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Organizational Reports
Written by Devon Teeple   
Tuesday, 06 May 2008 23:00

Pirates Organizational ReportThe following is a continuation of our Organizational Reports, filed by Devon Teeple. As with the prior report for the Toronto Blue Jays, this report delves into the Pittsburgh Pirates historically, financially, and from a facility perspective. -- Maury Brown

The Pittsburgh Pirates are based in Pittsburgh Pennsylvania, and in the National League Central Division. They were not always called the Pirates. The team has been in existence since 1876. Despite being one on the last charter teams introduced in the “National League”, the team in Pittsburgh was playing “professional baseball since the 1870’s”. Teams of those eras were called independents, who were barnstorming through the areas, not affiliated with any organization, although the players were paid salaries and were run as a business organization. (http://en.wikipedia.org/wiki/Pittsburgh_Pirates). In 1882, the strongest barnstorming team was introduced into the American Association as a founding member. The team in those days was called the “Alleghenys”, as they were their stadium was located across from the Allegheny River. After five so-so seasons in the A.A., they were introduced into the “National League” in 1887. In 1890, they were merged with the “Players League” franchise in the city after that league folded. The majority of the players’ contract in the defunct league were sold to teams in the National League and the American Association. Most notably, highly regarded Philadelphia Athletic second baseman Lou Bierbaue, who's contract was sold to the Pittsburgh, on the grounds that the Athletic’s had not reserved him.

The Athletics protested and one American Association official called the Allegheny’s actions “Piratical”. The accusations did not stand and the team was cleared of any wrongdoing, however they made light of the situation and began calling themselves the “Pirates” for the 1890 season. The team first acknowledged the new nickname on their uniforms in 1912, and followed that up by having the worst record in team history, going 23-113.

The Pittsburgh Pirates as we have known them for years have had tremendous success not only in the standings but also with Hall of Fame caliber players. The team has accumulated 9 Eastern Division titles, 9 National League Pennants, and 5 World Series Championships, with the last being in 1979. Their Hall of Fame inductees include the Legendary, Jack Chesbro, Waite Hoyt, Ralph Kiner, Rabbit Marranville, Bill Mazeroski, Willie Stargell, Pie Traynor, Honus Wagner, Lloyd Waner, Paul Waner, and Roberto Clemente. Unfortunately, all good things do come to an end, and the glory years of the Pirates have long since past, with one of the last images of the great Pirate teams, Sid Bream scoring the winning run against them in game seven of the 1992 NLCS. 

Since then the Pirates have endured what is now considered a historic losing dynasty. As reported by Jonah Keri of ESPN's Page2. The following teams have a history of losing, but not just losing, losing year after year. The Baltimore Orioles, Pittsburgh Pirates, Tampa Rays, Kansas City Royals, and The Montreal Expos/Washington Nationals have combined to have a losing record in the past 54 of 55 years. The Pirates have had 15 straight losing seasons, and you can look at a few key points as to why that is happening. Failing to rebuild a depleted farm system is one of them.

Select Read More to see details on PNC Park, the Pirates "Green" initiatives, a historical look at the Forbes valuations and Opening Day Payrolls and much, much more.

Bonifay Tenure

In 1993, Cam Bonifay was named GM of the Pittsburgh Pirates. With just losing Barry Bonds to the Giants, a franchise lost its marquee player. When that happens, you rebuild. In Bonifay’s term as GM, his most notable draft pick, I guess you could say would be, Kris Benson, who did not turn out as expected. Bonifay did achieve success in 1997 winning General Manager of the year with a team that had a payroll of $9 million. His downfall though, was signing players who were past their prime to enormous contracts, thus putting the team in financial difficulties that they would feel for years to come. Most notably his signings include, Pat Meares, Kevin Young, Mike Benjamin, and Jason Kendall (6 years, $60 million). GM Dave Littlefield was next in line, and you could say, did not fair much better. 

Littlefield Tenure 

David Littlefield, received most of the backlash during his tenure with respect to his actions in the draft, and the trades that he orchestrated. Littlefield, 47, took the position in July of 2001 and his teams had a combined 442-581 record in his tenure. His teams never approached the .500 mark. With a reputation of being a difficult trading partner, he has dealt some stars in the past while receiving nearly zero in return. Some of the players traded are as follows, Jason Schmidt, Aramis Ramirez, Chris Young, and Gary Mathews Jr. One of the most widely discussed and argued decisions of his time was trading Chris Young for Matt Herges in December 2002. Herges was released the following spring training, while Young has developed into one of the best pitchers in baseball, with the San Diego Padres.  The Pirates had invested $1.5 million in Young at that time, only to deal him away. One of Littlefield’s final moves might have been one of the worst. Rajai Davis was traded for Matt Morris who at the time had a 7-7 record and an ERA hovering around 4.50. The move was widely critized because the Giants were not picking up any of the $9 million due to Morris in 2008 (Morris has recently retired).

