Are the Pirates the new Rays? (Part two)

After winning 98 games in 2015, the Pirates appeared to be in an enviable position.  They had a strong core, with the strength of the team -- its outfield -- under control (by the start of the 2016 season) through 2018 as a group.  They had already extended their new second baseman and would eventually extend their catcher.  They had two outstanding starting pitchers and one of the most effective setup-and-closer combinations of all time.  They also had one major issue:  the rotation.  Seemingly, the money was there to try to do something, especially after the team shed Charlie Morton's contract in a salary dump trade.  But that one need wasn't addressed, as the opening day payroll for the 25-man roster remained slightly below $100M.

If the failure to address the rotation didn't already call into question the team's financial ability to compete, the trade deadline put it front and center.  The Pirates traded Francisco Liriano to Toronto, with the Jays picking up the roughly $17M that remained on his contract.  The decision was triggered by Liriano's terrible pitching during the season's first four months, but the need to dispose of Liriano wasn't a slam dunk.  A lot of teams would have stuck it out and hoped for a recovery.  It wouldn't be the first time Liriano bounced back from similar struggles.  In fact, it wouldn't be the second, either.  He made major turnarounds in both 2010 and 2013.  The Jays seem to think he could do it again.  They're in the middle of a pennant race, with a much better chance than the Pirates of reaching the post-season, yet they were willing to add Liriano to their rotation.

The Pirates, however, didn't just want to part with Liriano himself.  They were so eager to dump his salary that they threw in two good prospects (including an upper level catching prospect at a time when all three of the catchers ahead of him are showing varying signs of fragility).  And, no, nobody is going to convince me that the Pirates threw in the prospects because they were so enamored of a pitcher who'd failed, over 73 major league starts, to convince his team that he's a major league pitcher.  In fact, the Jays were so unimpressed with Drew Hutchison that they preferred having the much more expensive, and severely struggling, Liriano in their rotation in the middle of a playoff race.

So how much do recent events with the Pirates' parallel the Rays' problems?  The Rays were one of MLB's best-run teams for years, as they showed by staying in contention in an extremely tough environment for six seasons, in fact arguably for eight, despite a miniscule payroll.  Even without top draft picks, their farm system remained good; Baseball America rated it #1, 2, 8, 4, 20, 12 and 13 from 2010 through 2016, and that's with the Rays continually graduating players to fill openings.  While the Pirates have shown a facility for reclaiming veteran pitchers, the Rays succeeded with young pitchers and an ability to identify undervalued position players who could give them strong, short-term production.  Examples (starting in 2010) include John Jaso, Matt Joyce, Casey Kotchman, Sam Fuld, Jeff Keppinger, James Loney, Yunel Escobar, David DeJesus, Brandon Guyer, Logan Forsythe and Asdrubal Cabrera.  Due to their lack of resources, though, the bleeding of talent eventually exceeded their ability to replace it.  In 2014-15, they stayed on the fringes of the playoff race and finished a little below .500.  This year, they're long out of it and looking to sell.

Obviously, the circumstances of the two teams are different in a lot of ways, but they could end up following the same path.  For the Rays, stage one was a six-year run in which they were unable to make moves that might have made a good team better.  Stage two was the bleeding of talent that finally reached a point where, despite a very capable front office, their success came to an end.  For the Pirates, the failure to address the problems in their rotation last off-season was the same sort of issue the Rays faced year after year.  The Liriano trade then hinted at stage two, as the Pirates had to give up two good prospects just to clear a relatively modest amount from their payroll.

The scary thing about the Liriano trade isn't the loss of the two prospects, but the fact that it was so important for the Pirates to get rid of Liriano's contract that they gave up talent to do it.  That, and the failure to deal with the rotation, show a disturbing lack of financial flexibility and bode poorly for the future.  Are they going to have to dump salary every time they need to make a significant move?  Are they going to be like the movie "Addams Family Values," where Wednesday tells Pugsley that, when a new child is born, one of the other children has to die?

The most obvious distinction between the Pirates and Rays -- the fact that the Pirates have locked up so many of their key players -- may even be a problem for the Pirates.  All those position players I listed above who helped the Rays during their successful run were guys the Rays were easily able to move on from when they stopped performing well.  The Pirates may not find it so easy, as the Liriano trade shows.  Of their five significant contract extensions, one (Josh Harrison's) already looks like an albatross and two others (Andrew McCutchen's and Francisco Cervelli's) are trending very badly right now.  On a team with such limited resources, whether as a result of cheapness or legitimate financial constraints, contract extensions might eat up all the team's flexibility, effectively leaving it in the same position as the Rays, who had no significant extensions beyond Evan Longoria's.  If they have so little room to maneuver, the Pirates might need to dump contracts regularly just to remain within their budget, which is exactly what happened with Charlie Morton and may also be the case with Liriano.

