Camden Depot: Overrated, Expensive, Central And South American Prospects

[weams]

http://camdendepot.blogspot.com/2015/10/expensive-central-and-south-american.html

The Orioles are well known for their complete and utter disinterest in using their international signing bonus pool to sign prospects from Central and South America. Baseball America claims that the Orioles spent the least of all teams in 2013 and second lowest in 2014. Orioles? fans are concerned by this because about one-sixth of all top 100 prospects as ranked by Baseball America from 2010-2015 fell into this category and therefore the Orioles not taking full advantage of their bonus pool would seem to hurt their efforts to build a top farm system. This begs the question of how the most expensive, and therefore highest ranked Central and South American prospects, perform when compared to prospects drafted in the normal draft.

Warning, some data, math, and unpopular world views ahead.

MLB should consider new rules making it illegal to draft players younger than 18 to ensure more predictable results. Until this occurs, the Orioles and other clubs should realize that the international market as it currently is formulated isn’t efficient and therefore should make their biggest investments on coaching, scouting and data while spending less money on actual players. It would appear that the most expensive prospects have a minimal return and therefore teams should focus on second-tier international prospects that have less hype and will be considerably less expensive.

[weams]

When I started this analysis, I thought it would indicate that Central and South American prospects are a tremendous bargain and that spending in this area would give clubs a huge advantage. Instead, it appears that breaking their budgets has resulted in them receiving the equivalent of a few extra second or third round pick

More unpopular data.

[weams]

Cuban players and Asian foreign professionals are exempt from the international signing bonus pool and therefore aren’t considered in this analysis because there’s a major difference between signing a 25 year old veteran and a 16 year old prospect.

More facts.

[Can_of_corn]

How much money can be thrown at Coaching, Scouting and Data?

Not that much in the grand scheme of things.

I like how the author is surprised that signing Latin American 16 year olds is less efficient then signing 18-21 year olds that are in a structured baseball environment. Of course they are. But if you can only spend a fixed amount on the more efficient route then you should still spend on the less efficient route if it will still help you get to your eventual goal.

How about they compare the efficiency of spending money in Latin American to spending it on tier three free agents that get DFA'd part of the way through the season?

[jsbearr]

How much money can be thrown at Coaching, Scouting and Data?

Not that much in the grand scheme of things.

I like how the author is surprised that signing Latin American 16 year olds is less efficient then signing 18-21 year olds that are in a structured baseball environment. Of course they are. But if you can only spend a fixed amount on the more efficient route then you should still spend on the less efficient route if it will still help you get to your eventual goal.

How about they compare the efficiency of spending money in Latin American to spending it on tier three free agents that get DFA'd part of the way through the season?

Matt linked to the article I wrote for ESPN four or so years ago on how much you pay for performance with domestic amateurs, international amateurs, and the general free agent market. I teased those apart because teams like the Athletics were putting more relative resources into the international market than they were with the general free agent market. The Pirates and Rays operate similarly. What I found was that investing in international amateurs was not as productive as domestic amateurs (which should be obvious because the draft system breaks almost all negotiating leverage), but was more productive than spending on the free agent market (which also makes sense because immediate value tends to be more desire than eventual probable value).

Again, I think when reading these kind of endeavors it is good to see the information it provides and to think more loosely on the conjecture. Matt is not a draft or prospect guy, he is a numbers guy. We should expect him to be more solid on one thing than the other.

[Aristotelian]

If you don't buy a lottery ticket you can't win.

Another fact.

That might actually be a good analogy that argues against your point. I would never play the lottery as a core investment strategy. I might buy a ticket or two just on the chance of a high-upside event, but if the odds are against me I am not going to make a significant investment. Most of the people who put a lot of money into the lottery end up losers.

I have tended to accept the conventional wisdom that the O's are bad at the foreign markets, but I was pretty well convinced by this article that it may be a sound strategy. Definitely agree that MLB should not incentivize the system that is currently in place in the DR regardless of what the O's end up doing.

I would like to see the O's be more active in Japan and Korea, where you can at least believe a player's birth certificate and make an educated guess how they are going to do in MLB.

[Can_of_corn]

That might actually be a good analogy that argues against your point. I would never play the lottery as a core investment strategy. I might buy a ticket or two just on the chance of a high-upside event, but if the odds are against me I am not going to make a significant investment. Most of the people who put a lot of money into the lottery end up losers.

I have tended to accept the conventional wisdom that the O's are bad at the foreign markets, but I was pretty well convinced by this article that it may be a sound strategy. Definitely agree that MLB should not incentivize the system that is currently in place in the DR regardless of what the O's end up doing.

