“Prospects are just prospects”. “Having an elite farm system doesn’t matter if you’re not winning at the big-league level”. These are constant phrases that I've heard on multiple occasions from baseball spectators.
At Prospects Live, prospects are obviously the focus. Whether it be individual team lists, dynasty rankings, or specific prospect spotlights, our focus is providing viewers with as much content on amateur baseball players as possible. We all want to know who the next great players will be, which leads to a lot of fun discussion and debate.
However, have we ever really looked at why teams prioritize prospects so much? When a team goes into a rebuild, they are sacrificing instant success and revenues for these players; why do they do this? That will be the focus of today’s piece. We will look at all of the different reasons why prospects are so valuable, and why building and maintaining an elite farm system remains the key for consistently winning.
#1: High Range of Outcomes
A common criticism of hoarding prospects is that they are “just prospects”. In other words, there is a chance they could end up busting.
However, I believe that this line of thinking fails to see the other side of the bell curve. Sure, prospects may end up bottoming out, but what if they hit their high-end potential that no one deemed imaginable?
Padres superstar shortstop Fernando Tatis Jr. stands out as a prime example. When the White Sox signed him, they did so for just $750,000, and there wasn’t much made when he was traded to the Padres for veteran starting pitcher James Shields.
While we believe that we can quantify ceiling, that isn’t exactly correct. It takes several years of statistical data for a baseline to be built on a player, so rather than shipping away players with the fear they can be a bust, there should be an equal amount of inclination to hold onto them in hopes of them becoming a big-league contributor. I’m sure the White Sox wish right now they had Tatis Jr. playing shortstop for them.
#2: Cost-Controlled Production
This might be what is most overlooked when it comes to the value of a prospect. In free agency, teams need to pay anywhere from $5 million to $9 million per Wins Above Replacement for a player. That means to be an average team, if a team gets the exact WAR from players that they are expecting, they would be spending anywhere from $177 million to $283 million. That’s just to be an average team!
Tatis Jr. is a fantastic player, but what makes him even more appealing is the fact that he will only make $575,000 this season in his third year under team control. If he posts the 5.8 WAR that Steamer projects for him, they will be paying roughly $100K per WAR. That makes him arguably the best value in all of baseball, and the same will hopefully apply soon for the likes of Wander Franco and Spencer Torkelson.
It’s worth mentioning, of course, that this is sometimes construed as a team’s drive to cut costs all turns, by DFA’ing a perfectly acceptable player (Eddie Rosario) or refusing to pay arbitration prices when the cost is within reason. I recognize that owners are dripping in millions and chatting about production vs. cost is not a comfortable conversation.
#3: Building a Foundation
Ironically, the “average” team I was referencing in the previous blurb was the Phillies, who ranked 15th in WAR in 2019. They spent $140 million to get there, and it was their highest payroll in three years.
So, what went wrong? Simply put, Philadelphia lacked the foundation necessary to compete. Starting pitcher Aaron Nola and first baseman Rhys Hoskins were the only home-grown players on their roster to be worth over two WAR, which is something free agency cannot fix for you. Signing Bryce Harper is great, but what makes teams great is depth.
Let us use the Dodgers as an example. Their home-grown pitchers combined for 15.7 WAR in 2019 , while their home-grown hitters combined for 19.9 WAR. That means that over 60% of their production came from players they drafted or signed in the international signing period. Successful organizations such as the Padres, Twins, and Braves also get a significant amount of their production from home-grown players.
#4: Trade Ammo
Not only does building an elite farm system supply a team with the players necessary to compete, but also the players necessary to add the finishing piece to a World Series contender.
Every team would love to trade for Blake Snell, Mike Clevinger, Yu Darvish, and Joe Musgrove to their rotation. Yet, the Padres will able to add all three without trading away their top prospects (outside of Luis Patiño), which is a testament to the job they did building an extremely deep farm system.
The finishing piece to finally help put the Dodgers over the top was superstar Mookie Betts. As a result of building sensational organizational depth, they felt comfortable dealing Alex Verdugo, Jeter Downs, and Connor Wong for his services. Also, since they were getting so much cost-controlled production, they also had the finances necessary to take on some of David Price’s contract in addition to Betts.
Not only can prospects be used to plug future holes on the big-league roster, but they can also be leveraged to acquire players who can help them immediately. A team like the Angels, for instance, would love to acquire a frontline starting pitcher, yet they don’t have as many resources as the Padres, which is a major reason why they’ll likely have to look to free agency to try to get Mike Trout to the playoffs. Should the Padres be as successful as projections believe they will be, they will be able to look back to their prospect acquisition practices as a critical reason why.
#5: Being Able to Deal With Adversity
Baseball, as are all sports, can be quite unpredictable.
