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Home Biz of Baseball - Interviews Interview - Tal Smith - Pres. Baseball Ops - Astros

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Interview - Tal Smith - Pres. Baseball Ops - Astros PDF Print E-mail
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Written by Maury Brown   
Sunday, 09 October 2005 12:00

Tal SmithAs the President of Baseball Operations for the Houston Astros, Tal Smith has helped assemble the first MLB team in history from Texas to go to a World Series. But, Smith is more than that. He has been involved in the birth of not one, but two ballparks (the Astrodome and Minute Maid Park). He's also a master at the preparation and presentation of salary arbitration cases, the financial appraisal of franchises and testimony as an expert witness in sports-related litigation.


 
You simply can't talk about most any facet of Major League Baseball in Houston without touching on Tal Smith. Be it assistant GM to Gabe Paul, the development of the Astrodome, General Manager of the Astros, the development of Minute Maid Park, President of Baseball Operations, as well as, contract negotiations and the salary arbitration process, Smith has touched on it all.

Smith is a sage. He's also a longtime member of SABR. If there's such thing as a Baseball Man's Baseball Man, Smith fits the bill. To be involved in the birth of not one, but two ballparks, is extraordinary. His work with Judge Roy Hofheinz on the Astrodome paved the way for countless attributes and amenities of the modern ballpark. Tal's Hill, the 10 degree incline at Minute Maid Park in centerfield, was but one of his ideas for the current home of the Astros. Talk salary structure and you get an insight into how methodical his approach has been when it came to setting contracts based on solid analysis. Smith is legendary in baseball for his ability to see how crucial statistical analysis would be when salary arbitration came into play in the '70's.

Talbot Smith was born in 1933 in Framington, Mass. He attended Culver Military Academy (IN) and Duke University where he earned a bachelor of arts degree in business administration in 1955. Before entering Duke (at the age of 16) Tal spent the summer as a staff announcer for the ABC radio affiliate in Durham, N.C. While at Duke, he broadcast Blue Devil basketball for stations in the region. During the summer recess in 1953, he worked as an assistant for the editorial staff at The Sporting News in St. Louis. Following graduation, he served as an officer in the United States Air Force for two years while continuing his radio work with various sports programs on a part-time basis. Upon completion of his military service, he worked as a news reporter for the Cape Cod (MA) Standard-Times before joining the Cincinnati Reds in December of 1957 as an administrative assistant for scouting and minor league operations.

Tal started his baseball career in earnest within the farm department of the Cincinnati Reds in 1958. He came to Houston in November of 1960 when he was named assistant to the general manager of the new National League Franchise. He was named team farm director of the Colt .45s in April of 1961, a position he held for two years. In April of 1963 he became assistant to the president of the Houston Sports Association, acting primarily as a liaison for the HSA during construction of the Astrodome. In the late 1960s, he also developed the formulas and pioneered the use of computerization of scouting reports and other player data. During the first of Tal's three terms with the Houston franchise, the club signed and developed more players that reached the Major Leagues than any other team.

Following completion of the Astrodome, Tal was named vice president and director of player personnel in December of 1965. In 1972, he was named vice president and director of operations for Astrodome-Astrohall Stadium corporation. In November of 1973, he left Houston to become executive vice president of the New York Yankees, serving in that capacity until his return to Houston as general manager of the Astros in August of 1975. He was named president of the club on Sept. 23, 1976.

Since 1961, he has been owner and operator of Tal Smith Enterprises, a firm which has provided consulting services to 26 of the 30 Major League clubs. The most recognized functions have been the preparation and presentation of salary arbitration cases, the financial appraisal of franchises and testimony as an expert witness in sports-related litigation. Tal also served as the sole arbitor in two disputes involving Major League Baseball where the Commissioner was recused.

In this interview, Tal talks of how he broke into baseball, his work with Judge Roy Hofheinz on the Astrodome, the development of Minute Maid Park, breaking down how he views the arbitration process, memorable cases with Barry Bonds, Bobby Bonilla and Don Mattingly, as well as touching on Roger Clemens, Carlos Beltran, and what it means to be a member of SABR.

Maury Brown

(Source for historical information- the 2005 Houston Astros Media Guide)


BizBall: Can you tell us how you got your foot in the door in baseball? I understand that speed reading or writing was somehow involved.

