Cheap Labor

by on December 14, 2010 · 0 comments

Before any of you get any bright ideas, I’m most definitely NOT talking about Meg Whitman’s housekeeper.  Instead, I’m actually referring to the cheap labor that most major league teams rely on to round out their rosters after they throw millions of dollars at superstars, stars, and established veterans. 

The current system works to keep most players from receiving a significant share of the revenue pie until they have played a minimum of 3 years.  As it currently stands, players have 3 years of what is considered “pre-arbitration”.  After that 3 year period, they have up to 3 years of arbitration.  So a player can play for as long as 6 years prior to reaching free agency for the first time.  There are scenarios under which a player can reach free agency prior to that point, but they usually are the result of bad things happening to good people.  So, just how cheap are those years?  Well, the minimum salary in 2010 for a rookie was $400,000.  The salaries for the 2nd and 3rd years increment slightly from there, so a rookie in 2010 can expect to earn just over $1.2M in his first 3 years.  Depending on his performance, arbitration may be offered, or the player and team may work out a deal to avoid arbitration.  Either way, it’s not uncommon for a player to make $5-6 million for the 3 years during which he is arbitration-eligible.  Remember, I’m talking about an average bench player and not a star.  Need some reference points?  Fine. 

Albert Pujols made $200K, $600K, $900K, $7M, $11M, and $14M for years 1-6 respectively, and he was undoubtedly a superstar from day 1.  Even so, he only made $1.7M his first 3 years combined.  Compare him to someone like Aaron Miles.  Miles made $300K, $326K, $350K, $1M, $1.4M, and $2.2M for years 1-6 respectively.  Big difference.

Imagine the 2010 Cardinals without what I consider the “cheap labor”.  That eliminates guys like Colby Rasmus ($418K), Jason Motte ($411K), Mitchell Boggs ($402K), Blake Hawksworth ($402K), Allen Craig ($400K), David Freese ($400K), Jaime Garcia ($400K), Brendan Ryan ($425K), and Kyle McClellan ($425K).  That list includes the starting CF, starting SS, starting 3B, the #3 starter, and a substantial portion of the bullpen all for less than $4M in 2010. 

When a team starts to bump against the payroll ceiling, the front office may have to start making tough choices.  An unproven young player may be given a 2nd or 3rd chance in favor of signing a veteran free agent bench player, because the cost differential is simply too great.  This may explain Tyler Greene being in St. Louis for 2011.  He hasn’t had much success at the big league level, but he’s familiar with how things work in St. Louis, and he’s an inexpensive option. 

As the trend towards a very top-heavy payroll continues, I see “cheap labor” becoming increasingly more important.  Short term deals like the ones for Berkman and Westbrook have an upside, but they do raise some concern about sustainability.  So, how will the Cardinals manage to stay competitive while paying top dollar for guys like Pujols and Holliday?  I’d say the answer to that question lies with one man.

Jeff Luhnow.  Ever heard of him?  He was originally hired in October of 2004 to be the Vice President of Baseball Development for the Stl. Cardinals.  In a press release announcing his hire from the business realm, the team stated:

“In his new position, Luhnow will oversee the design, development and implementation of systems and tools that will be used in strategy, scouting and player development as a means to aid the team in its evaluation of players at all levels including the Major Leagues, Minor Leagues, amateur and international levels.”

Uh, what?  The “systems and tools” part sounds like some sort of torture facility.  Is waterboarding involved?  Nope, just some sabermetrics (which might be just as bad to some).  One of Luhnow’s first moves was to hire Ron Shandler’s company, Baseball HQ which is highly touted as one of the best sabermetrics evaluation shops in the game.  In 2006, Luhnow became VP of Amateur Scouting and Player Development.  Somewhere in between 2004 and today, Luhnow managed to become quite possibly the team’s best kept secret.  Check out portions of some of his drafts:

If the Cardinals are going to continue to push the payroll into uncharted territory, the pressure on Mr. Luhnow to refresh the system with “cheap labor” is going to increase.  Let’s all hope that he keeps picking the right numbers on draft day.

Cardinals fan since I could hold a fishing pole steady. Accidental blogger. Opinionated. I could care less about what you think of me. Constantly confounded, bemused, and confuzzled (ie I'm a pc and a mac). I'm an IT infrastructure analyst with a penchant for breaking tech toys. I ate a sabermetric primer for breakfast. I love playing "All-powerful GM of MLB". The 2010 Cardinals represented a good, practical definition "cognitive dissonance". The 2011 version got by on duct tape and a prayer, and I'm fine with that. They just need new tape for #12 in 12.
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