The Cardinals Way (8 page)

“First off, we used to have organizational meetings, where all the scouts would attend,” DeWitt Jr. said. “And it was a little bit different from what we do now. Mike Jorgensen was the farm director at that time. So when I first took over, I went to the meetings, and I spoke to the scouts. I said, ‘One thing you should know is, I'm totally committed to drafting and signing the best players. We will never back off from a player who is a talent because maybe there's some signability issues—I mean, within reason. But this is the lifeblood of the business. I know what you go through—the long hours, the travel. But it's an important job. It's hard. You see all those players, and then there's a draft—you love a player, and somebody else takes him. So it can be a thankless job.'

“I wanted to let them know I understood that. I always delivered that message, and I'd like to think they knew it was true.”

DeWitt had a chance to prove it the year after he bought the team. He recalled sitting in the 1997 draft room. Both DeWitt and Mozeliak described a draft board set up traditionally, with 100, maybe 125, names up there in order.

“So we made our first pick, and then, as the pick's made, you take the name off the board and throw it in the waste can,” DeWitt said as we chatted in his office a few hours before the 2014 draft began in June. “He's gone. And as we were approaching the second round—and we picked kind of low because we won the division the year before, and we'd picked Adam Kennedy.

“In the first column, all the names were gone except for Rick Ankiel. As the second round began, the group's talking about ‘Well, are we going to take this guy or that guy, if he's available,' and I said, ‘What about Rick Ankiel? Tell me about Rick Ankiel.' I didn't know Rick Ankiel. And they described him as this impact, great, left-handed high school pitcher, and I said, ‘Why aren't we taking him?' They said, ‘Well, you can't. He's not signable.' And I said, ‘What do you mean he's not signable?' They said, ‘Well, he's got Scott Boras for an agent, and if he doesn't get a multimillion-dollar contract, he's going to go to college.' I said, ‘Oh, really? Is he a good student? Does he really want to go to college?' And they said, ‘No. He wants to play.'”

The price tag Boras floated was based on the year before, when Travis Lee, an elite prospect, had been declared a free agent and received $10 million from the Diamondbacks. Boras told teams it would cost something similar to keep Ankiel out of school.

“And then I kept probing,” DeWitt said. “And they said, ‘Oh, well. It's going to take at least three million,' and I said, ‘Well, we'll see. But I think we should take him,' and so they took him.”

The signing of Ankiel, who would become of the elite young pitchers in the game as a twenty-year-old for the 2000 Cardinals, before arm and psychological difficulties forced him from the mound and into a productive career as an outfielder, came down to the final day.

“It was a typical Boras scenario where he's going to enroll in the University of Miami if he didn't get three million,” DeWitt said. “And we said, ‘Two and a half million or have a good time in college,' and he took the two and a half.”

Mozeliak described this approach as a huge change from previous practices, which were, in his words, “almost penny-pinching, if I may say so.”

No longer. The Cardinals grabbed another Boras client in the 1998 draft, J. D. Drew, who'd sat out an entire year rather than sign with the Phillies in the 1997 draft. They went above and beyond in 1998 to bring in the multisport star Chad Hutchinson.

“But my point of all of this is we were aggressive then,” Mozeliak said.

The problem with the strategy change wasn't the going-above-slot for players. But the failure to make the draft focus comprehensive didn't change the overall quality of draft hauls beyond them.

Ankiel and Drew paid off. Ben Diggins, drafted but unsigned in 1998, and Hutchinson didn't. But the Cardinal drafts throughout the rest of the 1990s, into the early 2000s, left the franchise without the kind of steady pipeline of talent that helped the teams from that era compete. This was a minor problem within that era, but not one Cardinals GM Walt Jocketty couldn't overcome, primarily through free agency and the salary dumps of other teams.

As the twenty-first century commenced, that began to change, notably with the 2002 collective bargaining agreement (CBA).