SMITH: Oh, where did you uncover that? After graduating Duke, I had an ROTC Commission—a couple of years in the Air Force. But my aspiration from the time I was 7 years old when I got hooked on baseball with the Tiger/Reds World Series in 1940 (which obviously dates me)—from that time on, baseball was a passion. Like almost all of us, I didn’t have enough talent or skill to play it professionally, so I turned to other things. I was fortunate enough I got a summer position with The Sporting News in 1953 while I was still in college. Everything I did I tried to center around athletics and particularly baseball.

When I was in the Air Force—obviously I had a two-year commitment, you start planning what you’re going to do. Most of my associates were looking at Fortune 500 companies or their father’s business or something of that nature. Here I was knocking on doors trying to get into baseball. At that time, there were 16 clubs obviously. Wrote letters to everybody; got varying responses—just a brief acknowledgement from Gabe Paul, who said, if I was ever in the area, he’d be happy to meet with me. I wrote back and I got out of service in mid-May of 1957. My wife and I drove to Cincinnati, and I cooled my heels in a small office,—a waiting room, the Reds had their downtown office—waiting for Mr. Paul. Obviously that was not a priority for him. So when he concluded with everything else, they ushered me back at the close of business—the club was on the road. That was the first time I had been in a major league office. I’d obviously been in a ballpark a lot, but never in an office.

I had a brief audience with him. Gabe asked a little about background—obviously at that age I didn’t have much of a background. I did have The Sporting News and I’d done broadcasting. I had a fine education, went to the Culver Military Academy as a prep school and then Duke. Gabe asked if I could type. Well, I had taken typing on my own during my high school years. He asked if I knew shorthand. I sort of lied and said that wasn’t part of Gabe Paulthe curriculum at Duke. He proceeded to tell me a couple of stories about people in business and show business who had actually launched their careers as ”male secretaries”. Gabe pointed out that in baseball—remember that this was the 1950’s—it wasn’t as common or appropriate for women to travel with men on business, especially baseball. It was a man’s game, for the most part.

So, after that ray of hope or ”suggestion” from Gabe, I went back to Durham, North Carolina and I enrolled in the Croft Business School with a number of 17-18 year old high school girls who were taking typing and shorthand. Obviously, I was looking for a shortcut and I had heard of speed-writing. Speed-writing is kind of like Berlitz is to language. It’s total immersion. You use abbreviations and a few symbols and so on. So, I wrote Gabe, told him I was enrolled. I sent him a progress report halfway through. Finished it up and—at that point you start thinking, I’ve got a job.

While I was carrying on this correspondence with Gabe, and other clubs, I said I didn’t want to commit myself long term. I was born in Massachusetts and in the Air Force; I was stationed at Otis on Cape Cod, which we dearly loved. So I checked with the radio station and the newspaper there.

After a couple of conversations with The Stanley Cape Edition, an offshoot of the New Bedford Times, they sort of hired me conditionally over the phone subject to a final interview; then my wife and I drove up to New Bedford to meet with the editor. I left my wife in the car while I ran upstairs to meet with the managing editor. He wanted to make sure that I wasn’t using this as a stepping stone to, say, the New York Times or Boston Globe like so many other college grads were doing. I told him that wasn’t my intention. I guess, in the interest of full disclosure, he never asked about the Cincinnati Reds. That was such a long shot at the time, so I didn’t bring it up. I worked for the paper there for about 3 months.

Meanwhile I told Gabe where I was. So I came home one day; there was a letter from him that told me they had an opening. I negotiated my salary back up to what I was making at the paper, which was $75/week. Gabe had offered me $300/month, a little bit short of $75/week. So I packed up the car and went to Cincinnati.

BizBall: You came to the expansion Colt .45s as an assistant GM to Gabe Paul in November of 1960. Did you consider staying with Reds at the time, or did you see that as an opportunity to continue working with Gabe Paul?

SMITH: I thought it was a great opportunity—very exciting—a chance to play a more important role. So I was excited about that.

BizBall: What type of philosophy, and ways of measuring talent did you learn from Paul that you applied when you took over as the Farm Director of the Colt '45s in 1961?

SMITH: It was great exposure. I suppose people that had the benefit of working for Gabe realized you had to be very thorough; you had to be accurate and leave "no stone unturned," so to speak. This was in the days prior to the Rule IV draft; so amateur scouting was a lot different. Again, just to be relentless and exhaustive in your research and to be aggressive.

BizBall: How did you transition from the GM duties to become the assistant to Roy Hofheinz and the Houston Sports Association during the development and construction of the Astrodome. It's kind of an interesting transition, you went from a being a GM to facility development.