So what's the consequence of having so little financial flexibility?  Right now, the Pirates have an outstanding group of four prospects (or five, if you still count Jameson Taillon) who not only have star potential, but who are all major-league-ready or very close to it.  They also have a great deal of depth in AAA and to a lesser extent (much lesser, since the Liriano trade) in AA.  If the Pirates in the next few years are going to break through the barriers that stopped the Rays, this group is going to be the reason they do.  But how often to things go according to plan?  In 2011, the Royals' system was rated #1 by Baseball America and was lauded as one of the strongest farm systems ever.  The Royals' top ten prospects included five highly regarded pitchers:  John Lamb, Mike Montgomery, Danny Duffy, Chris Dwyer and Aaron Crow.  The Royals reached the last two World Series, partly on the strength of that farm system.  Of those five pitchers, Duffy was the only one to start a game in either season.  Crow was the only other one to pitch for the Royals, solely in relief in 2014.  How likely is it, really, that the Pirates won't need to make significant additions beyond what they have in their farm system now?

And how long will the farm system keep producing?  One thing that's been driven home to me in doing the daily minor league summary this year is that the Pirates' farm system below Altoona is not good.  Going into detail on this subject would be a lengthy article in itself, so I'm not going to try right now.  But I do see it as part of the bleeding process, in the sense that the system is gradually declining as the resources dry up.

Some of this the Pirates can't help.  MLB's screw-the-small-markets draft bonus pool rules leave them with no ability to do anything extra in the draft.  The penalty for exceeding your pool by more than a little bit is so extreme that no team has incurred it.

Some of the decline, though, they can help.  They've steadfastly ignored the Cuban and Japanese talent markets.  They're likely to do the same with Korea, as the other 29 teams aren't going to be caught napping again the way they were with Jung-Ho Kang.

Most disturbing of all, though, is the Pirates' approach to the limits on international bonuses.  Since the system was implemented, the Pirates have declined to exceed their pool and, as a result, their upper limit for bonuses has sharply declined even though bonuses for top international amateurs overall have sharply increased.  The top bonuses paid by the Pirates each year, starting in 2010, have been:

2010:  $2,600,000 (Luis Heredia)
2011:  $1,050,000 (Harold Ramirez)
2012:  $700,000 (Michael De La Cruz and Julio De La Cruz)
2013:  $400,000 (Adrian Valerio)
2014:  $400,000 (Yondry Contreras)
2015:  $450,000 (Kevin Sanchez)

The Pirates are not expected to sign any top international prospects in 2016.

The Pirates' spending pattern contrasts sharply with MLB as a whole, as bonuses baseball-wide have gone in the opposite direction.  To get an idea, you only have to skim Baseball America's list, from a year and a half ago, of the top 40 international bonuses of all time.  Twenty-five of the 40 came between 2010 and 2014.  In 2015, another 14 players received bonuses large enough to make the list from the previous year.

The penalties when a team exceeds its international bonus pool, the ones the Pirates won't risk, have proven to be little more than a paper tiger.  If a team exceeds its pool by 10-15%, it can't pay a bonus larger than $300,000 for a year.  If it exceeds its pool by more than 15%, it can't go over $300,000 for two years.  Many teams have found the penalties to be no barrier at all.  So far, the Dodgers, Cubs, Giants, Diamondbacks, Angels, Red Sox, and Yankees, along with the Royals and Rays, have incurred the two-year penalty.  The Blue Jays incurred the one-year penalty.  This year, according to Baseball America, the Padres, Braves and Nationals are expected to blow past their limit, and the Brewers, Cardinals, Phillies, Rangers and Twins may do so as well.  That's 60% of the teams in baseball.

So why not the Pirates?  The penalty should be meaningless to them because they're barely going over $300,000 for their top international prospects already.  It's not like they've never defied MLB before.  The record (for the second round) draft bonus they paid Josh Bell may have been the final straw that stiffened MLB's resolve to stop lower-revenue teams from taking advantage of the draft to add affordable talent.  Of course, back then the Pirates had an extremely low major league payroll.  The obvious conclusion is that they're so confined within their limited budget that the increase in the major league payroll, even though that payroll still remains among the lowest in the game, has left them unwilling or unable to spend more than the minimum on international bonuses.  In this case, it's the resources being bled from the team's amateur talent operations.

No doubt one response will be that the Pirates and Rene Gayo prefer to spread their international money around many prospects.  That may be, but the approach isn't working any more.  Gayo hasn't found another Starling Marte or Gregory Polanco since . . . Starling Marte and Gregory Polanco.  Since Polanco signed in 2009, the only amateur international position player who's established himself as a bona fide prospect has been Ramirez, and he got over $1M.  A few pitchers have stepped forward, mainly Edgar Santana and Yeudy Garcia, both of whom signed at late ages for Latin America, and Luis Escobar, who's still in short season ball.  But the Pirates clearly haven't had the success in Latin America that they had before the current bonus rules took effect.  This only stands to reason, with the Pirates paying less, everybody else paying more, and other teams scouring Latin America more frantically than ever for players to blow their mad money on.

In the end, it's possible the Pirates will have a run at least as successful as the Rays'.  The prospects they have in AAA could even put them over the top, although its difficult to have any confidence in this if the team remains unable or unwilling to fill holes, as it was last off-season.  It's quite possible the Pirates will stay competitive, but nothing more, for about as long as the Rays did.  After that, given the current state of the farm system and the team's unwillingness to compete for talent in the markets left open to them make an eventual teardown very likely.  This is probably an inevitable process for lower revenue teams, anyway.