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HBT Q&A: Jonah Keri, author of The Extra 2%

Mar 14, 2011, 10:00 AM EDT

Jonah Keri

Earlier this morning I reviewed Jonah Keri’s new book, The Extra 2%: How Wall Street Strategies Took a Major League Baseball Team from Worst to First. Yesterday he took some time to answer some of my burning questions.  Well, maybe not burning. Just mildly irritating. The kind that go away with a cold compress or by simply not thinking about them for a little while.  Whatever. Here are the questions:

HarballTalk: Why the Rays?  What was it about them and their approach that first attracted you to them as a topic?

Jonah Keri: The short version is the publishing partnership of ESPN Books and Ballantine approached me with an idea, so I said yes. The long version is several factors were in play. Loved the underdog story, how a team with a revenue stream that was so tiny compared to the Yankees and Red Sox could climb that mountain. The dual sports and business angles were a big draw too. Here you had two guys from Goldman Sachs and one from the private equity world who’d come into baseball without a ton of experience (Andrew Friedman played college ball at Tulane, that was about it). So they took the best ideas they’d accumulated in their old careers and brought them to bear in their new gigs. Since I’m both a sports and business writer (I’d covered the stock market for Investor’s Business Daily for about a decade by that point), it seemed like a great fit too.

And yes, there was a little bit of a Montreal Expos connection too (I was a huge Expos fan growing up). I’d already started rooting for the Rays before I got approached for the book. Like the early-to-mid-90s Expos, the Rays were a low-revenue club built on homegrown talent and shrewd player acquisition that had defied the odds and become great.

HBT: The book is obviously filled with countless examples of Sternberg/Silverman/Friedman’s unique approach. If you had to name one thing they did that made the biggest difference — some watershed move — either in terms of changing the tone for the franchise or in terms of a move that led to the greatest measurable improvement for the Rays, what would it be?

JK: The Evan Longoria contract. The seeds had already been sown with the team’s deals for Carl Crawford and James Shields. In those two cases, the team saw a pair of quality pre-arbitration players who could be solid for the next several years, so they offered long-term security in exchange for upside if those players performed as the team hoped. The kicker was tacking on club options — not one, but multiple years of club options — at the end. That way you had all potential reward, no risk for the Rays.

In Longoria’s case, it was taking that model to the extreme. They first approached Longoria when he was still in the minor leagues. They’d tried the same thing with B.J. Upton when he was in the minors too (before Sternberg took over majority control, but after he, Silverman and Friedman had come in) but were unsuccessful. Fortunately for the Rays, Longoria was more receptive to a long-term deal right off the bat, figuring he’d be set for life if he did the deal and invested wisely. So you ended up with the type of contract that had never been done before in that form. Six days into his major league career, Longoria makes it official and signs a nine-year deal worth about $48 million all in. There are not one, not two, but three club options at the end of the contract, worth $7.5M, $11M, and $11.5M. We’re still a few years away, but those look like gigantic future bargains.

HBT: Perhaps the most entertaining/frightening thing in the book is your documenting of the horrors of the Naimoli era. The guy was unconscionably cheap, insanely ego-driven and profoundly tone-deaf when it came to public relations. In your mind, what was the most shocking/hilarious/gobsmacking Naimoli anecdote you uncovered?

JKDeadspin ran a lengthy excerpt from the Vince Naimoli era which encapsulates some of the crazier policies and decisions of that regime. As to which anecdote was the most gobsmacking, I almost feel like you need to separate these into categories, like you would at the Oscars.

For Best Comedy, it’s a tight battle between Naimoli complaining to the city of a “pesky raccoon” terrorizing their property; Naimoli complaining to the city that he doesn’t have his own reserved parking space at the airport; and Naimoli refusing to authorize Internet and email access until 2003.

For Best Drama, Naimoli terrorizing his ushers and ticket takers into snack-prevention supercops who threw out an elderly couple for a bag of cashew nuts; Naimoli making a high school marching band pay for tickets in exchange if they wanted to sing the national anthem at the Trop; and Naimoli pulling copies of one of the local flagship newspapers out of the stadium because they characterized him as a Tony Soprano-like figure.

There are so many more stories, though. Good chance readers might find five other stories they like better.

HBT: Can the Rays’ success last?  Is the “look for the small advantage in everything we do” approach something that, unlike like the A’s and their identification of that which is undervalued in the marketplace, isn’t easy for someone who is just as bright but with greater resources to co-opt?  Put differently: do you think that what has happened in Tampa Bay is a function of unique skills on the part of Sternberg/Silverman/Friedman coming together in a perfect storm, or is it possible for any team to apply the same principles and find success?