SMITH: Well, this was in the early years of the Houston franchise-a lot of turnover. Gabe left as you know. We set up shop down there in late October or early November of 1960. Gabe called me from the road in April of 1961. We were in a bus station operating the AAA club. He called me to say he was going to Cleveland. This was a shock for a new franchise. Gabe asked us all-and there were some others from Cincinnati that had come down, Bill Giles and Charlie Morris, to stay 60 days before we made a decision. I elected to stay because it was  an exciting opportunity. Well, then there was a changeover. Paul Richards came in and a lot of the people he had been associated with. By the spring of 1963, when it became clear to me that Richards wanted his own people, we just didn't see eye-to-eye, so to speak. I was going to leave to go to Cleveland to join Gabe. Judge Hofheinz called me in and was sort of apologetic. He said that Paul [Richards] is the GM and he couldn't do anything about that. But then he asked me to stay as his aide and take over the liaison work for the club during the construction of the Astrodome.

Again, it was a sort of unique experience, a once in a lifetime thing. I called Gabe and he encouraged me to stay here. If it didn't work out, I could always make a move later on. So I spent two years doing that, and thoroughly enjoyed it. I missed being out of baseball, but this was such an exciting project-you learn on the job as you have to do in other situations.

When I first joined the Reds at the end of 1957, the story I was relating, we had a minor league Spring Training in 1958 in Laredo, TX. Bill McKechnie, Jr. the Son of Deacon, was what was generally termed the Farm Director-in charge of Scouting and Development which generally were combined in those days. Bill took sick during Spring Training. Here I was, I'd only been there with a couple of months of experience. In those days, the rules on player assignments and movements were much more complex than they are today. So, when Bill got sick, Gabe flew over from where the major league club was training in Tampa. He put Phil Segey in charge as the interim Farm Director. Well Phil had a scouting background, but not an administrative background. So, between Phil and I, we had to figure it out and we did. That was on-the-job training. It was sink or swim.

The Astrodome project was more or less the same thing. I mean I had a huge set of plans, the architectural plans, the mechanical, the electrical, and a great big thick book of specifications. I went to the job meetings and just learned enough as I was going along to represent the club and take care of what had to be done. But, it was a fascinating experience.

BizBall: Roy Hofheinz was quite an extraordinary man… lawyer at 19… state legislator at 22… judge at 24, and Mayor of Houston at 40, yet only about a decade in baseball. You worked side-by-side with him; can you give us some insight into Hofheinz, the man, as well as any anecdotal stories about him?

SMITH: Just a fascinating man, a real dynamo, the most eloquent speaker I ever heard in my life—just a master salesman, a master showman. I suspect in your research you’ve seen what he did with his design—and the Astrodome was his concept. The architect and engineers had to draw the plans, but this was Hofheinz’s vision and it was absolutely Roy Hofheinzmagnificent—his sense of show-biz. He was a big fan of the circus and, later on in life, actually bought Ringling Brothers and Barnum & Bailey circus and operated that for awhile. He carried out these themes in all of his homes and his offices. He was just a fantastic salesman.

You’ve certainly heard about the Astroturf– stories when we ran into problems with the grass because of the skylights, the lack of light, the lack of water. We had to find a solution to that. Hofheinz had me go out and that’s when we came across Astroturf. When I reported back to him and we brought the people in from Chemstrand and, when they named a price, the Judge said, “That’s exactly what I had in mind for the advertising rights and publicity for you.” He was always thinking. He was a master of radio and television. A master of salesmanship.

We were the first club with, I believe, what was referred to as “luxury suites”. That was an afterthought, after the dome was already under construction. That was something that Hofheinz and the club paid for themselves when we added the skyboxes at the top of the dome on the ninth level. He was the first one to think of seat options and we never actually exercised that concept, but today, of course, it’s commonplace. He was just a step ahead as a promoter, as a showman and as a salesman.

BizBall: That touches on my next question. A great many facets of the current ballpark design are owed to that design of the Astrodome. The design for a Sky Dome, The Trailblazer and Astrodome Clubs, to the computerized scoreboards that we take for granted today. How were these ground-breaking ideas that Hofheinz was proposing received? How do you think the ownership establishment of the other clubs viewed these radical ideas?