“Back then, the environment was such that a lot of clubs, for whatever reason—whether it was going younger, or financial constraints, or other reasons, were a little more willing to give up players we thought could help our club,” DeWitt said back in August 2013. “So we were able to make trades for Jim Edmonds, and Mark McGwire, Scott Rolen and Darryl Kile—really key players who had great seasons with us and really elevated the franchise over that period of time.

“But we could see the landscape changing. And frankly, we pressed the draft and were aggressive in the draft … but there wasn't a lot of depth to that. When you sign free agents, you're giving up draft picks. And when you make deals, generally you're trading younger players.”

Meanwhile, the 2002 CBA, which DeWitt describes as the same “intellectual underpinnings” as the subsequent 2006 and 2011 agreements, added revenue sharing at a level that allowed many more teams, even the bottom-feeding financial franchises, to keep more of their young players. Gone were deals to dump salary expenses out of necessity. And teams could extend their valuable young players to keep them from free agency.

“The implications are, I can't go get Jim Edmonds because they can't sign him,” DeWitt said. “Player resources become much more valuable.”

So the Cardinals found themselves, in 2003, with a payroll of $83.4 million, good for eighth-highest in baseball.
3

But DeWitt recognized that $83.4 million wasn't going to buy what it once did. And it wasn't just that the Cardinals would have to spend more, though that would prove to be true. It's that those players they once bought with their $83.4 million wouldn't even be available.

The Cardinals were winning. Everything looked great on the field. But their ability to compete with the New Yorks and the Bostons would disappear if they continued with their current plan, especially with the low picks that come with winning. And they'd fall behind even those who spent less but did a better job of producing young talent. To guard against this, DeWitt began encouraging offering arbitration to would-be free agents, in large part to collect draft picks if they signed elsewhere. Current Cardinal standout starter Lance Lynn, drafted with a compensation pick for losing Troy Percival after 2007, is a fine example of this strategy in action.

Still, the Cardinals had a problem, though few other than Bill DeWitt Jr. realized it. Even within his own organization. Even in the eyes of his own team's general manager.

It was time for DeWitt to call for some help from the outside. He went with a guy who'd redesigned the way Lands' End did business, played fantasy baseball, and had never before spent any time in professional baseball.

 

4

LUHNOW ENTERS

He that will not apply new remedies must expect new evils; for time is the greatest innovator.

—
F
RANCIS
B
ACON

So I'm thinking, “What is Tony [La Russa] thinking? Here's the
PetStore.com
marketing guy in with DeWitt.”

—
J
EFF
L
UHNOW

Jeff Luhnow had far more in common with you in the summer of 2003 than he did with the decision makers in Major League Baseball.

You know that famous Billy Beane quote from
Moneyball
—“We're not selling jeans here”? Luhnow had actually sold jeans. More specifically, he'd been hired by Lands' End to improve how they sold jeans online.

Luhnow was a business-consulting specialist. He'd done this work first for McKinsey, then struck out on his own for several years. He was three rounds of investment into the work at his newest start-up, Archetype Solutions, described by Luhnow as “mass customization of apparel for brands like Lands' End” in August 2003 when an old colleague of his, Jay Kern, sent him an e-mail.

“I forgot who his father-in-law was so I did a little bit of research and figured out it was Bill DeWitt Jr. because I knew him before he married into the family,” Luhnow told me as we sat in the visiting manager's office at Citi Field in September 2014. “And I was perplexed as to why the owner of a baseball team would want to talk to me.… But it was, like, ‘Hey, Jeff. It's Jay. How's everything going with the business?' Blah, blah, blah, you know. ‘By the way, my father-in-law, Bill DeWitt Jr., wants to talk to you.' And I was, like, ‘Who is this?' Like, took me one Google search to figure out who it was. And then I remember and I started going, ‘Yeah, Katie DeWitt and he married her, and her father ended up buying the team a few years later.' And I'm, like, ‘Okay. This is a baseball guy.'”

Luhnow, like so many of the most influential figures in baseball's evolution over the past decade, had just read
Moneyball
.

