Phillies business model part four: predicting free agency
by Scott Butler 7/8/13

We have reached article number four on the Phillies business plan. I already discussed the value of a business plan, how the Phillies ignored a plan by trading too many prospects, and why Ruben should have traded Howard, Utley, or Rollins. Through their actions, the Phillies created the team you see today: old, expensive, and ineffective. 

Ruben Amaro not only allowed his core to age, but he made matters worse by adding more elderly players. In 2009, he elected to replace Pat Burrell with 37-year-old Raul Ibanez to a three year deal which would make him 39 in 2011. When he needed a third baseman in 2010 he signed a 34-year-old Placido Polanco who would be 36 in 2012. He reasoned in both cases that he wanted to offer two years, but in order to get his guy he needed to add an additional season. He didn’t have to do anything. I’m no business genius, but to me intentionally wasting a year on a contract is not a good deal.

You could argue that either acquisition was the best option available at the time, but this brings us back to the importance of having a business plan that drives your decisions and maintains your focus on the horizon. A business plan could have helped them avoid a position where they were forced to sign a contract they were not comfortable signing. While no team has control over which players become free agents, teams can do their best to predict the potential free agent market.

Predicting free agency is by no means an exact science, but teams know when players can become eligible for free agency, which teams don't have the money to retain high priced players (think Tampa Bay), which players/agents are more likely to test free agency (think Madson/Boras), and teams with potential replacements within their organization (think Ryan Howard and Jim Thome).

Any good business plan is constantly looking at the future landscape. If the Phillies correctly predicted the market for left fielders would be weak prior to 2009 or the third base market would be poor before 2010, they would have had a greater chance to pick up a better player and sign a more favorable contract.

A few recent examples demonstrate the importance of valuing the market. In a strong market for closers after the 2011 season, Ryan Madson signed for one year/$8.5 million instead of the 3+ years and $10+ million he wanted. In a weak market for centerfelders last year, BJ Upton signed for an inflated contract of 5 years at $15 million per season and Shane Victorino signed for 3 years at $13 million per season. By making your position of need the same position where there are a plethora of quality free agents, you have competition on your side for favorable contracts.

Let's use third base as an example of how that can be accomplished. The Phillies knew after the 2008 season that they had one more year with Pedro Feliz and no prospects in their system to fill his shoes. If they recognized the third base market would be weak for 2010, they could have rearranged their roster to accommodate for it.

In that situation, maybe they could have traded Utley or Rollins for David Wright, trading talent for talent. Assuming the free agent market was better at second or shortstop, they could then pursue a more favorable trade.

It is just another example of the many missed opportunities by Ruben Amaro and maybe the entire Phillies organization.

But sometimes mistakes can be a great thing. As a former teacher, I embraced and almost encouraged mistakes, as they are the best way to improve. Buy the wrong house, marry the wrong person, start the wrong business, draft the wrong pitcher, or even choose the wrong toothpaste, and you probably won’t make the same mistake twice.

Before the Phillies make any trade deadline decisions and before they prepare to move into rebuilding mode, they have less than a month to develop their new business plan.  It is time to gather the entire Phillies franchise in a room, lock the door, and decide on their organizational philosophy, their core values, and their vision for the next decade. Then, and only then, will the Phillies create the next best era in Phillies history.

In the fifth and final article, we will look at what moves the Phillies should or should not make at the deadline with the 2013 Phillies.

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