New York Mets general manager Sandy Alderson came to Penn on Wednesday to speak as part of the Wharton Leadership Lectures series and sat down with the DP beforehand. He discussed a wide range of topics, ranging from his time as a Marine, to his work with sabermetrics, to the business of baseball.
Daily Pennsylvanian: You were at Dartmouth as an undergrad and proceeded to go to Harvard Law School, but in between, you served as a marine in Vietnam. How did your experience as a Marine shape you, both then and now?
Sandy Alderson: It was definitely a formative experience, not just in Vietnam but the training. What it provided me with then and over time was a structured way of looking at things without being constrained by that structure or hierarchical approach. The Marine Corps is one of those things where you get a lot of training and indoctrination but you also get a lot of opportunity and responsibility as well. It was quite formative for me.
They say ‘Once a Marine, always a Marine’ and that you can never quite escape it and with that comes a certain responsibility towards the reputation of the Marine Corps, doing your part to ensure that its reputation is as good today as it was 100 years ago.
DP: Back when you were in the Marines and growing up, how much did you follow baseball? And did you see yourself making the leap to working in baseball?
SA: I never imagined that or saw that [coming]. I played baseball as a kid and I played in high school. I played two years at Dartmouth. I often say that the best decision I made early in my life was quitting baseball because it opened up a lot of other opportunities during my college years and I wasn’t getting much better as a player anyway.
I ended up after law school practicing in San Francisco and, as luck would have it, one of the partners in the firm and his father-in-law bought the Oakland Athletics. I was more or less his protégé, he had gone to Dartmouth, he had been in the Marine Corps and is probably one of the main reasons I joined the law firm, so I started doing legal work in connection with the purchase of the A’s from Charlie Finley and the deal closed about a year later.
I did some other things, I did salary arbitration as an outside attorney. About a year after they bought the team, they asked me to come over full-time. I went over as kind of a jack-of-all-trades. I was general counsel, I think the first full-time general counsel in all of baseball, which gives you an idea of how far things have come. Most teams now have two, we have at least three with the Mets.
And then a couple of years later, I became General Manager and largely because we hadn’t, during that two year period, networked enough to know anybody to perhaps interview and offer the job, so I got it almost by default. There was a lot of on-the-job training but as a result, I was very open-minded about things. I didn’t have conventional theories about the game and there were several innovative things we were able to do as a result of simply being open-minded and not constrained by conventional wisdom.
DP: In that regard, you are well-known for your work with advanced statistics and sabermetrics. As an outsider, how did you handle the balance of stats and traditional scouting?
SA: It was difficult to approach it as a balance because I had virtually no experience in the game. I hadn’t been a player. I wasn’t a coach. I had never scouted. So I really didn’t have access to that kind of decision making. In my position, I am basically a decision maker and so I have to evaluate information. It is tough to evaluate information to which you have never been exposed.
So almost by default, the analytics became an alternative and, at least, a curiosity. And ultimately through that curiosity, the analytics could be demonstrated [to be valid] through mathematics, at least to some extent. So to that point forward, I incorporated it into our thinking. We kept it quiet because, to the extent that it was valid, we didn’t want to disclose it to anyone else. It was sort of a proprietary thing on our part. Of course, all that was blown away by the book “Moneyball.”
But we were doing “Moneyball” things back in the mid-‘80s but kept it quiet. The reason analytics have become more prevalent in the game is in part because of “Moneyball.” It was almost a top-down shift.
When I got involved in baseball, the owners and the baseball people didn’t interact that much and baseball people would want to explain to owners that [the owners] didn’t really understand baseball. They understood their other business but they couldn’t really understand baseball [because] it was too esoteric.
What “Moneyball” told them is that baseball was just like their other businesses and as a result, I think that the push for analytics came as much from owners who finally understood that baseball wasn’t Greek. It was economics. It was statistics. It was subject to quantification.
So that was really a fundamental shift and of course, once “Moneyball” was written, the market inefficiencies disappeared pretty quickly.
