This article was written by Tom Cuggino
This article was published in Baseball’s Business: The Winter Meetings: 1958-2016
The 2014 major-league season ended with the San Francisco Giants winning their third World Series in five seasons, beating the Kansas City Royals in a dramatic seven-game series on the shoulders of a staggeringly dominant performance by their 25-year-old southpaw, Madison Bumgarner.
The Giants had established themselves as the decade’s model franchise, the Royals emerged from almost three decades of obscurity, and both succeeded despite the absence of high-priced household free-agent names on their rosters. This extended what had in recent years become a new tone of operational thinking, focusing on more organic organizational development.
This would have a profound impact at that year’s Winter Meetings, held at the Hilton San Diego Bayfront Hotel during the week of December 7-10. It was the first time in nearly 30 years that the event had been held in “America’s Finest City,” and the surrounding dynamics would not disappoint.
The week kicked off with the game’s annual awards banquet, which followed the first day’s workshop on the business of baseball. The Bob Freitas Workshop Series was again a staple of the week, covering a broad array of topics from sales and marketing to media and community relations. The format for this workshop had recently changed from a ballroom setting to a series of smaller rooms with speakers on special topics to encourage more productive communication.
Also featured was the PBEO Job Fair, which entered its 21st year and continued to offer opportunities for prospective industry job-seekers to meet directly with team executives. Just as the majority of the leagues’ player transactions occur during this week, most of the hiring for its 400-plus internships and full-time positions is cemented at this venue. The Trade Show on opening night, and the Gala on the final night, mark the bookends of the event, offering a spectacular and festive display of exhibits, merchandise, and networking for all involved.
Just before the meetings it was becoming clear that after turning themselves into one of baseball’s most competitive teams, the Oakland A’s were now in the process of shedding some of their best talent in exchange for very little experience but smaller salaries. The first to go was All-Star third baseman Josh Donaldson, who was dealt to the Toronto Blue Jays for infielder Brett Lawrie, left-hander Sean Nolin, right-hander Kendall Graveman, and utilityman Franklin Barreto; Donaldson would go on to win the AL MVP Award the coming season.
The A’s traded another 2014 All-Star, first baseman-outfielder Brandon Moss, to the Cleveland Indians for second baseman Joey Wendle. Completing a difficult week for the A’s fan base, the team lost right-handed starter Jason Hammel to the Chicago Cubs via free agency. This rendered Oakland one of the biggest losers of the winter, a trough from which they would not quickly recover. It would also partially reduce GM Billy Beane’s hard-earned stature as the artful champion of “Moneyball,” which had still not brought a World Series to the East Bay during his tenure.1
Along with Moss, other 2014 All-Stars who found new homes during the week. Catcher Miguel Montero and right-hander Jeff Samardzija headed to different sides of Chicago as the Cubs and White Sox became two of the biggest winter winners in their aggressive rebuilding quests. Montero was signed as a free agent by the Cubs to a three-year, $40 million deal after a solid eight-year stint with Arizona that included a pair of All-Star Game appearances. Samardzija, a former standout wide receiver at Notre Dame, would return to the Windy City after having spent the second half of 2014 in Oakland following a July trade that brought shortstop Addison Russell to the Cubs.
Samardzija now found himself once again the centerpiece of a multiplayer deal as he and a one-time top prospect, right-hander Michael Ynoa, were sent to Chicago’s South Side to anchor the White Sox starting rotation; the A’s, in turn, received infielder Marcus Semien, catcher Josh Phegley, right-hander Chris Bassitt, and minor-league utilityman Rangel Ravelo.
The White Sox continued their pursuit of mound help with short- and long-reliever acquisitions. They added free-agent right-hander Dave Robertson as their closer for the next four years at $46 million, then traded right-hander Andre Rienzo (a native of Brazil) to the Marlins for left-handed middle reliever Dan Jennings. Robertson, after seven effective seasons with the Yankees as both a set-up man and closer, was made available after New York opted for a higher-profile closer, signing left-hander Andrew Miller away from the Orioles before the meetings.
While Robertson had established himself as a respectable closer with 39 saves and a 1.06 WHIP in 2014, Yankees GM Brian Cashman was betting instead on a lethal righty/lefty late-inning combination of budding star Dellin Betances and Miller, who would be converted from the set-up to the closing role in the Bronx in 2015. Betances was coming off a spectacular rookie season (5-0, 1.40 ERA, 13.5 strikeouts per nine innings, 5.63 strikeouts per walk), while Miller, after a rather subpar beginning to his major-league career in Detroit and Miami, had put it all together in 2014 with a 0.80 WHIP and 14.9 strikeouts per nine innings for the Red Sox and Orioles.