JK: Well, first of all the A’s won 87 games or more in eight straight seasons and made the playoffs five times in that stretch, so it took a while for the advantages they’d exploited to be grasped by the competition. That aside, is it possible for other teams to deploy…if not identical methods, at least somewhat similar ones? Sure. But it’s also possible to simply be a little better at a given game, even if everyone tries to use your tricks to win it.

That to me is one of the key takeaways of The Extra 2%. It’s not any one thing with the Rays, and I don’t portray it as such in the book. It’s making seemingly small trades that pay off years later; stockpiling draft picks, then executing on those picks better than other teams; doing a better job of developing players once they come into the system; more roving minor league instructors than most other teams better collaboration between the analytics people and the manager; better contract-negotiating skills; a willingness to be flexible on budget, rather than having hard and fast round numbers for how much to spend in any given season; and a whole bunch of other factors too.

So sure, other teams will try. And the Rays probably won’t spend the next 20 years winning two out of every three AL East titles over and over. But there’s a real foundation for success here, despite the huge disparity in resources. As long as this management stays together, the Rays will have a fighting chance. And even if they take a step back here or there, they’ll still be pointed in the right direction, and be a threat to have a huge season in any given year.

HBT: Finally, the team on the field in 2011: This may be a bit of a transition season for the Rays, but I think people are sleeping on them too much. My gut is that they and the Yankees will battle for the wild card all year. What’s your take?

JK: That sounds about right to me. The biggest move of the Rays’ off-season was the Yankees not getting Cliff Lee. Had that happened, you’d be talking about a potential swing of six-plus wins, which likely would have been too much for the Rays to overcome. Since Lee went to Philly, the Yankees have major uncertainty in the bottom three spots of their rotation (though Bartolo Colon has apparently harnessed the power of hot fudge sundaes into fastball velocity this spring). That makes New York vulnerable.

Then you look at some of the players who’ll be asked to step up this spring with the exodus that occurred this off-season. Reid Brignac and Jeremy Hellickson might be better than Jason Bartlett and Matt Garza right now, leaving aside how much cheaper they’ll be, and that they should get better with experience. Getting Manny Ramirez for $2M is a coup of the highest order; by wOBA and other advanced offensive metrics he’s been better with the bat (on a rate basis) than anyone on the Rays, including Evan Longoria. They’ve gone dynamic, young bullpen arms like Jake McGee and Adam Russell poised to at least pick up some of the slack left behind by a bullpen full of pitchers who almost across the board had career years in 2010.  The Red Sox will be tough to beat for the division title, and I wouldn’t bet on the Rays winning 96 games like they did last season. But they can absolutely compete with the Yankees, as well as the runners-up in the Central and West divisions.

The better news is that they will be very young, very cheap, and only getting better in the next couple years, with 12 of the top 89 picks in this year’s draft to boot. The Rays aren’t going anywhere. If you like underdog stories, they’re a great one.

  1. obsessivegiantscompulsive - Mar 14, 2011 at 11:07 AM

    This Q&A pretty much sold me on getting Keri’s book, it sounds much more interesting with him describing it than reviewers so far, and they have been very positive up to now.

    Still, people are still not understanding that the A’s didn’t get good because they found market efficiencies with players, they got good because all the losing before Beane came on gave their farm system a big shot of talent that paid off during his years as GM. But once that talent started taking off via free agency and it wasn’t getting resupplied via the draft, because once you start winning, you get lousy draft position. That is why his farm system was in shambles a couple of years ago and he had to trade away all his good pitchers in an effort to restock up the farm system. Had he stuck to that instead of trying to be competitive by trading for Holliday and signing Sheets for $10M, plus his ill-fated trade for Milton Bradley (think they couldn’t use CarGon and Ethier in the heart of their lineup last season?), they probably wouldn’t have to make all the moves they did this off-season to try to revive their offense.

    Same with the Rays, poor draft position gave their farm system a huge boost. They made good moves trading away guys this off-season to restock, because winning kills the talent flow from the draft, but missed out on their more important trade they needed to do, which was trading away Carl Crawford for prospects when they had a chance, instead of getting two lousy draft picks for him. For any gain their dealing away Bartlett and Garza away, they probably lost multi-fold by not trading Crawford last off-season. Particularly given how poorly their attendance has been given their winning and general goodness, that was a move they should have made.

    • Chris Fiorentino - Mar 14, 2011 at 11:14 AM

      I’ve said it before and I’ll say it again…there are 3 reasons the A’s won…Hudson, Zito, and Mulder. Moneyball is a nice story, but the fact is that had the A’s not had Hudson, Zito and Mulder, they would not have won. Their futility since Zito left pretty much proves that point.

      • Joe - Mar 14, 2011 at 4:42 PM

        I don’t understand how the facts that Beane got a 3+ WAR player for $500K and that the St. Louis Cardinals won a division in the other league and ended up as WS Champs are evidence that the A’s were lucky to win the division in 2006. The first one seems evidential of the kind of good low-risk move that a team like the A’s should be making, and the second one seems pretty completely unrelated to the A’s and the American League West.