SMITH: I think initially that when he came up with the dome idea and had to sell that to the National League owners—again, if he hadn’t been such a fantastic speaker and salesman, I’m not sure he could have carried it out, because that was, I was about to say ‘radical’, I’mAstrodome not sure ‘radical’ is the proper term for it but certainly a ‘unique’ idea and concern among baseball purists and traditionalists about playing baseball indoors. How’s the ball going to carry? Then when we went to Astroturf and what not, I really think that if we hadn’t tried natural grass to begin with, I think we had to do that regardless of whether it was going to work or not. After you had the dome open if the grass didn’t survive and you went to something else, there wasn’t any alternative. I think people were in awe of what he did. I think sometimes they were skeptical, but, again, as you’ve traced his political career and his accomplishments at such an early age from the standpoint of county judge and mayor and legislator and so on. He just accomplished so many things. He was several steps ahead of everybody. I think at first it was viewed maybe with alarm or concern and whatnot, but, as things worked out, I think people marveled at it.

BizBall: How did the name “Earthmen“ evolve for the ground crew at the Astrodome?

SMITH: This was in the final stages of the construction, shortly before Opening Day. I was out in the Stadium tending to things, checking on things and so on. I went back upstairs to the Judge’s suite. At about this time, he had started his quarters in the right field section and I joined the Judge and some other people up there. This was later in the hours and they were discussing various things—I forget exactly what it was. They were making some comment about the entire theme of the Space Age with the uniforms. I was frankly being facetious; I was being sarcastic. “I guess we can call the ground “the Earth,” we’ll call them ‘Earthmen’.” I just thought it was a play on words, but he liked it, picked up on it. That’s how it became the “Earthmen”.

BizBall: Back to your position as GM of the Astros… You seemed to have a clear structure to how you built teams in terms of salaries in the ‘70s. You often had incentive clauses within your contracts, which allowed you to keep the base low, often in the $200,000 range. The deal that John J. McMullen did for Nolan Ryan completely broke with this structure you had and, in the process, gave baseball the first $1 million contact, which set a precedent and opened up the glass ceiling for salaries.

Can you take us back to that deal, and what your reaction was to it?

SMITH: When I came back to Houston, for the most part, the club was being operated by the creditors, GE Credit and Ford Motor Credit. So, basically, any dollar we spent we had to find or save somewhere else. They were just interested in preserving asset value. When I came back from the Yankees in August, 1975, remember, that was a year that the Astros finished 43 ½ games out; so we had a lot of work to do and we didn’t have a lot of money to spend. You just try to put it together and I’ve always been interested– I’m not a lawyer but I’ve always been interested in law and contracts and those kind of things. I believe we were the first club to write an option clause for players. I wrote one for Ken Boswell, who was at that time a utility player and pinch hitter for us. We didn’t know how long we’d need his services, but I thought he was a valuable guy, so I wrote a contract and gave a consideration of $5000 for an option on his services for the second year. I’m not dead certain of this, but I had never seen any options clauses before that.

I felt that players’ performances, and I still do, that they [the contracts] should be tied to performance, obviously. You don’t always have that benefit but that’s why I went to contingency clauses. As a matter of fact, I went to New York and spoke to Commissioner Bowie Kuhn and his advisors and staff. I maintained then, and I still do, that performances bonuses and contingency clauses in contracts should not be limited or restricted as they are today to innings pitched or games started or total plate appearances. You always negotiate on wins and saves and RBIs and home runs and batting averages, and so on and so forth. I still maintain that’s the way performance and contingency clauses should be based. The argument against it is, “Well, you put too much pressure on the manager.” You have the same thing today, if you have a guy down at the end of the season that needs two more starts before the option kicks in. I’m sure you’ve read enough about those issues that have arisen as a result of that. But, that was sort of my theme.

In ’79, we had J.R. Richard, and Jose Cruz who were both going to be free agents. Those were long and difficult negotiations. Tom Reich and I negotiated the J.R contract for the whole season. Obviously, as you understand, the clock is important. It provides leverage for the most part to the player and his representative. Tom and I hadn’t always worked well Nolan Ryantogether, but he’s got a job to do. J.R. went down to the wire. We didn’t finalize that until the World Series– the Pittsburgh-Baltimore World Series. We finalized it in Pittsburgh shortly before J.R. would have been out on the market. I’d gotten through the same thing with Cruz. We had that one done by then, but that had been a long, protracted negotiation. J.R.’s, as I recall, I had him signed to a base salary of $200,000. It was a long one, it was going to be a five-year contract with some with deferred compensation, a lot of incentives based into it. Obviously, you base some things on starts, awards, honors and whatever you can write. It gave him the potential, the chance, to realize a great deal more money. Tom was concerned about providing something for J.R. with something at the end of his baseball career, which is why we had the deferred comp in there.