I would like to see the O's be more active in Japan and Korea, where you can at least believe a player's birth certificate and make an educated guess how they are going to do in MLB.

What if you were capped in how much you could put into your IRA and other investments and any money you didn't invest went to the ex-wife as part of the divorce settlement?

Choosing between the lottery and simply throwing the money away makes even the lottery look good.

[Aristotelian]

What if you were capped in how much you could put into your IRA and other investments and any money you didn't invest went to the ex-wife as part of the divorce settlement?

Choosing between the lottery and simply throwing the money away makes even the lottery look good.

I would still trade my lottery tickets for something of known value.

[Can_of_corn]

I would still trade my lottery tickets for something of known value.

Even if it means you only get 10 cents on the dollar?

At some point the projected returns on the lottery are better.

Remember the lottery has more then just the one big payout. You could match three numbers and and up with a trade-able commodity. Or you could match four and get a nice bullpen piece. You could even match five and get a power hitting second baseman who is adept at turning double plays.

[clapdiddy]

Someone posted a list a while ago on here on high-profile (high dollar) Latin signings. It was not favorable to big payouts.

[clapdiddy]

The thing is, most teams do a little bit of everything. Invest in the draft, invest in AAAA players, invest in proven international talent, invest in ML free agents, AND invest in the Latin America 16 year old market. If you believe that the Orioles with one of the weakest farm systems in baseball are just smarter than everyone else then I guess there's not much to argue.

http://www.baseballamerica.com/international/team-team-international-signings-tracker-2/

I tend to lean on the "more is better" side of things, but I would really like to see us go after a big name. A Soler or Sano would look awfully good on this team right now.

[Can_of_corn]

Jorge Soler. 9 years/30M. Signed through 2020. How smart does that look?

Saw this on Twitter earlier.

<blockquote class="twitter-tweet" lang="en"><p lang="en" dir="ltr">Was looking at great postseason performancess & realized that Jorge Soler's 2015 postssn OPS is .240 points higher than Daniel Murphy's.</p>— Baseball Reference (@baseball_ref) <a href="

">October 22, 2015</a></blockquote>

<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

[Aristotelian]

The thing is, most teams do a little bit of everything. Invest in the draft, invest in AAAA players, invest in proven international talent, invest in ML free agents, AND invest in the Latin America 16 year old market. If you believe that the Orioles with one of the weakest farm systems in baseball are just smarter than everyone else then I guess there's not much to argue.

http://www.baseballamerica.com/international/team-team-international-signings-tracker-2/

You are right about that. You might have a good strategy, but the execution has to be there and it has not for the O's. Still, the list in that article of the top Latin American signings is pretty shockingly bad.

http://www.beyondtheboxscore.com/2009/10/4/1069057/30-largest-latin-american-signing

Two decent players out of 31. And those signing bonuses are not just pocket change. The Twins really did hit the lottery.

[Can_of_corn]

http://www.baseballamerica.com/international/top-30-international-prospects-signed-2/

The top 30 international Latin prospects who signed this year. Zero signed by the O's. The top guys signed for 3.9M. The guys closer to the 20-30 range signed in the 500K range. We aren't talking about spending 20M bucks here. We are talking about spending 2-3M on some top 30 guys. I guess everyone else is stupid and the Orioles are the smart ones.

Well duh, just look at the farm systems.

I think the O's average about 1.5 significant international prospects at a time. Right now it is Reyes, a few years ago is was Schoop and ERod.

[abbott]

That might actually be a good analogy that argues against your point. I would never play the lottery as a core investment strategy. I might buy a ticket or two just on the chance of a high-upside event, but if the odds are against me I am not going to make a significant investment. Most of the people who put a lot of money into the lottery end up losers.

I have tended to accept the conventional wisdom that the O's are bad at the foreign markets, but I was pretty well convinced by this article that it may be a sound strategy. Definitely agree that MLB should not incentivize the system that is currently in place in the DR regardless of what the O's end up doing.

I would like to see the O's be more active in Japan and Korea, where you can at least believe a player's birth certificate and make an educated guess how they are going to do in MLB.

Orioles following Sound strategy to be highly selective to the point of disdain in the foreign markets.

Sounds Strategy:Avoiding Tier 1 Free agents.

Refusing to Re-sign your own free agents to overly lengthy contracts is also a sound strategy.

Don't sign pitchers to long term contracts is also a sound strategy.

The open market for professional baseball players is over priced, do not participate.

So what is a successful strategy, if you avoid foreign amateur free agents and professional free agents and you have proven that your strategy for drafting cost controlled players doesn't work?