Littlefield does get credit for putting the nucleus of the current Pirates together (see details on salaries through Cot's Contracts); Jason Bay, Freddy Sanchez, Adam LaRoche, Jose Bautista, and Xavier Nady. The drawback though is those players were acquired in trades due in large part of the teams inability to draft and groom players while Littlefield was at the helm.

Pirates and the Draft

The Pirates minor league system and drafting process does have some issues. The Pirates have been widely criticized for drafting pitchers that are viewed as more signable than talented. For example, in the 2002 draft, the Pirates had the number one pick and had the opportunity to draft the following; Nick Swisher, Jeff Francoeur, Scott Kazmir, Khalil Greene, Cole Hamels, Prince Fielder, and Matt Cain. Instead, they drafted Brian Bullington, who has yet to reach his potential and currently is 0-5 with an 8.04 ERA in Triple-A Indianapolis. A negative aspect of the Pirates scouting system has been the lack and focus on scouting players in Latin America. The Pirates currently have no Latin American prospects and the players currently on the team are marginal at best and were signed or scouted before Littlefield signed on (Ronny Paulino, Salomon Torres, Jose Bautista, Damaso Marte, Jose Castillo and Tony Armas).

Hunington Tenure 

Since Littlefield’s departure, Neal Huntington took over as General Manager on September 25, 2007. Upon his arrival, changes were imminent as he fired Jim Tracy and made it noted that the contracts of the coaching staff, director of player development, scouting director, and the director of baseball operations would not be renewed. With Sabermetrics playing a huge role in the game today, Huntington made it know that the Pirates were going in a different direction, “We are going to utilize several objective measures of player performance to evaluate and develop players. We'll rely on the more traditional objective evaluations: OPS (on base percentage plus slugging percentage) , WHIP (walks and hits per inning pitched), Runs Created, ERC (Component ERA), GB/FB (ground ball to fly ball ratio), K/9 (strikeouts per nine innings), K/BB (strikeouts to walks ratio), BB%, etc., but we'll also look to rely on some of the more recent variations: VORP (value over replacement player), Relative Performance, EqAve (equivalent average), EqOBP (equivalent on base percentage), EqSLG (equivalent slugging percentage), BIP% (balls put into play percentage), wOBA (weighted on base average), Range Factor, PMR (probabilistic model of range) and Zone Rating”.  As if to back up this emphasis, in mid-April 2008 the Pirates hired Dan Fox, who as a writer for The Hardball Times and Baseball Prospectus had earned a reputation for his careful analyses of team defense, baserunning, and pitching. Fox took on the role of Director of Baseball Systems Development.

PNC Park

Needless to say the Pirates have a lot of work to do but is seems they have taken steps on the right direction. A very positive note with the team is what is widely considered one of the best stadiums in the game, PNC Park.

PNC Park, with a seating capacity of 38,362, opened in 2001 at a cost of $237 million as part of an $809 million total funding project that included Heinz Field, and an expansion of the David L. Lawrence Convention Center. The Pirates funding obligation totaled $40 million of the $228 million total pricetag. The design molds HOK's "throw back" ballpark design, with modern amenities, which reminds one of classic era stadiums like Forbes Field, Fenway Park and Wrigley Field. The stadium is located in the prime part of town, along side of the Allegheny River and adjacent to Federal Street, which takes advantage of the cities skyline, riverfront, as well as pedestrian walkways and riverboat access. PNC Park derived its name from a lucrative naming rights deal with PNC Financial Services, which purchased its naming right in 1998. PNC Financial Services (NYSE: PNC) is a U.S.-based financial services corporation, with assets (as of December 31, 2006) of $101.8 billion. PNC operations include a regional banking franchise operating primarily in eight states and the District of Columbia, specialized financial businesses serving companies and government entities, and leading asset management and processing businesses. PNC also owns the Louisville-based Hilliard Lyons investment firm. PNC is America's 11th largest bank by deposits and is the third largest bank off-premise ATM provider in the country (http://en.wikipedia.org/wiki/PNC_Financial_Services).

Upon its opening, Jim Caple of ESPN.com rated PNC Park as the best in the Majors with a score of 95 out of 100 (http://en.wikipedia.org/wiki/PNC_Park). Also in 2008 Mens Fitness article, PNC was named as “one of the 10 big league parks worth seeing this summer”. The team is also one of the most affordable for a family of four, costing $139.77. Compare that to the Red Sox and the Yankees, ($313.83/$225.53) is a decent deal.  Having one the finest stadiums in baseball still has not produced a rise in attendance and that is due to the lack of competitive baseball in Pittsburgh. Since its inception in 2001, the Pirates have had just over 12,800,000 people go to game, that averages out to 1,834,000 fans a year. The team drew 2.5 millions fans in 2001, and has not come close since.