But then, when the Nolan Ryan negotiation came along, that was a million dollar base salary. This was shortly after McMullen and I came to a parting of the ways. But just before that, obviously Tom Reich and J.R. were very upset. J.R., to me. was the dominant pitcher in the game in 1979. That was an issue. McMulllen ultimately had to tear up the Richard contract and rewrite it and vest most of the performance bonuses in base salary. Then, of course, unfortunately J.R. was stricken during the 1980 season. So, from a salary standpoint, instead of $200,000 he would have been making [more], which ultimately proved to be to his benefit. Obviously, he was entitled to the rewritten contract.

BizBall: Let’s jump forward to another stadium you had a large part in, the current facility that the Astros use, Minute Maid Park. “Tal’s Hill” shows just how much influence you had on the design of the facility. The 10-degree incline in centerfield is something wholly unique to Minute Maid Park and something that has garnered considerable conversation from both purists and those following ballpark architecture.

Can you walk us through how you came up with that concept, and what if any hurdles you had selling the design aspect, and what type of dynamic it has created now that it has been in use since 2000?

SMITH: Basically, in the planning and design stage of the stadium, there are a lot of people involved in the design team. The professionals—the architects and designers from HOK … from our staff, Drayton McLane is a real hands-on owner and was very interested in that. And Drayton and Bob McLaren, who at that time headed up the business aspects of our operation, and Pam Gardner, who is now President of Business Operations, and Rod Matwick and myself … and a lot of people involved. And we had a lot of sessions. Once the location, site, and footprint was decided, with the anchor of Union Station, and after we finalized our basic concepts such as the seating bowl and how many levels, Drayton said: “What can we do from the standpoint of the ballpark—the inside of the playing field— what can to make it unique?" As you and SABR members are, I’m somewhat of a baseball historian—perhaps not to the degree that some SABR members are. I talked about some of the things about the vines at Wrigley—about the monuments which used to be in play at Yankee Stadium--about the dimensions of ballparks from the standpoint of earlier eras such as how deep Forbes Field was.

By this time, I think I had gone back and charted field dimensions for all the existing ballparks and former ballparks. I presented this and talked about it, talked about the dirt strip between home plate and the pitcher’s mound, which used to be standard in every ballpark, and I mentioned the terraces at Crosley Field and reminded them of Fenway Park. We talked about minor league ballparks and Durham Athletic Park—a lot of places that had terraces, embankments, or unusual characteristics. I was simply laying this out there for the consideration of the people on the design team. I’m not necessarily an advocate of any particular [design]. I’m basically answering the question, “What can we do?” “ Well here are some ideas”.

The architects and designers of HOK picked up on it with an early plan. The schematics had the terrace out in center field and the dirt strip between home plate and the pitcher’s mound. I didn’t know how long it would survive.

I can recall Buck Showalter– I’m not sure what influence this had, obviously anybody who is a historian knows of the dirt strip between home plate and the pitcher’s mound. But I can recall Buck was in town doing some scouting for the Diamondbacks and the [Houston] Tal's HillChronicle had a color rendering of the schematics of the field on the front page of the paper and it showed the dirt strip. The next thing I knew, the Diamondbacks had it incorporated. That may have happened in any event. It was not all that unusual for anyone who knew anything about the former ballparks. But it also didn’t go by the wayside, because that was going to be different—because Detroit was going to incorporate it—and so we talked about flagpoles. A lot of our people wanted the flagpole in play as long as it was properly padded. I know that caused a reaction when people would see any renderings of the proposed ballpark. “You can’t have the flagpole in play.” We said: “Of course you can.” It was rather surprising, even, when we sent in the plans to MLB and got a response back about that flag pole. “There must be a mistake the flag pole’s in play.” I said, “You haven’t been to Detroit.”

I was surprised that the Hill survived. One of the architects, from a naming standpoint, in the early plans, in our meetings or references, referred to it as Tal’s Hill. There wasn’t anything else to call it and I had sort of thrown the idea out there. The name sort of stuck more as an inside reference than anything else. Obviously, today, I accuse people, “You wanted to name it [Tal’s Hill] so you would know who to blame for those who didn’t make it!” I understand it’s very, very popular with our fans and I get a lot of comments. Particularly when somebody reads something about people from other areas, I take great exception to it. Frankly, it hasn’t interfered with play at all. You’ve seen some of the pictures, probably on SportsCenter. It really hasn’t caused a problem. I see more players trip over the pitcher’s mound than I do over the hill we have in center field.