“My ex-wife bought it for me. My birthday's June eighth. The book had just come out. I was in the Bay Area so there was a lot of talk about it on the radio. I got the book. Read it front to back. I was interested but that was about it.”

This is not to say that reading
Moneyball
was the sum total of Luhnow's interest or background in the sport. His interest dated back to his parents—especially his mother, Luhnow says—and a childhood following the Dodgers from Mexico, with trips to the Astrodome thrown in when he attended summer camp. Accordingly, he'd reached out to fellow Penn alum Peter O'Malley after graduating: “Is there room for any person who has an engineering and business degree? Are there any jobs in baseball that are interesting?”

Luhnow never heard back. It didn't stop him from doing the parallel work that so many of his generation did, these shadow front offices making their way ultimately into journalism, finance, law, and other high-profile nonbaseball industries—but always, as Bill DeWitt put it, “looking to get back.” Baseball in the blood.

These were not people, though, who generally ever got the chance to make decisions for Major League Baseball teams. So instead, Luhnow sat in the bleachers at Wrigley Field.

“When I was in business school at Kellogg, I took a class in management strategy, and I chose to study the Cubs,” Luhnow said. “So I did a whole paper on the Cubs, and when I did that, I did a lot of research into the industry, what the key success factors were to compete for a team like the Cubs. I was also spending many afternoons in the bleachers drinking Old Style beer and yelling at Sammy Sosa. So I learned a lot about the business side of baseball, as well as the fan experience. And I've been playing fantasy baseball for close to fifteen years and knew every player up and down every system. But I really had no intention or thought of venturing into baseball.”

Luhnow in his career, instead, bounced from start-up to start-up, got them up and running, then moved on to the next challenge. So, three investment rounds into Archetype Solutions' development was the ideal moment for him to take on something new, intellectually and emotionally.

“I was pretty close with a lot of venture capitalists because we went through a lot of funding for both my companies, and I really thought my next step was going to be, they were going to insert me into one of their companies because VCs always need CEO types to run companies,” Luhnow said. “So I figured that would be my next step . My career was fine without baseball. Jay calls and I end up having my first call with [Bill]. Jay introduced us and was on the call and we really [connected]—it was supposed to be a forty-five-minute call. It wound up being about two hours. And it was really just a very pleasant conversation. I shared a lot of my thoughts and he asked a lot of questions, and at the end of that conversation he asked me to come to Cincinnati to see him.”

“I was talking to my son-in-law about the type of person we needed,” DeWitt recalled in a May 2014 interview with me. “Because I thought we needed a fresh look. We were a pretty traditional team, doing things pretty traditional ways. And I wanted somebody fresh, to give an outsider's perspective. And to do more research and analysis. And [Jay] said, ‘I've got the perfect guy. He's a baseball fanatic. He's a great analyst for McKinsey. And I know he would love a project like what you are proposing.”

So Jeff flew to Cincinnati to give what turned out to be a life-defining presentation. In the middle of fantasy-baseball season, Luhnow told the owner of the most successful franchise in the National League how he'd change the way his ball club operated.

“We talked through all different elements of baseball and the club and where it was going,” Luhnow said. “And he gave me some background on who the characters were from the organization to the ownership though the general manager. Everybody else. And by that time I had done a lot more research because I had three or four days to prepare.

“So I came in with—I kind of treated it like I would a McKinsey study where you just kind of figure out—if I were the owner of a baseball team, what would I be concerned about? Where are the Cardinals today? Where is the industry going? How are the Cardinals thinking? And a lot of the things that I had prepared to talk about, Bill was very much on the same page about these things.

“And so we had a really good conversation. And then I don't remember all the sequence of conversations, but I do know at one point he said, ‘I want you to come to St. Louis and meet Walt [Jocketty] and meet some other people.' Some of his partners. And so I remember we were playing, interestingly enough, the Astros. The Cardinals were at home. It was the end of the '03 season and I met Walt.”