DP: So how do you adapt to the fact that it is a copy-cat league with each team talking about these kinds of analytical decisions? How do you, once again, try and be innovative?
SA: One of the things that’s happened is that there is an explosion of data. When you look back at the 1980s when we were doing this, there really had very little beyond the box score information. Then, a little bit later, a company like Stats Inc. would hire people to watch a satellite transmissions of games and calculate certain things just by observation.
Today, everything is measured by laser or camera or radar so we have not just hit vs. out. We have location. We have velocity. We have angle off the bat. We have a whole host of things that can be analyzed simply because there is so much information out there.
So then the question becomes what is useful and what’s not. I think there are a couple of things that I’ve found. Number one is you have to be wary of simply being contrarian. It’s one thing to analyze the merits and make a decision accordingly. You’ve got be careful when you are just trying to be different without any substantive foundation.
The other thing is that sometimes the most important thing is the ability to translate concepts into executed programs. So here’s an idea, but how do you implement it on an organization-wide basis? It’s the difference between saying ‘Hey, Robinson Cano is a great player. He’s worth $250 million,’ but there aren’t many teams that can afford to pay a Robinson Cano $250 million so what you really try to do is create your own Robinson Cano.
‘So how do I take the concept?’ I know he’s a good player, why he’s a good player but what I need to do is grow my own in a way. So the question is, how do you take what everybody understands to be paradigm and implement those ideas in such a way that you are continuing to produce those kinds of players instead of having to buy them off the market.
DP: Obviously the business of baseball has changed a lot over the last few decades. How have you changed over time and how has the business of Major League Baseball?
SA: There are lots of obvious changes, not just in baseball but in the sports industry. Incredible growth over the last 25 years, mostly driven by the media and the media need for content. Sports is the original reality television when you think about it. It’s not scripted which is why it is important to maintain the integrity of the game and the integrity of the competition but the game has really exploded from a revenue standpoint, mostly become media and the completion between local and national media, over the air media and subscription media. Premium content vs. basic content.
When I first started, mostly televised games were road games because there was a concern that you would adversely impact the gate. Now, it’s how much money can we make off the television and we’ll figure out the gate later because not only are the numbers huge but they are predictable. They are built-in by contract so there is no risk with those deals once they’re made, whether you are playing well or playing poorly. And everything plays off of that.
You can see that tension between the media and the live gate in every sport. You see it right now in the NFL playoffs. You might even see it in the Super Bowl where in the playoffs in Green Bay and places like that, people couldn’t sell out or almost didn’t sell out their tickets. And why? Because it is such a great experience watching it on TV. Why would I go to the game a pay three grand when I can watch it on TV and see the commercials?
In some ways, it’s a zero-sum game. As media revenues keep going up, it’s partially because of a scarcity of content and it is partly because of technological advances. People love to watch at home. But there can be a corresponding weakness in the live gate for the same reason.
DP: With recent MLB rules, whether it’s with luxury tax or spending limits or different rules with the draft, how do you, with the Mets being in a larger market but with market prices going up, try to field a team that can compete and try to build your farm system when it might be harder to do so?
SA: The structural changes with respect to the draft and some of the other payroll limitations, draft-choice compensation, for free agents and so forth, is definitely an attempt to create some competitive balance and lessen the importance of revenue on on-field success.
So as a big market, the rules are kind of stacked in a way that you have to act like a big market team because you don’t get the extra draft picks. You don’t get this, you don’t get that. What the MLB has proven over the last few years is that you don’t have to have the highest payroll to win. There are tremendous payroll disparities but it doesn’t always translate on the field and quite often in fact does not.
I think that is one of the reasons we’ve had so much labor peace over the last 20 years is that we don’t have a salary cap but there is enough flexibility in the system and enough success among those that don’t spend as much money that we can avoid the cap. So as a result, we’ve avoided the cap and avoided potential strikes and things like that.
Whether you are in New York or San Diego or Oakland, you have to look at what your resources are and what the rules allow you to do and function accordingly. And ultimately, it is not just about choosing the right strategy. It is about executing the right strategy. Execution is just as important as having the right approach.