Green Initiatives

Despite having one of the finest stadiums on record, the Pirates organization has been trying to branch out into different areas, to garner a bigger fan base, and promote the team itself. With MLB teams trying to be environmentally conscious (Seattle Mariners go Carbon Neutral on Earth Day , and the Boston Red Sox wearing the Earth Day, Green Initiatives Patch ), the Pittsburgh Pirates launched their own green initiative; “Lets go Bucs, Lets go Green”. “This program will integrate the following; greening initiatives, sustainable business practices and educational outreach. The program's launch marks the beginning of a dedicated effort by the Pirates and PNC Park partners CB Richard Ellis, ARAMARK and Levy Restaurants to be more environmentally conscious in their collective efforts to go green moving forward.”. The elements of this plan will include a recycling campaign that will capture the 760,000, plastic bottle and aluminum cans that are distributed through out the 2008 baseball season. Find below some of the initiatives as set out on the Pittsburgh Pirates website.

PROGRAM INITIATIVES
The following are some of the program elements:

  • Recycling - Beginning during the 2008 season, the Pirates will implement a robust recycling program at PNC Park. The club will place contour bottle receptacles throughout the ballpark with the "Let's Go Bucs. Let's Go Green" logo to draw the attention of fans to the initiative. At the end of each game, the Pirates will have game day staff stationed at the exits of each section to collect any plastic bottles fans collect from their seating area. A "Green Team" made up of members from the PNC Park cleaning staff will then walk through every area of the ballpark picking up all plastic bottles prior to the ballpark's cleaning each night. All bottles will be collected and recycled. The club will also continue to recycle all cardboard, as it has since PNC Park opened.
  • Concessionaire Initiatives - Both of PNC Park's concessionaires, ARAMARK and Levy Restaurants, will be using corn-based beverage cups. The companies will also eliminate most of the non-biodegradable materials in the utensils, plates, napkins and food carriers that were used to serve fans in years past.
  • Energy - The Pirates are taking steps to make the ballpark more energy efficient by installing motion detectors in specific locations, using the lowest voltage lights possible in all Exit signs and switching to more energy efficient bulbs that are now available. The club will also be conducting a complete energy audit to discover additional opportunities for energy conservation.
  • Paper Usage - All paper used in the ballpark and in the Pirates front office will be more environmentally friendly. The toilet paper will now be made from 100% recycled materials and restroom hand towels will be made from 45% recycled materials. All of the team's office paper, including copy paper, team stationary and business cards will be made from 30-percent post-consumer paper. The club will also eliminate the use of Styrofoam cups in the front office as well as separate office trash into dry and wet receptacles in order to recycle all dry waste paper products.
  • Printing - The Pirates have begun printing the club's various publications in soy-based ink on FSC certified paper, including the club's game day publication Pirates Insider, annual Community Report and PNC Park's A to Z Guide.
  • Fuel Flex Vehicles - All Pirates U.S.-based scouts now drive Chevy flex fuel vehicles that will conserve fuel usage and save on costs.
  • Cleaning Products - CB Richard Ellis will use Environmental Protection Agency recommended Designed for Environment (DFE) cleaning products to clean the ballpark.
  • Awareness Campaign - The Pirates are planning promotion of the program through a number of channels, including in-ballpark signage and public service announcements from Pirates players. The club will promote various program initiatives moving forward on the club's official website, Pirates.com, in various publications and during game broadcasts. The club is also educating and empowering its employees to take part in and promote the program.

Forbes Valuations

Below are details of the Pirates, according to Forbes annual reports, dating back to 2002 (see master list here )

Year
Rank
Val
1-yr. Val
Change (%)
Op. Inc.
2002
17
$242M
18
$9.5M
2003
21
$224M
-7
-$1.6M
2004
22
$217M
11
-$300K
2005
23
$218M
0
$12.2M
2006
24
$250M
15
$21.9M
2007
28
$274M
10
$25.3M
2008
28
$292M
7
$17.6M

Figures not adjusted for inflation 

Note that the Pirates hosted the All-Star Game in 2006, thus garnering the largest valuation increase that season.

Opening Day Payrolls

The following is a historical look at the Pirates Opening Day Payroll from 2003-2008

Year
Payroll
2003
$54,542,098
2004
$32,227,929
2005
$38,133,000
2006
$46,717,750
2007
$38,604,500
2008
$49,365,283

Conclusions

The 2008 Pittsburgh Pirates, on paper looks much like the ’07 team. The improvements this year greatly outweighs what has been going on over the past 5-15 years. With Neal Huntington on board who is widely known for his superb work as Special Assistant to General Manager of the Cleveland Indians in ’07 and with player development, specifically in Latin America, has brought a new approach to a team that has lacked focus for many years. The Pirates of old are used to paying enormous prices for players that did not seem worth the value. For a team with a payroll of $49,365,283 refocus is essential. The Pirates of the present now have skilled executives that can provide player recommendations with respect to player evaluation, acquisition and retention with a history of success by strategic planning and decision-making.

Maury Brown contributed to this article


Devon Teeple is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey.. He can be contacted through the Author Profiles page
 
 
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