BizBall: I want to shift over to something that is a large part of this—a large part of your history and what you do now. The arbitration process is something that is, to most baseball fans, a mystical process. When the process was first put in place, the vast majority of cases were won by players or, rather, player agents.

When John McMullen let you go, you first assisted the A’s with arbitration cases with Mike Morris and Tony Armas.

Do you recall these first case, and how you approached it?

SMITH: Gene Michael—I forget the others on there—we did four cases. I’ve done some cases since– in Houston in ‘80; I helped Sandy Alderson in 1981 with their two cases.

I started getting calls when I lost my consulting practice. It was even before that. I guess I announced that in April. I had only done the Oakland stuff. I was getting calls from people who wanted to ask questions or get a little help on this and that. Dick Wagner was one. Obviously, Oakland, Roy Eisenhart, had called and that’s what got me to go out there to help them with their two cases.

That’s when I lost the consulting practice and I started getting calls. I think Jim Campbell, the GM in Detroit at the time, was the first one. He asked if I’d handle their arbitration. Well, obviously, I knew the GMs and they knew me and, as I said, maybe we had done some innovative things during our Astros days in the ‘70s with contracts, the options and the performance clauses and so on and so forth. So Campbell called and asked if I’d do it. One thing led to another. He talked to some other people and I started getting some inquiries. We ended up representing six clubs in 1982.

I put together a team. Gerry Hunsicker was part of it; Steve Mann, who had worked for Bill Wright and was brought in as an analyst in the late ‘70s for a year or so for the Astros. I put together a team of people that I knew and we lost the first case in ‘82 to Willie Mays Aikens and won the next seven, including three against Dick Moss and three for the Yankees. That sort of set us off on that.

As far as how we did it, I just have a sense of what’s important in establishing a player’s value and tried to present in a well organized, orderly fashion to an arbitrator and make the distinction between players that are arbitration eligible and those that are free agents. To me, they were two different markets at that time. I think over a period of time a lot of clubs lost sight of that and lost that advantage. That’s a long drawn out thing that I’d be happy to talk to you about at some other time. It’s a theory that worked very well until the clubs, by their own practice, killed it.

BizBall: In the early days of arbitration you seemed to adapt where others did not on management’s side of the table. You seemed to grasp that statistical analysis played a key role in presenting your case to the arbiter. Did you try and pass on what was working for you to others to try and get owners and GMs to understand how the arbitration process worked?

SMITH: At one time, we were representing 13 clubs. In one year, as you know, 1986, we handled 96 filings and actually presented 25 cases. I really suspect—at that time I think—that the union was trying to test us and see if they could break us perhaps from the standpoint of volume.

I have certain theories, beliefs and philosophies as to how to approach this and how the salary structure should be determined. Some people embraced it and others didn’t understand it, I don’t think. I think they really clouded the distinction between someone  that’s got additional service—that has six years—and has earned the right to be a free agent is different from somebody—a third-year player— eligible for salary arbitration. The Basic Agreement, to me, clearly distinguishes on service and affords and grants players various rights depending upon that service. Those rights should have different value. As I said, all that’s been clouded and, as time went on, we had to adjust because there were too many examples of clubs ignoring that or doing things that just didn’t make a whole lot of sense. You know, frankly, a lot of the problem is that Clubs are responsible for the actions of others, whether deemed appropriate or not.

BizBall: In your opinion, how often does the arbitor already know which figure he will choose—just by viewing each side’s written submission. In other words, how often does oral argument sway the arbitor?

SMITH: As you probably know, there isn’t any brief submitted in advance. While, presumably, the arbitrator comes up with this as it stands—ideally not even knowing who the player is going to be. It is basically an oral presentation backed up by your written exhibits. I’m not sure that’s generally understood. There are some arbitrators that are obviously well-informed fans that have their own opinions. That’s why I think it’s important for them not to know in advance. I don’t want them going to a scouting notebook or something of that nature and form their conclusions based on what somebody else has written. I think they should come in as much as possible with an open mind and listen to the evidence that is presented.

I’m sure we’re all human and, if it’s a prominent player, it’s tough to win cases with prominent players. I still maintain, along with everyone in the room, that we won the case with Don Mattingly with the Yankees. I can recall leaving the hearing and walking down the street with union reps and agents and everything else and everybody more or less conceded that the club had prevailed, not because Mattingly wasn’t a great player—he was a great player—it’s a question of what’s the appropriate value. Yet, when we got the decision, it was in favor of the player. It was a case heard in New York with a New York arbitrator. Those things happen.

