Post #31

2023 Franchise Review [Number 4]: New York Mets (2022 Record: 101-61)

July 3, 2023

It’s when the Yankees score eight runs in the first inning and then slowly pull away. Jacob Ruppert, owner of the New York Yankees [1915 to 1939], when asked to describe his perfect day at the ballpark.

1. The Best Owner in Baseball?

For the most part, the owners of Major League Baseball teams are despicable people (there may be an exception or three). You don’t get to be a billionaire without cheating and stomping on other human beings. All that being said, the average Baseball fan probably could care less about the loathsomeness of their local owner than whether that owner wants the team to win too. So who (or what) would be the perfect Baseball team owner from a fan’s perspective? It probably would not be a corporation.* By definition, a corporation will (or at least should) always value profits over a championship. A corporate team will just try to win the World Series as a result of an established profit-making process. A championship would simply be a by-product of this system. But an efficient corporate team would never go all-in to win or overspend simply for a chance of victory. For this reason, the typical fan would probably much prefer an owner with an overwhelming desire to win. Of course, one of the major stories of 21st century Major League Baseball has been the adoption of the so-called Money Ball philosophy in whole or in part by virtually all Major League teams. And Money Ball, at its essence, is simply the very successful application of some modern corporate processes to Baseball. So perhaps the perfect Major League team owner would be one who applies the corporate processes of Money Ball to his team but also wants to win so much that he is willing to throw both processes and profits aside if necessary? This dream owner would be both stupid rich (able to overspend for the fun of it) & also hopefully from an industry that relies heavily on process, like perhaps some kind of investment manager.

*Interestingly, the two Major League teams currently owned by corporations, Atlanta (Liberty Media) and Toronto (Rogers Communications), are both very well run and quite successful.

2. The Tao of Steve Cohen

On October 30, 2020, billionaire hedge fund manager Steve Cohen purchased the New York Mets from the much maligned Fred Wilpon.* Mets fans rejoiced, assuming that any other owner would be better than the weirdly incompetent Fred Wilpon and family. Almost three years later, it has become apparent that the new Met’s ownership has cleared the bar of that assumption with room to spare. Cohen, who is reportedly the richest owner in the Majors, has spent his money on his new team as if the success of the team is much more important than actual profits. Of course, Cohen may be spending money now under the assumption that he will recoup it later (in economic terms, he is building up a reservoir of good will). In many ways, Steve Cohen seems to be following the diagram laid out by George Steinbrenner, the former owner of the New York Yankees (only without King George’s narcissism): spend money hand over fist for the best players and all the cash and publicity will ensure that good things happen. Also, since Cohen is a “billionaire hedge fund manager,” there seems to be an implicit assumption that he is competent and knows exactly what he is doing. Steve Cohen certainly says all the right things (such as often stating that he wants to model his New York Mets after the extremely competently run Los Angeles Dodgers). If one assumes that Cohen is a visionary and not just some guy throwing money around like it is nothing but paper, then the hiring of Billy Eppler on November 19, 2021, as the club’s General Manager has implications that cannot be denied. Billy Eppler does not fit with Cohen’s stated desire to be the Los Angeles Dodgers East.

*See Addendum #1

3. Steve Cohen Hires a General Manager

Born in 1975, Billy Eppler* has a interesting baseball resume: 1) a California native, he enrolled at San Diego Mesa College in 1993 and played baseball there; 2) he transferred to the University of Connecticut and played baseball for the UConn Huskies under an athletic scholarship; 3) Billy Eppler’s college career was ended by an arm injury; 4) he graduated in 1998 with a degree in finance; and, after interning for a year for the NFL’s Washington Redskins, he was hired in 2000 by the Colorado Rockies as a scout. In 2005, Eppler joined the New York Yankees as their director of scouting. in 2011, he was promoted to assistant general manager. Late in 2015, Eppler was hired away from the Yanks to be the general manager of the Los Angeles Angels, a position Eppler held from 2016 to 2020. On November 18th of 2021, Billy Eppler was hired by Steve Cohen to be the New York Mets’ general manager. Eppler was hardly Steve Cohen’s first pick for this job. And his hiring did not fit the presumed narrative. Instead of hiring one of the analytical data-driven general manager prospects that have flooded into Major League Baseball front offices recently, Cohen hired someone who would have fit right into the former jockocracy front offices that were swept away by the new Money Ball generation. If Steve Cohen’s plan was to follow the front office blueprints laid down by the Los Angeles Dodgers or Tampa Bay Rays, Bill Eppler was not the man for the job. So what were Billy Eppler’s main qualifications to be the general manager of the New York Mets?

