Bringing Free Agents to a Losing Team: The Loss Leader Strategy

Insanity is doing the same thing over and over and expecting different results.

Jesse: During the Winter Meetings, Terry Ryan said something to the effect of "Sometimes you can't give your money away." What was he referring to?

RA: We made very competitive offers to a couple pitchers, and maybe even better offers than what players signed for. You get into a situation when you're coming off of two 90-plus loss seasons - some pitchers, and to their credit they are looking to land in a place where they'll get a chance to win, and some teams can just offer that and a player will look at it and believe it moreso than when we say "Hey, we're trying to win, too."

That was from a conversation I had with Twins Assistant General Manager Rob Antony in April of this year, during our annual catch-up on all things Twins. Essentially, the organization will be facing similar issues this winter as it did to the last one, namely: it's difficult to convince quality free agents to come to a losing team.

Resources were available during the last off-season which could have allowed the front office to bring in a couple of free agents who could have been difference makers. Kevin Correia and Mike Pelfrey were far from disappointments, but expectations are a relative thing and neither pitcher was the difference maker that the team needed. While pitchers like Anibal Sanchez, who would have been an ideal target, took home lengthy contracts worth as much as a mid-level team's full season payroll, none of those pitchers came to Minnesota.

And it wasn't for a lack of trying. Or resources. Or offers. The Twins went after pitchers and, according to Antony, in some cases offered more than the pitchers eventually signed for.

With the team in basically the same position, albeit with even more money to spend, how can we expect different results? We've seen this movie before and we know how it ends.

The answer is that the front office needs to do something differently, if they plan on actually making a difference in the future direction of the organization. That answer seems simple - spend money - but it's not going to be as easy as that. They've tried spending the money before.

On February 6, 2004, the Detroit Tigers signed a 32-year old Ivan Rodriguez to a four-year, $40 million dollar contract. It was seen as a big gamble, for a team that had finished 43-119 in 2003, to go after a catcher with so many miles on his legs.

On December 5, 2010, the Washington Nationals signed Jayson Werth to a seven-year, $122 million dollar contract. It was seen as a big gamble, for a team that had finished 69-93, to take that kind of a financial risk on a player with a relatively short track record.

Unfortunately, Terry Ryan and the Twins find themselves in a situation where, if they want to be competitive sooner rather than later - if they want to take advantage of having a player on the roster, Joe Mauer, who could go down as the best pure hitter in the history of the organization and one of the best hitting catchers in the history of the game - they are going to have to overspend.

A "loss leader" is a product sold at a low price in order to stimulate sales on other, more profitable, goods and services. The front office will need to view this winter as their opportunity to spend on free agents as a loss leader - as a way to stimulate interest in the organization for future players. Rodriguez and Werth were loss leaders for Detroit and Washington, helping to kick start organizational turn-arounds so that, when their prospects arrived in the big leagues, the teams had established themselves as desirable destinations for other players.

Two of the most dynamic ways of attracting players to your organization are to, first, be a winner, and second, already have good players on the team so that the club is seen to be moving in the right direction. Minnesota has neither of those things working in their favor and likely won't, if they rely on their farm system to bring the team back to relevance. Relying on other factors to lure free agents, such as a player loving the region or Target Field or the classy way they were treated by the front office, aren't going to yield strong enough results. The Twins will have to overspend, but at least the resources are there.

An author at Rant Sports offered the Kansas City Royals as an example that the Twins should follow in revitalizing the team, but it was an inapt comparison. If you want the Twins to follow someone else's game plan, they need to look at Detroit and Washington. No doubt the Tigers have had better results than the Nationals under the scheme, but make no mistake, Detroit has had their successes and Washington is still seen as an up and coming team.

Terry Ryan is right when he says that free agency alone can't turn around an organization. But it can certainly help. He has his work cut out for him this winter. Let's see how serious he is about making the necessary financial commitments, because "market value" or "slightly above market value" aren't likely to get the job done.