Arguably the most active team of the week was the Miami Marlins, who were largely unsuccessful in wooing their not-so-faithful to the new ballpark they had opened in 2012. Marlins GM Michael Hill first executed a multiplayer deal with the Los Angeles Dodgers that primarily brought righty Dan Haren, second baseman Dee Gordon, and platoon infielder Miguel Rojas to South Florida for fellow platoon infielder Enrique Hernandez and southpaw Andrew Heaney.2
The next day the Marlins acquired a workhorse, prying 26-year-old right-handed pitcher Mat Latos away from Cincinnati for right-handed prospect Anthony DeSclafani and minor-league catcher Chad Wallach. In his first six seasons in the majors with the Padres and Reds, Latos had thrown over 900 innings and won 60 games, but had been somewhat rushed back to the rotation by the Reds in 2014 after arthroscopic knee surgery.
The Marlins assumed that a healthy and productive Latos would eventually provide a formidable one-two punch with their budding phenom, right-hander Jose Fernandez. A particularly unfortunate ending to this plan unfolded over the next two seasons, though, as injuries continued to erode Latos’s velocity, and Fernandez was killed in a boating accident in September 2016 at the age of 24.
Having already lured Joe Maddon to manage the team, the Chicago Cubs then landed one of the most significant free agents off the market when they signed left-hander Jon Lester to a seven-year, $155 million deal at the end of the week.3 The arrangement reunited Lester with his former Red Sox GM, Theo Epstein, who was in the thick of his most ambitious effort yet in building the Cubs from the ground up. Until this point, Epstein had not had the luxury of the near-blank checkbook he enjoyed in his prior role with Boston, but new Cubs owner Tom Ricketts had begun to show signs that the team was ready to take the next step in adding some high-end payroll. The move would pay off two years later, with Lester as the staff ace on the squad that finally brought a World Series banner to the North Side of town after a 108-year drought.
The bid from the Red Sox to regain Lester, whom they had swapped to Oakland at the 2014 trade deadline, fell about $20 million short. GM Ben Cherington opted instead to pursue mid-rotation assets Wade Miley, a left-hander and Rick Porcello, a righty.
Boston also rolled the free-agent dice to bring back oft-injured right-hander Justin Masterson, their former second-round draft pick who had been traded to the Indians five years before. Miley was acquired in a trade with Arizona that cost right-handers Rubby De La Rosa and Allen Webster and minor-league infielder Raymel Flores. Porcello came from the Tigers in exchange for emerging Cuban star outfielder Yoenis Cespedes (acquired in midseason from Oakland in the Lester deal), right-handed middle reliever Alex Wilson, and minor-league southpaw Gabe Speier. The results were mixed: Masterson was released after just half a season in Fenway, Miley was traded to the Seattle Mariners after one season, but Porcello (after inking a four-year, $82 million contract despite a subpar 2015) won the Cy Young Award for the Red Sox in 2016 after posting a 22-4 record, 3.15 ERA, and a league-leading 5.91 strikeout-to-walk ratio.
The Red Sox had also signed third baseman-first baseman Pablo Sandoval for six years ($107 million) and infielder-outfielder Hanley Ramirez for five years ($110 million) prior to the meetings, making them a popular pick to go from worst to first again, just as they had done from 2012 to 2013.
Apart from the Masterson signing, perhaps the single riskiest free-agent move of the week came from the Dodgers’ landing right-hander Brandon McCarthy for four years and $48 million. McCarthy finished 2014 strong after being traded from the Diamondbacks to the Yankees (7-5, 2.89 ERA, 6.3 strikeouts per walk in his final 14 starts), but was already 30 years old and hadn’t won more than nine games in any prior season. He appeared in just 14 games the next two seasons at Chavez Ravine, and proved to be just one of several shaky moves made by Dodgers general manager Andrew Friedman.
In addition to the trading away of Dee Gordon, he swapped a still-productive Matt Kemp to the Padres a week later following nine productive years, then signed 36-year-old Jimmy Rollins to be their everyday shortstop, all of which left the Dodgers as one of the winter’s losers. Friedman had been named Executive of the Year in 2008 after making the Tampa Bay Rays an AL pennant winner despite having the second-lowest payroll in all of baseball ($43.8 million), and now, having been successfully wooed by the Dodgers, found himself managing a $235 million budget in an attempt to overtake the Giants.
