Exclusive! Excerpts From New Book on the 2004-2010 Mets
In 2000, a gritty bunch of veterans, role players, and youngsters almost did the impossible – beat the New York Yankees in a World Series. Led by the mad genius of Bobby Valentine, the silver foxiness of Steve Phillips, and the support of a well-capitalized owner who gladly stayed out of the public eye (Fred Wilpon), the 2000 New York Mets were almost at the top of baseball’s pyramid.
But what happens when a financial industry wizard and a certifiable baseball GM scheme together to implement the same strategies that fueled the recent Wall Street collapse? In the case of the New York Mets franchise, disaster happens – the culmination of one of the greatest turnarounds in baseball history.
In The Skim Is In – How Wall Street Strategies Took a Major League Baseball Team From First to Worst, financially-successful journalist and sportswriter Mike Lupica chronicles the remarkable story of one team’s Dante-like journey from World Series team to a paragon of all that’s wrong in America. By misquantifying the game’s tangibles, Bernie Madoff and ‘boy (was he not a) genius’ Omar Minaya were able to skim out that extra 2% that separates a losing organization from a winning organization–they were able to deliver to New York something that the Royals had never brought to Kansas City: a pyramid of incompetence that entombed a whole franchise.
Following are some excerpts from the book:
Tricking Yourself Into Thinking You’re Smarter Than the Competition:
….Minaya, along with passionate sidekick Tony Bernazard, developed metrics that let them take advantage of aspects of the game that they felt were undervalued such as FIS (fluency in Spanish) and LoCoZo (short for ‘loco como un zorro’ which translates to crazy like a fox). As Minaya saw it, “People would see a 40 year old Moises Alou as injury-prone and unlikely to repeat his past successes but we knew he still spoke fluent Spanish and anyone who pees on their hands has LoCoZo to spare. For $15 million, we got two years of .340+ AVG with power from Moises.” To the rest of baseball, they saw that Moises only managed 377 ABs in those two years and this money could have been invested in a billion better ways. But it was strategies like this that helped Minaya feel he outsmarted baseball by tying up unwanted players like Oliver Perez and Luis Castillo to multi-year contracts, ‘outfoxing’ the Yankees and Mets to sign Johan Santana and Carlos Beltran to $100 million dollar contracts, and cutting losses with uni-lingual, even-tempered prospects Heath Bell, Matt Lindstrom, and Brian Bannister.
Whiffing On Andrew McCutchen:
….Mets scout Rodrigo Ciudad was accustomed to life as a Mets scout. Responsible for scouting all of the United States, Rodrigo’s region was nowhere near the Mets’ preferred baseball hotbeds of the Caribbean, Latin America, and Venezuela. With most teams employing multiple scouts in his region, Ciudad tended to focus in warm weather climates that were more conducive to baseball talent and his love of fresh mango dusted in sugar and chili powder. It was on one of these mango-missions that he heard about a Florida high schooler named Andrew McCutchen. Ciudad liked what he saw in the young outfielder and was even more encouraged when the Mets didn’t sign a top free agent and would keep their 1st round pick. Unfortunately, Minaya lost a bet with Jeff Wilpon over who would get to make the first pick in the 2005 amateur draft. Wilpon, the owner’s son, ignored Ciudad’s pleas, saying “We’ve already got a better version of McCutchen in Lastings Milledge.” and spent the 9th pick of the 2005 draft on Mike Pelfrey. To add insult to injury, the hapless Pirates drafted McCutchen and the Reds followed that pick with Texan High Schooler Jay Bruce.
Turning A Lucrative Franchise Into an Over-Leveraged Shell
….Fred Wilpon was always wary of ‘get rich quick’ schemes. He made his money through shrewd real estate investments. If George Steinbrenner was an IPO that struck it rich, Wilpon was a trustworthy mutual fund – steadily accruing value over time. Bernie Madoff was the same way. He wasn’t in business for the quick buck. He was in it for the slow billion or so bucks. They quickly became friends and, for 10 years, didn’t overlap business with friendship. Wilpon started by investing $10 and, upon getting $11.50 back the next year, slowly invested more and more funds from his company (Sterling Equities). The consistency was welcome to the Wilpon as inconsistency might’ve required him to do research into how the money was being made. Smart enough not to meddle in the day-to-day dealings at the Met offices, Wilpon focused on building up the right-side of the Sterling Equities balance sheet (to the tune of $500+ million in debt), building a new stadium, and starting a new TV network. His financial prudence led him to avoid selling branding rights to the new stadium to a ‘fly-by-night’ company like Enron, striking a deal with the responsible CitiGroup. You can imagine the disappointment when his trust in Wall Street and consistent profits proved to be his very downfall….