4. The Man Who Signed the Japanese Babe Ruth

Like most Los Angeles general managers, Billy Eppler* started the job in 2016 with a five year plan to build the mediocre Angels into a powerhouse. He had the great advantage of inheriting a team with the best player in Baseball, Mike Trout, already on the roster. In 2016, the Angels finished with a 74-88 record despite Trout’s presence. In 2017 and 2018, the Angels finished with identical 80-82 records. Then, in 2019 and the covid-wrecked 2020 season, the Angels receded to 72-90 [.444] and 26-34 [.433] records. All this despite the addition of the Once and Future King as the best player in Baseball, Shohei Ohtani, to a roster that still included Trout. Any analysis of Billy Eppler’s tenure as the Los Angeles Angels general manager from 2016 to 2020 would have to conclude that it was an abject failure. So why did Steve Cohen hire him? Was there no one else like perhaps a very motivated ballpark crackerjack vendor? Basically, the answer is already included above. The one great success of Eppler’s stint as the Angels GM was somehow convincing Ohtani to sign on the dotted line. The most probable takeaway from Steve Cohen’s hiring of Billy Eppler is that Cohen will be going pedal to the metal after Shohei when Ohtani becomes a free agent after the 2023 season. So far, in Steve Cohen’s time as the Mets’ owner, the one constant has been a George Steinbrenner like willingness to overspend for true star players. The big story of the 2022 to 2023 off-season was the odd free agent journey of Carlos Correa. After originally signing with the Giants, Correa failed his physical and had his contract voided. Cohen then stepped in and signed Correa to another massive contract [315 million for12 years]. Reportedly, Cohen did this practically on a whim while vacationing in Hawaii. This is Steinbrenner-like impulsivity. Correa then also failed his Mets’ physical (when the Mets used the same doctor that San Francisco did). Eppler has been hired to give the Mets a leg up in the upcoming Ohtani free agency.

*Apparently Billy, not William, is his actual first name.

Searching for the Next Jacob Ruppert

So far, Steve Cohen’s tenure as the New York Mets’ owner has been mostly one of impulsivity, like a boy with a new toy. In 2021, his first year, the Mets were mediocre, finishing with a 77-85 record. In his second year, 2022, Cohen threw money at the problem and the Mets had a miracle type year, recording a fantastic 101-61 record before getting quickly bounced out of the playoffs. For 2023, Steve Cohen doubled down, putting together the highest paid team of all time with a team payroll in excess of 300 million with various penalties that will actually push it over 400m. The results have been disappointing, to say the least [the NY Mets are currently a sad 38-46 on the morning of July 3, 2023]. It will be very interesting to see how Cohen reacts to this poor result. It seems obvious that his first option will be to throw money at Shohei Ohtani. This has obvious parallels to Jacob Ruppert, owner of the New York Yankees, buying Babe Ruth from the Boston Red Sox way back in 1920. With Ruth, the Yankees dominated the American League throughout the 1920s. But Ruppert backed up his purchase of Ruth (and other star players) by building the farm system that allowed the Yanks to rule the League all the way down to 1964. If they do sign Ohtani, Steve Cohen will once again be doubling down on their current spend the bank strategy. But it will be even more interesting to see what happens if the Mets don’t win the Ohtani auction. Strangely, this may actually be bad news for the rest of the League. Without Ohtani, Steve Cohen may accelerate his building of a great analytically driven farm system like the Dodgers or Rays.

The New York Mets Future as Goliath?

While the Mets have struggled through a difficult 2023 season, Steve Cohen has said all the right things. Despite media personalities yelling and carrying on about how Cohen should punish the players for their poor performance, gut the team at the trading deadline, fire the manager and/or front office, and generally act like George Steinbrenner, Cohen has resisted the urge to pacify the idiot talking heads. He has remained calm and continued to send out a: “We will stay the course” message. This bodes well for the Mets future. If the best Major League Baseball owner possible would be one with: 1) an immense desire to win; 2) who spends money on premium free agents; and 3) invests his money in building the best possible farm system, Steve Cohen does not seem to be there yet. There have been no indications that the New York Mets have gone all in on building a Dodger-like farm system. The GM, Billy Eppler, seems like completely the wrong man for that particular job. But Steve Cohen has the possibility of becoming the next Jacob Ruppert. At this time, we may simply be seeing Cohen at the same stage as Jacob Ruppert was right before Ruppert bought Babe Ruth. If Cohen follows a similar path, the NY Mets may eventually be similar to the late 1930s led Joe DiMaggio Yanks.

Addendum #1

Major League Baseball Team Owners like to claim that the sport of baseball is not all that profitable. Their employee, the Commissioner of Baseball, parrots this propaganda pretty much whenever the Owners negotiate a new contract with the players or the owners are asked to pay for anything. Of course, this is simply a sound and a fury, signifying nothing other than the owner’s greed. Major League teams are obviously fantastically lucrative year after year (even probably during the 2020 Covid epidemic). However, the Owners do not have to just rely on their team’s annual income for their financial rewards. Owning a Major League Baseball teams also comes with a considerable financial asset appreciation when the owner finally sells. The transfers of the New York Mets’ ownership illustrate this perfectly. In 1986, Fred Wilpon & Nelson Doubleday, as equal 50/50 partners, purchased the NY Mets for $81.0 million dollars from the Doubleday Publishing Company (i.e. they each paid $40.5 million dollars for their share). In 2002, Doubleday sold his 50 percent share of the NY Mets to Wilpon for $391 million dollars. In other words, Fred Wilpon now owned the Mets in 2002 for an outlay of $431.5 million dollars. In 2020, Wilpon sold 95% of the Mets (keeping 5% for himself) to Steve Cohen for $2,400 million dollars (or 2.400 billion dollars). Even if the Mets had never made a dime of profit during all the Years that Wilpon owned the team, this is an return on investment that just boggles the mind. Basically, for Fred Wilpon, this was a 600% return over 18 years from 2002 to 2020. In other words, somewhere around a 30% annual return. Even Wilpon’s friend, Bernie Madoff, the Ponzi King, did not promise returns like this….

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