It’s also worth noting two other top free-agent signings of the winter, although they did not take place during the meetings themselves. Outfielder Giancarlo Stanton decided to stay with the Marlins, an easy decision when they offered a record 13years and $325 million. Just 25 years old, the 6-foot-6, 245-pound Stanton had all the makings of becoming the LeBron James of baseball, yet in his first five full seasons none of his stats had been eye-popping except for how hard he hit the baseball. (His exit velocity was regularly above 100 mph, often at launch angles of around 20 degrees, an enticing combination of bat speed and strength.) He had, however, also come off a nearly catastrophic season-ending injury after being hit in the face with a fastball by the Brewers’ Mike Fiers in September, making the magnitude of this contract quite risky.
Meanwhile, right-hander Max Scherzer signed with the Washington Nationals for a comparatively diminutive $210 million over seven years. Coming off two consecutive years as the AL leader in wins while with the Tigers, Scherzer had collected 230 strikeouts or more in each of the prior three seasons and had won the Cy Young Award in 2013. In his first season with the Nats, 2015, he struck out 16 Brewers in a 4-0 shutout, and then in his next start tossed a no-hitter, coming within single strike of a perfect game against the Pirates. The following season he became just the fourth pitcher in history to strike out 20 batters in a nine-inning game, punishing his former Tigers team in the process, and eventually winning another Cy Young Award. The Nationals, no doubt, consider their investment in Scherzer to be money well spent.
The game also continued to evolve off the field that winter, starting at the top, where baseball was changing commissioners for the first time in 20 years. Bud Selig had manned the post since late in 1992, and though the labor strife of 1994-95 was a black mark on his record, he also was instrumental in reorganizing the leagues and introducing interleague play, playoff expansion, the implementation of instant replay for umpiring decisions, and the creation of the World Baseball Classic. He had also introduced a revenue-sharing model to the game, a concept that had helped lower-payroll franchises bid for free agents, creating more parity in the majors. He was elected to the Hall of Fame in 2016.
The torch was now being passed to Rob Manfred, a Harvard lawyer who had been MLB’s chief operating officer since 2013. He had represented baseball owners during the 1994 strike, and negotiated the game’s first drug-testing program in 2002. It was clear that one of Manfred’s charges would be to provide a firmer stance against the use of performance-enhancing drugs (PEDs) than had his predecessor. Baseball’s drug-testing program became among the most stringent in professional sports. Upon failing a test, players are suspended for half the season without pay, and there are over 100 banned substances and stimulants on its radar.
Manfred would also oversee changes to the All-Star Game, primarily by ending its role as the determinant of home-field advantage in the World Series, and also leveraging a bidding process among cities to host the game each year. He also helped streamline player recruitment from Cuba, which for more than two generations had endured stringent restrictions due to the enmity between the U.S. and Cuba. Despite a concentration of talent few countries could match, only 95 Cuban players had played in the major leagues since the U.S. imposed sanctions against Cuba in 1961. New relaxed regulations would introduce potential new stars like Yasiel Puig, Jose Abreu, and Yoan Moncada. Also under consideration was the banning of the infield shift, as well as the inclusion of a 20-second pitch clock to speed up games.
From a legal standpoint, baseball was also dealing with a major antitrust issue related to how the sport divides up its broadcast territories. A class-action lawsuit known as Garber v. Office of the Commissioner of Baseball accused MLB of violating the Sherman Antitrust Act with its blackout and television policies, effectively giving teams monopolies in their territories.
The blackout rules are unpopular with fans, but are critical to MLB’s operating model. Teams are able to generate sometimes hundreds of millions of dollars in local television revenue by offering regional cable networks exclusive local telecast rights. If the policy were struck down in court, each team would have to renegotiate its local contract, which would cost millions of dollars in broadcast fees.
After U.S. Appeals Court Judge Shira A. Scheindlin ruled that baseball’s historic antitrust exemption did not apply to the case, it was allowed to proceed to trial.4 The practical issue at hand for the fans was the lack of ability to watch a game of their choice while outside the market to which they have subscribed. If a fan in Boston, for instance, had subscribed to NESN to watch the Red Sox, and then found himself in Seattle for the weekend wanting to stream his team over the internet, he felt entitled to do so because he had already paid for the privilege. Major League Baseball, however, felt that the customer should have to pay a surcharge for watching the game anywhere outside New England.