I think the decisions in those days prior to the institution of a panel, I think if you were to poll both sides—the union reps or the agents, and the club practitioners—I’m not sure (before the decision) that they would get half of them right. We all have a sense you go in Don Mattinglyas an advocate, you present your case and you’ve got a pretty good idea as to whether won or not. But, sometimes the arbitrator didn’t see it the same way and you get surprises on both sides. We got some wins—some calls for us—that really surprised us.

BizBall: Sabermetrics, especially among the baseball community, is fairly well known, but you started to collect data and present that with computer analysis. In the process, I think that some people believe that there’s just this overwhelming flow of statistical analysis that is done. Is it a case where actually ‘less is more’ in some cases? You’re dealing with arbitrators who may not fully understand baseball.

SMITH: As a standpoint? I think that very clearly you run the risk of overkill. You’ve got to keep this pretty basic. In the first place, you’ve only got an hour. It is not an exercise that is really designed for some of the more sophisticated or advanced sabermetricians. It’s got to be more fundamental and basic than that; otherwise you’ll confuse the issue. You still get back to comparing one player to another, as to what the salary should be and so on. I think you’ve got to be very, very careful. I’ve got an appreciation for sophisticated statistics, but I don’t think that’s the exercise that’s involved when you get into arbitration.

BizBall: There seems to be—and maybe this is just a cycle—there seems to be a decline in cases that are going to hearing. I can only think of three this season. Why do you think there has been a decline or do you just think it’s just the way this off-season cycle went?

SMITH: Well, it may be somewhat of a cycle. It had seemed that one group this year didn’t settle, that went down to the wire; as a matter of fact, the actual cases were relief pitchers and all the late settlements seemed to be relief pitchers and not the front line closers. To some degree that goes in cycles, because there have been settlements among a certain group—whether it’s the MLS 3 relief pitchers which was basically the group that was late in getting issues resolved. It sort of impacts everybody in that class. It’s a time-consuming process.

You’d have to talk to agents. Some agents enjoy the process, but I think there’s risk for agents. If they lose a case, then they risk losing the client. If they win the case, it’s probably because the player feels that he’s a very good player. From a club standpoint, there’s some tendency to feel that they don’t want to subject the player to it. I don’t think it’s all that negative. We’ve done almost 150 cases, I think, and I can only recall two or three where I thought there was any animosity and so on. I think the tone is really established. To me it’s nothing more than an ongoing discussion or debate, the same as you would have in negotiations, except for the fact that it’s being presented to a third party. It’s not one where you have to be derisive or castigate the player or anything else. I mean the numbers are the numbers. When you’re negotiating, if a guy hit .220 or .235 you bring that out in your negotiations. If he’s got an ERA of 5.00, you’re telling the agent that; you’re telling the player that. So now your simply telling that to a third party. I don’t think it has to be denigrating.

There are some people that think that it’s just not in the club’s best interests to subject the player to that. I don’t necessarily subscribe to that. I don’t think there’s all that much harm done. I still see many players that we’ve arbitrated against. Of course, everybody likes to win. I like to win; the player likes to win. But I don’t think it’s affected our relationships or dealings. They still go out of their way in most cases to speak. Barry Bonds speaks to me. We beat Bonds twice and Barry and I still kid—you may call it agitate about it. I don’t think it has any lasting consequences. Most of them will say, “I still came out ahead anyway.” Bobby Bonilla—I worked with Bobby twice and I won both of those cases—now works with the Union. When I see him during arbitration season, he’ll sort of joke about it and say, “I still came out way ahead because the money’s so great to begin with.”

BizBall: What’s the most memorable case that you were involved in?

SMITH: Oh boy, that’s hard to say. I mean it was interesting doing the Bonds and Bonilla cases. The Bonds case is one of those players. Mattingly is one of the toughest losses, because I have great respect for Don as a player, I clearly thought we won that case. I don’t know if I can single out one over the other. We’ve done so many over the years. We’ve been upset about some of the calls, some of the decisions and what not, but it sort of evens out because you win some cases you didn’t think you were going to win.

BizBall: Your son, Randy, has followed in your footsteps, and has been a GM of the Padres and the Tigers. You’ve conducted some trades with them and so, I have to ask, is it a thin line dealing with family or does it provide an advantage for both parties?

SMITH: Oh, I think it provides an advantage. For the most part, I’ve always approached trades…I don’t think you’re fooling anybody or snookering anybody. I’ve always tried to take a direct approach. I’ve tried to sit down and figure out to begin with what I need, where I might get it, and what makes sense to that club. You try to do the matches. I don’t think you make significant trades by necessarily being smarter than somebody else. I think maybe if you do more research and work harder…. I think that most of the trades were ones that made sense to both clubs. Ideally, that’s the way it should be.

