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Some Thoughts on the Mark Shapiro Interview

On Wednesday, Fox Sports Ohio’s Pat McManamon published a long and incredibly thorough interview with Cleveland Indians President Mark Shapiro on his background, some of the team’s recent moves, and what it’s like to run a baseball team. The full interview is over 6,000 words and is an absolute must-read for any Tribe fan, but I wanted to highlight a few passages that are of particular significance to how the Indians operate and what we should expect from the team in the future.

One of the first team-related issues Shapiro addressed was the so-called “perception problem” in Cleveland about the team’s financial stadium, and the idea that putting a good team on the field will end up paying for itself:

The biggest perception issue is probably the simplest one, which is we’re still to some extent always viewed in the backdrop of those ‘90s teams, when in reality that was a completely different business model. Those (Indians) teams were literally the Red Sox, the Cubs, the Dodgers. We were top five in payroll, as high as three. And our revenues generated that.

So I think there’s that general public sentiment that, ‘Hey if you win enough people will come.’ But that’s not necessarily true. We had a unique set of circumstances.

There was a new ballpark. That’s a huge multiplier. We hadn’t won in 40 years. That’s a multiplier. There was no football team in town. That magnified our revenues. The one that gets overlooked a lot is the industry was coming off a strike, so all of our revenues were amplified because all the other teams’ revenues were significantly tamped down at that point. So ours were amplified. Our spending power was amplified on the free agent market. And the city was economically in a better place. There were four Fortune 500 companies that were here that are no longer here.

From Photobucket, by Tony Lastoria

One could quibble about how much of an impact each of these effects really had, but the fact of the matter is that things in 2012 aren’t the same as they were in 1995. Progressive Field isn’t shiny and new anymore (though I still maintain that it’s one of the nicest stadiums in baseball). The Browns are back, and they don’t seem to have much trouble getting people to their games no matter how poorly they play. I’m not sure how much of a difference the economy really makes—the Cleveland metropolitan area has nearly 3 million people so I’m guessing there are a substantial number of people who can still afford to come down to The Prog on a regular basis—but yes, there’s a new set of challenges that makes it harder to bring people to the ballpark.

It’s hard to argue that winning doesn’t necessarily boost attendance after this season—the lack of butts in seats at Progressive Field when the Indians were in first place for the first couple months was downright embarrassing. But what about the other half of the cycle? Do increased revenues drive on-field success?

I think more people will come. But the challenge is 2.2 million instead of 1.6 million doesn’t change the way we operate. Even that extra 500,000, 600,000 people, even if that’s $10-to-15 more million in revenue a year . . . one win in free agency is $9 million. So you’re not going to change the context. Again, I don’t think people want to intellectualize baseball, and I don’t believe you should have to intellectualize baseball . . . and we’ve made a conscious decision in most of our interviews not to get into these topics and just stay positive and talk about what our aspirations are.

But that revenue swing between 1.5 million in attendance and 2.2 million in attendance . . . meaningful dollars but not dollars that will have us plan dramatically different.

That $9 million-per-win figure is fascinating—the general consensus around the sabersphere is that a win costs somewhere around $5 million (FanGraphs had it at $4.5 million for 2012). But Shapiro makes a great point. Even using the lower cost estimate, the extra revenue works out to at most about three more wins a season, at which point the 2012 Indians still would have lost 91 games.

Speaking of payroll, what about the accusations that the Dolans aren’t putting enough money into the team?

The one thing that I do feel terrible about for our owners, and is unfair, is that our owners have spent at revenue or beyond revenue. And the few times they’ve made a profit they’ve put the money right back into the club the entire time they’ve owned the team. Our challenge has been amount of revenue, not whether they spent it or not. The model I think sometimes is asked of them, to deficit spend $20, $30, $40 million to get us into the average payrolls, there is no model of that beyond one team in all of baseball (Detroit). I’m not sure owners are out there that do that, that are willing to lose. The Yankees don’t do that, the Red Sox don’t do that, the Cubs don’t do that. They’re not losing $30 or $40 million a year.

If Shapiro is right about these figures (I certainly trust him), then the popular perception of the Dolans is completely off the mark. It’s a sobering thought that Tribe is stuck in a small-market rut, but once you accept the premise that a moderate payroll bump won’t do much in terms of winning or attracting fans there really isn’t much you can do besides dream about an owner so wealthy that he or she would have no problem losing tens of millions of dollars a year—say, the Magic Johnson model.

Another highlight from the interview was a glimpse into the front office’s decision-making process:

We don’t use those conventional stats. We use our own methodology. It does factor subjective and scouting information and makeup and personality and character and all those things in. In the end you’re adding up and trying to determine how many wins that player impacts when you bring him on board. That’s what you’re trying to figure out.

This is something that outsiders (myself included) regularly fail to appreciate. There’s a tremendous wealth of information publicly available for any given player—advanced stats, scouting reports, videos—but the data isn’t as good as what the teams are working with. Chris Antonetti doesn’t look at the same stats Tom Hamilton and Paul Hoynes do, and according to Shapiro’s cost-per-win figure even the team’s sabermetric stats are quite different than the ones on FanGraphs and Baseball Prospectus. That doesn’t mean their system is always right or that outsiders don’t have enough information to make informed opinions. What it does mean is that what seems like a questionable decision from a fan’s perspective probably makes more sense using the information the team has at its disposal.

Finally, Shapiro directly responded to frustrated Cleveland fans:

I understand and appreciate some of the negative thoughts. I feel like we need to be better. All I can tell you is that we are driven to do that. There are a bunch of people in here who are sleeping five hours a night who are working 80 hours a week who care, who want the same thing the fans want, who are working tirelessly to make sure that happens. Who take accountability for our mistakes but also ensure that we are learning from them and that we’ll get better as we go forward. I really feel its better than it felt at the end of the year right now. And starting pitching is key to us getting back to us a championship type team.

Cliché? Sure. But the point stands: The team is working hard to get better. It’s harder than it looks to run a Major League Baseball team, and a bad year isn’t a reflection of ineptitude or apathy.

Again, I highly recommend reading the full interview. It’s an incredible glimpse into the mind of a front office executive, and it’ll make you feel good about the people running the team.

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