Perhaps a more pitiful example was that of someone in Iowa who would be part of the “home market” for no fewer than six teams. That person would arguably have been a fool to subscribe to MLB Extra Innings or MLB.TV, which were intended to give customers a multitude of live games, as long as the games did not include a team within their market. The Iowan would have no luck seeing the Cubs, White Sox, Brewers, Royals, Twins, or Cardinals without getting access to local noncable channels from those markets.
Perhaps because technology and customer mobility made it very possible that the case would be decided in favor of the consumer, compromise prevailed a year later when the case was settled out of court just moments before the trial was scheduled to commence. While the blackouts would continue, MLB.TV subscribers would gain a 15 percent saving on their package, at least through 2020. Comcast and DirecTV would also offer a 12.5 percent discount on MLB Extra Innings through 2017.
MLB was also battling a team relocation case brought about by the city of San Jose, California, which was contesting the league’s antitrust claims in preventing the Oakland A’s from moving to the city. The Supreme Court, in rejecting San Jose’s appeal of an adverse ruling from the US Court of Appeals, cited previous exemptions granted to the majors, which only a high court or Congress could change.5 MLB lawyers indicated to the Supreme Court that San Jose was asking to unravel “a question that has been firmly settled for decades.” While San Jose is about equidistant from both Oakland and San Francisco, it is deemed by MLB to be Giants territory.
Even on the minor-league front a legal battle was brewing, as a federal suit, Senne v. Office of the Commissioner of Major League Baseball, was filed on behalf of 34 plaintiffs in the Northern District of California alleging violation of wage and hour laws. Players signed to minor-league contracts are paid far less than their major-league counterparts; the highest Triple-A salary at the times was $10,750 over the course of about 1,296 hours, or about $8.29 per hour. The case ultimately was closed on July 21, 2016, in favor of Major League Baseball, sustaining minor-league pay at its relatively paltry levels.6
When all was said and done, the 2014 Winter Meetings had become a big part of one of the game’s most unusual offseasons in recent years. Two small-market teams, the Padres and Marlins, were in the middle of it all, adding high-profile players, while the one that typically operates in a different financial stratosphere, the Yankees, were relatively dormant. Chicago had also suddenly rendered New York and Los Angeles second cities, with both teams jockeying to shake off what had been generally losing cultures for over half a century. In a minor subplot, Yankees third baseman Alex Rodriguez was also readying his return after being suspended for the entire 2014 season for taking a multitude of PEDs and then lying about it. A-Rod was hoping to continue his pursuit of the 3,000-hit milestone, as well as fourth place on the all-time home-run list. Opening Day 2015 couldn’t arrive fast enough.
Consulted in addition to those cited in the Notes:
Baseball-Reference.com, Major League Statistics and Information. baseball-reference.com.
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Fucilli, David, February 11, 2016. sbnation.com/mlb/2016/2/11/10966352/mlb-tv-lawsuit-settlement-details-extra-innings-mlb-tv-packages-cheaper.
Glazer, Adam J., March 29, 2017. sfnr.com/news/2017/4/12/minor-leaguers-have-ninth-inning-rally-have-chance-for-minimum-wage.
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Stark, Jayson, December 12, 2014. espn.com/mlb/story/_/id/12015896/mlb-winter-meetings-winners-losers.
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1 Beane was nonetheless promoted to executive vice president of baseball operations after the 2015 season.
2 Right-hander Chris Hatcher and utilityman Austin Barnes also moved from Miami to Los Angeles. Gordon, who led the NL in triples (12) and stolen bases (64) in 2014 along with earning an All-Star Game appearance, went on to swipe 58 more and lead the NL in hitting (.333) the following season. Haren spent just half the 2015 campaign in Miami before being moved to the Cubs in a minor midseason trade and retiring after a 13-year career.
3 The acquisition was then supplemented by adding Lester’s “designated catcher,” David Ross, to a two-year, $5 million contract.
4 Shira A. Scheindlin, September 14, 2002, scholar.google.com/scholar_case?case=13043734529765955884&q=garber+v.+office+of+the+commissioner+of+baseball&hl=en&as_sdt=6,34&as_vis=1.
5 Howard Mintz, October 5, 2015, mercurynews.com/2015/10/05/san-jose-loses-legal-fight-against-mlb-over-oakland-as-plan/.
6 Josh Norris, July 22, 2016, baseballamerica.com/news/major-league-baseball-scores-win-minor-league-litigation/#TFxfC8otCfA6GkIo.97.