DP: Moving away from baseball for a little bit, one of the things in Wharton that you are taught early on is about different leadership styles and how different people use different styles in situations. How would you describe your own leadership style and how you work with other people on a daily basis?
SA: I do think leadership is important and it is interesting since I don’t think the same leadership style works in all leadership situations. Some people have the ability to be effective leaders across a number of different sets of circumstances but not everybody.
My personal approach is I think people are the most important thing but ultimately, the way you leverage the quality of the people is through structure and systems. I’m really very process oriented and project driven. I try not to be limited by that information. There is always the question of how much information do you have to have before you make a decision. If you wait too long, that can be as unfortunate as being too early.
But my own style is [that] I try to be professional but friendly. When I got into baseball, I didn’t have any baseball experience. So you say to yourself, ‘How do I survive in this environment?’ Part of my credibility was that I had been in the Marines overseas. Part of it was that I had a Harvard Law degree.
But other things that are less obvious, I kept my mouth shut. I deferred to people who had more notoriety in the game and experience. I answered questions when people asked me. I was typically the only lawyer in the room in GM meetings and things like that.
I didn’t dress like a lawyer. I wore jeans and I tried to dress down a little bit. I tried to stay fit. There are a lot of different ways of doing it to create a level of acceptance and credibility that I didn’t have based on my professional background in baseball and hopefully survive until you did have credibility in the game.
I wouldn’t say I like to make decisions on a collaborative basis but I do like collegiality. I like to make people feel like they are a participant and if they have something useful to say, they seem to be able to say it without fear of mockery. And that probably goes all the way back to the Marine Corps. Sometimes, squad leaders are the smartest people in the room.
DP: With spring training coming up, what is your excitement level going into each season? And, as general manager, what do you think is the most important part of your job? Is it the offseason or the constant day-by-day throughout the year?
SA: I do like the seasonal nature of the game. I always look forward to spring training, not because it is going to be warm and we get to go to Florida or Arizona, but because of the uncertainty of what is going to happen. The emergence of younger players, older players making a comeback.
It is kind of a rebirth and that’s what I love. In fact, it is probably a weakness of mine since I hate to trade young players because I just enjoy waiting for them to arrive. Of course, many of them never do. That to me is the most enjoyable thing.
As far as the rest of the year is concerned, there are two levels of involvement. One is the day-to-day, week-in, week-out, which changes depending on whether you are in season or out of season or how you are playing. But there’s a maintenance element to it. You’ve got to keep things moving, whether you are dealing with the media or scouting and so forth.
But for a general manager, the probably two or three most important periods are the trade deadline during the season and then the winter meetings in the offseason. That’s when you’ve got to produce. That’s when the spotlight is on you. We’re not playing games, it’s about building the team. Those can be the most focused periods of the year.
DP: So with spring training almost here and the winter meetings gone, what do you think about your team this year?
SA: We’re still looking for more players. The offseason develops over time in segments and right now there are still a lot of players out there. The question with teams is how much money do they have left and what are they’re needs.
I like our team for a couple of reasons. The last three years, the strategy I have tried to articulate is threefold: acquire talent and develop talent, create more payroll flexibility, we had a lot of long-term contracts that were just not performing, and third, try and win as many games as you can without compromising one and two.
Now, we’ve turned a corner a little bit, and I’d say that now we want to win as many games as we can while being mindful of one and two but not letting those control our decision making with respect to winning and losing.
So I think we’ve turned a corner and that’s important. We’ve spent some money. Putting aside whether we’ve spent it wisely or not, I think we’ve spent the fifth-most of any team in Major League Baseball on free agents this offseason. Now the Yankees are at [$480 million]. We are at [$85 million] but we’re still the fifth-largest expenditure in the offseason. And we might do something else before spring training starts.
The other thing is that we have some good young players starting to emerge at the major league level and that is always exciting to see how they will do. But we’ve got some highly-touted prospects and a lot of them are coming to Spring Training so it will be fun to see what they do.