The deals we made with San Diego and Detroit were pretty much the same way. What do the Padres need? What do we need? What’s surplus? What’s expendable? What can they do? and so on. And that’s how they come about. You sit down and have an open discussion. Frankly, trades I made—whether it was Bing Devine, Pat Gillick, or Lou Gorman, or anyone else over the years—were pretty much the same way.

When I need a shortstop…say Craig Reynolds is a promising young player in Seattle. I can see where he might be expendable to them. What do they need? I’ve got Floyd Bannister; we’ve got pitching depth. Bannister should be attractive. Lou Gorman made that deal in a very few minutes; …the same thing when I was dealing with Bing Devine or Pat Gillick or anybody else. I think if you’re candid and objective…. You’re not trying to fool anybody. You’re trying to do something that presumably will help you and, perhaps, help the other club. It was a whole lot easier with Randy; I guess he sort of did it the same way I did.

BizBall: Here we are in 2005 and there were two high profile free agents this past off-season for the Astros. You had to deal with Carlos Beltran and the other was Roger Clemens. How tough were the negotiations with Beltran? How do you feel about retaining Clemens?

SMITH: Oh, we’re delighted to have Roger. I hoped that he would decide to continue his career. He’s still one of the very best pitchers in the game and, arguably, one of the greatest pitchers of all time. It’s an ideal arrangement for him. He had a fantastic year last year-an exciting season. He’s at home. We’ve been able to work it out where, when he’s not pitching, he’s able to spend some time with his kids and see them play and spend some time with his [now late] mother. As it stands, we were certainly hoping that Roger would reach a decision where he would want to continue playing. Obviously he did. From a negotiation standpoint—obviously he’s a great pitcher and his representatives, Randy and Roger ClemensAlan Hendricks, recognize that. Just the way the Basic Agreement is constructed, they had the advantage of using the arbitration process. Roger was not yet ready to make a decision as to whether he was going to continue or not. So, from our standpoint we had to offer arbitration or foreclose the possibility of negotiating with him, which we couldn’t do. So obviously, that helped to set the value.

The Beltran negotiations, they really didn’t get to any meaningful dialogue until the final hour before the deadline that we faced. It’s just tough to do a deal of that magnitude in the final hour. Drayton asked on many occasions if we could go visit with Carlos in Puerto Rico—if we could talk to him. We were denied that opportunity and told that, if we did, that would foreclose any negotiation with Carlos and perhaps some others down the road. Again, when you have a situation like that, the agent and the player set ground rules of what we could do.

Some people have suggested, “Well, you should have issued an ultimatum.” That’s all well and good. That doesn’t appear to me to be the right thing to do to your fans … to just foreclose any possibility. I don’t think Scott Boras would have reacted to any ultimatum that we might have established as far as “This offer is good until December 1, or December 10….” I don’t think that would have worked. All we would have done at that point is, with absolute certainty, denied the Astros any opportunity. As it was, I’m not sure how great an opportunity we had. It didn’t work out for us. But I don’t think there’s anything, in retrospect, we could have really done other than perhaps close the doors earlier, write it off and go in another direction. We wanted to get Carlos, if at all possible, but that’s the course we chose.

BizBall: What do you like about SABR? And, making a case for it for those who are not members, what do you think they gain from it?

SMITH: Well, I regret that I didn’t have the opportunity or time to be more involved. In the early years, I actually served as an Officer and I enjoyed that. I’ve got great respect for the  people in SABR. Obviously, we share a common interest. The research work and the literary efforts by SABR members are extraordinary. That’s the principal benefit I get out of it today. I’ve been unable to attend the annual conventions in the last several years. I hope that, as time goes on, perhaps I can pick that up again.

I heartily endorse SABR to anybody that has baseball interest. From the standpoint of the local regional meetings, the national convention, and the publications, the research, I just think it’s a fantastic association for anybody that has a deep and abiding interest in the game. I certainly encourage anybody to join. As I said, I wish I was able to participate to a greater degree, and perhaps down the road I will be able to.

The following interview was originally published on the SABR Business of Baseball website, and can be read here: SABR Business of Baseball Interviews Page

Interview conducted by Maury Brown on 5/16/05.
Transcribed by Steven Charnick and Maury Brown.
Edited by John Ruoff.

 
 
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