You never know when a player can get injured or struggle immensely. When that is a case, a hole can open up on the roster than you were not expecting.
When this happens, a team has two options:
For starters, they can call up a prospect to contribute for them. Mid-season call-ups are extremely common, after all. In 2010, the Giants called up Buster Posey to replace Benji Molina as their catcher, and he ended up being the missing piece. Meanwhile, Yordan Alvarez, Cody Bellinger, Kris Bryant, Carlos Correa, and Ronald Acuna Jr. have all been key players for playoff teams as rookies.
The other option would be to make a mid-season trade. The Dodgers stand out as a clear example. Coming into the 2018 season, they expected to have the services of Corey Seager at shortstop. Instead, he underwent Tommy John surgery, which could have put them in a tough position. Instead, they had the prospect capital to trade for Manny Machado, who helped propel them to the World Series. The 2017 Astros, meanwhile, were able to respond to some struggles with their rotation by trading for Justin Verlander.
In simple terms, the more prospects you have, the more flexible you can be. The more flexible you can be, the better equipped you are to deal with unpredictability, which increases your chances of winning games.
#6: Not Being Constrained To a Window
The beauty of teams like the Dodgers is that they are able to win AND maintain an elite farm system. Thus, they never have to even consider rebuilding.
If you have a strong farm system, then you will be better equipped to deal with losing a few prospects in a trade to help your chances of winning. The Dodgers make frequent midseason trades, but because they continue to churn out young players, they don’t miss the beat.
On the other hand, the Cubs and Red Sox went all-in on a small window, and although they won the World Series, both teams are now suffering consequences. Chicago is now having to tear apart their core, while Boston had to ship Mookie Betts. Flags fly forever, though, so it’s a worthy debate to have if it was all worth it.
The worst-case scenario would be the Phillies, who made several moves to win right away and have yet to even finish with a winning record. Now, even if they resign JT Realmuto, they will only be projected to be about a .500 team by Fangraphs, as they don’t have the resources to bring back Realmuto AND address other needs. If they had catching depth, perhaps they would not feel as though they have to retain Realmuto, and if they lose him, they essentially will have traded top prospect Sixto Sanchez for two years of excellent production, but not production that helped them win enough games.
As mentioned, baseball is unpredictable. Thus, giving yourself as many bites of the apple as possible is key. The Dodgers didn’t constrain themselves to a window, so they were able to finally overcome their postseason failures in 2020. Had they not maintained an elite farm system, perhaps they still would be looking for that championship.
Conclusion
One might not be able to see the immediate gratification of building an elite farm system, but is clear why going through a rebuild is necessary.
Prospects provide teams with the cost-controlled production to build a foundation necessary to build a winning team. Meanwhile, since they have such a high range of outcomes, they may end up overachieving their projections and end up advancing the team’s contention process.
Meanwhile, having a lot of prospects also gives teams the flexibility to deal with adversity and plug unanticipated holes. This can come via injury, underperformance, or a player leaving in free agency; the prospect can replace a player or a replacement can be acquired via trades.
In the end, though, it is all about not being constrained to a window. With the playoffs being such a crapshoot, giving yourself only a few chances to win a World Series does not make sense. The Dodgers, for instance, will now have the ability to try to become a dynasty, whereas they could have limited their window and could have missed their chance to win a World Series altogether. It isn’t about not having a window, but rather, keeping the window wide open.
Will the Padres be like the Dodgers or the Cubs/Red Sox? Or worse, the Phillies? Considering how much of a foundation they have in place, it would be silly to suggest they’ll be like Philadelphia. Plus, they still have a lot of young pitching depth and have the services of a lot cost-controlled players, many of whom won’t be expensive for multiple years. This is why they not only have been able to make trades for players with multiple years of control, but also can absorb some of the free-agent commitments (Manny Machado, Eric Hosmer, Will Myers) they have made. As long as they continue to add depth through the draft and remain committed to signing players in the international signing period, I am confident that they can build a sustainable winner.
As of now, there aren’t many teams who are focused on sustainable winning, rather than going all-in on small window. However, between the Dodgers, Yankees, Braves, Rays, Twins, and Padres, there are now several teams that now possess elite big-league teams with a lot of roster talent, as well excellent fame systems. Meanwhile, with teams like the Mariners, Tigers, and Giants making strides in their rebuilding process, in addition to the Cubs, Rangers, and Red Sox (teams with money to spend) looking towards the future, we may be only seeing the beginning of a massive shift in how teams go about constructing their roster. It will be interesting to see how this plays out, and if every team starts thinking this way, how “easy” will it be to simply rebuild and establish a prospect foundation? The next five years or so should provide us with the answer to this critical question.