. For one thing, the men sitting across the table from Lucchino, Schuerholz and Alderson during contract negotiations were now the furthest thing from baseball men. In the 1980s, a new breed of professional agent had emerged. "Very few had the slightest bit of baseball experience, yet they were certainly evaluating talent," Lucchino says. "So it was getting more difficult to criticize the guy sitting on the other side of the table for having no baseball experience."
And the business of baseball was evolving. "As the franchise values went up, the stakes got higher," says Mark Shapiro, the Indians' general manager. "Some owners recognized that they should have people running this business that held themselves to the same standard as the people running their other businesses."
As a job applicant, Shapiro's only connection to baseball was tenuous, and as much negative as positive: his father, Ron, was one of those agents who'd helped blow player salaries sky-high. Shapiro had attended Princeton and played football as an undersized lineman. In 1992, he left a budding career as a property developer to work in the front office of the Indians, the worst team in baseball.
He was hired by John Hart and Dan O'Dowd, traditional baseball men who had the groundbreaking notion that it was harder to teach a baseball lifer the requisite economic understanding than to hire somebody young and certifiably smart, show him the business, and surround him with baseball minds. "They believed in me and gave me responsibility almost right away," Shapiro says. And why not? They couldn't do worse than they'd been doing.
The Indians implemented a strategy of tying up young players to long-term contracts, then praying that they'd picked the right ones. Shapiro wasn't the architect; necessity was, as interpreted by Hart. But Shapiro had played a major role in the decision-making process and, as farm director, in evaluating baseball talent. When the Indians won the American League pennant in 1995, he began to get noticed.
Then Hart left for Texas and O'Dowd for Colorado, and Shapiro was elevated to the general manager job in 2002. By then, he was 33. He'd earned the reputation as not simply smart, but a smart baseball man. Part of that came from knowing when to challenge established notions, and when to defer to them. "There's still plenty of resistance to someone like me in this industry," he says. "In order to manage people effectively, you'd better be aware of it. You have to have respect for tradition—and the traditional baseball people—or you aren't going to get far."
He'd already started to seek out future executives in the same mold, the next generation of Mark Shapiros. In most cases, they had no connection to the game at all. But Shapiro believed that didn't matter. "Why limit yourself?" he says. "Get the best candidates out there. Sometimes the best guy is going to be a Billy Beane, but sometimes it's a Georgetown grad."
Those young protégés of Shapiro began, ever so slowly, to populate the industry. For a college senior typing up his resumé, it offered a glimpse of the possible. Paul DePodesta was one of them. Arriving at Harvard in the fall of 1991, he'd had his future planned. Asked for some sense of what he might like to major in, he handed his freshman adviser his schedule for the next four years. "Time slots, all the classes I was going to take, everything," he says. "And the guy stared at it, flipped it over to the back, then looked at me and said, 'Where's law school?'"
Such certainty melted away as college progressed. Senior year, DePodesta interviewed with banks and consulting firms, but found himself wondering about his passion for such professions. Looking for something different, he decided to send letters to sports teams, only to wind up with a pile of rejections on nice stationery. Finally he landed an unpaid internship with a Canadian Football League team, the Baltimore Stallions. In the Stallions office, he happened across Alderson's bio in an A's media guide. "I'm looking at it, and I see, 'Dartmouth, Harvard Law, and now he's GM of the A's,'" DePodesta says. "He didn't play the game, he had a similar background to me. That was the first time it hit me, that I could actually give this a try."