      • Joe - Mar 14, 2011 at 4:43 PM

        This should have gone on the second Fiorentino Comment.

    • churchoftheperpetuallyoutraged - Mar 14, 2011 at 11:53 AM

      Still, people are still not understanding that the A’s didn’t get good because they found market efficiencies with players, they got good because all the losing before Beane came on gave their farm system a big shot of talent that paid off during his years as GMblockquote>

      This isn’t true. You should really read the book. The monster draft (’02) that is the focus of the book comes about due to stockpiling draft choices by letting overvalued players leave (Type A free agents). Guys like Johnny Damon, Jason Giambi and Jason Isringhausen to name a few. The ’01 season the A’s lost to the Yanks 3-2 in the Division Series.

      But once that talent started taking off via free agency and it wasn’t getting resupplied via the draft, because once you start winning, you get lousy draft position.

      Depends on who you are talking about. If it’s just the big 3 as mentioned by Chris below, they got some great return and some not so great return. But also the A’s lost Jason Giambi and Miguel Tejeda, and the choice to stick with Chavez instead of one/both of those two also hurt.

      Mulder – Winter of ’04 traded to STL for Dan Haren, Kiki Colero and Daric Barton. Oak finished 2nd in the AL W in ’05. Mulder had one good season in ’05 and was below replacement the remaining 4. Barton and Haren put up better numbers than Mulder in that season (and beyond obviously). Haren spent 2 years in Oak and was flipped for Brett Anderson, Carlos Gonzalez and others.

      Zito – Left in ’07 to an absurd deal, has been replacement level 2/4 years and sub replacement the other two.

      Hudson – This was a flop, traded and everyone in return (Juan Cruz, Dan Meyer) haven’t turned out.

      Oakland’s results:
      ’03 – 1st
      ’04 – 2nd
      ’05 – 2nd
      ’06 – 1st
      ’07 – 3rd
      ’08 – 3rd

      • churchoftheperpetuallyoutraged - Mar 14, 2011 at 11:55 AM

        dammnit html fail, let’s try this again:

        Still, people are still not understanding that the A’s didn’t get good because they found market efficiencies with players, they got good because all the losing before Beane came on gave their farm system a big shot of talent that paid off during his years as GM

        This isn’t true. You should really read the book. The monster draft (’02) that is the focus of the book comes about due to stockpiling draft choices by letting overvalued players leave (Type A free agents). Guys like Johnny Damon, Jason Giambi and Jason Isringhausen to name a few. The ’01 season the A’s lost to the Yanks 3-2 in the Division Series.

        But once that talent started taking off via free agency and it wasn’t getting resupplied via the draft, because once you start winning, you get lousy draft position.

        Depends on who you are talking about. If it’s just the big 3 as mentioned by Chris above, they got some great return and some not so great return. But also the A’s lost Jason Giambi and Miguel Tejeda, and the choice to stick with Chavez instead of one/both of those two also hurt.

        Mulder – Winter of ’04 traded to STL for Dan Haren, Kiki Colero and Daric Barton. Oak finished 2nd in the AL W in ’05. Mulder had one good season in ’05 and was below replacement the remaining 4. Barton and Haren put up better numbers than Mulder in that season (and beyond obviously). Haren spent 2 years in Oak and was flipped for Brett Anderson, Carlos Gonzalez and others.

        Zito – Left in ’07 to an absurd deal, has been replacement level 2/4 years and sub replacement the other two.

        Hudson – This was a flop, traded and everyone in return (Juan Cruz, Dan Meyer) haven’t turned out.

        Oakland’s results:
        ’03 – 1st
        ’04 – 2nd
        ’05 – 2nd
        ’06 – 1st
        ’07 – 3rd
        ’08 – 3rd

      • Chris Fiorentino - Mar 14, 2011 at 1:40 PM

        First, I don’t consider a team that misses the playoffs to be “successful” I don’t care how little money they spend. So the only truly successful year they had after the big three broke up was 2006. The 2006 playoff run was mostly a matter of luck, as the single biggest reason they made that playoffs that year was a one final year resurgence from Frank Thomas, and a quirky year where the 83-win Cardinals won the World Series. Otherwise, all their success was directly attributable to the big three. “Moneyball” was just a nice story and didn’t have much to do with the overall success of the Oakland A’s from 2000 to 2003.

    • buddaley - Mar 14, 2011 at 6:31 PM

      Had they traded Crawford before 2010 they likely do not make the playoffs. They did not trade Crawford because he could help them win in 2010 and they had enough backup for future years to risk going all in last year and accept the 2 draft choices as compensation to help restock the farm.

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