When Mike Elias first viewed the Orioles’ general manager opening in 2018, he saw a unique opportunity. He wouldn’t be just rebuilding the player pool in Baltimore, a group already gutted by a trade-deadline sell-off earlier that summer; he would need to overhaul the organization from the ground up.
“We viewed it as a total refresh,” Elias told The Baltimore Sun.
The farm system was bereft of major talent. The international scouting department was underfunded and underused, particularly in the Dominican Republic. The analytics department was understaffed, the player development sector antiquated, and several large contracts for players who didn’t pan out left the team little room to maneuver.
It all required changing. And changing takes time.
As Elias enters his fourth season as executive vice president and general manager, many of those changes remain unseen, invisible from the stands of Oriole Park at Camden Yards. What is visible frustrates fans: the 100-loss seasons and frequent trades of household names in favor of prospects.
But there’s an internal belief that under the surface is a change of fortune, a revitalization of a franchise that recently became the lone Major League Baseball club to lose value in 2021, according to Forbes magazine. It’s a process Elias envisioned since he arrived, and he feels it’s close to coming to fruition.
Baltimore isn’t built to win this year, and the club’s lightweight payroll — about $40 million for players currently in the organization — reflects that. But the Orioles hope that spending money on longer-term, sustainable efforts, such as scouting, analytics and the development of minor league players, can lead to a more competitive club in coming years.
“I really do feel like we can now boast [a solid foundation] as an organization,” Elias said. “While the last three years were rough at the major league level, I think the next three years will represent a much clearer reflection of what’s going on beneath the surface.”
‘At the low point of the flywheel’
For Clarence “Fancy Clancy” Haskett, a longtime beer vendor at Camden Yards, going to work in recent years has meant seeing fewer and fewer of his regulars.
“They’re tired of spending their money [when] there’s nothing happening on the field,” Haskett, 63, said.
Haskett, who’s been working Orioles games for 48 years, said that when attendance is low, it hurts the average vendor, who might earn half as much during a sparse night compared with a well-attended one.
Baltimore’s home attendance has decreased each year since 2014, when the team averaged 30,806 fans a game. Even before the coronavirus pandemic, that figure had nearly halved to 16,348 in 2019. Following the spectator-less year of 2020, the Orioles averaged just over 10,000 fans a game in 2021 — including a Camden Yards low of 4,965 one September night.
This year’s puny payroll, however, is not a result of poor attendance; instead, it’s more a product of priority. Rather than invest in on-field talent in 2022, the Orioles have opted to focus financially on other areas — scouting, analytics, minor league development — to the detriment of the present, but in an attempt to build a long-term contender.
“Hopefully when they start winning, they can get [the fans] back,” Haskett said.
While low attendance can hurt beer vendors and ding revenue, it doesn’t have a massive impact on the Orioles’ finances.
The bulk of the team’s revenue comes from consistent streams — including from league-wide revenue sharing and from national media deals. Each Major League Baseball team pools 48% of its annual revenue together, splitting the pot evenly among all 30 clubs, which buoys the small-market ones like Baltimore. Combined with shared national TV revenue, small-market clubs can receive the majority of their revenue from those two streams alone.
Additionally, the less the Orioles make in gate fees, the less the club owes in rent. The Orioles pay their landlord, the Maryland Stadium Authority, a percentage of in-game revenue, rather than a flat fee. During the most recent fiscal year, the authority received $1.6 million in rent from the Orioles, compared with $8 million during some popular years.
That isn’t likely to happen this season, though, as the Orioles — who have the worst combined record in baseball since 2015 — are expected to struggle again. Most sportsbooks consider Baltimore to be the worst team in the major leagues, projecting roughly 62.5 wins.
The club’s lease for Camden Yards, meanwhile, is set to expire at the end of 2023 and longtime owner Peter Angelos is in poor health, prompting some to question the team’s future in Baltimore. However, Angelos family members have consistently said the Orioles will remain in Baltimore.
To help retain the team and update the aging, yet beloved venue, the stadium authority is seeking the General Assembly’s approval to borrow up to $600 million for improvements, and with that more people might want to go to the ballpark.
The pandemic exacerbated financial challenges for any MLB team, particularly small-market ones, but the Orioles still managed revenue of $251 million in 2021, Forbes reported, comparable with its small-market peers. However, its player payroll remains among the smallest in the major leagues for yet another year after ranking near the bottom of the league in 2021 ($57 million, 27th) and the pandemic-shortened 2020 season (a prorated $23 million, 29th).
In fact, the team’s payroll isn’t far from the annual salaries of some of the sport’s biggest individual stars, such as Los Angeles Angels center fielder Mike Trout ($39 million) and New York Yankees pitcher Gerrit Cole ($36.5 million).
The club has spent near the league average in past years as it competed for playoff spots and division titles, ranking as high as ninth in total payroll entering the 2016 season.
Georgetown University professor Marty Conway, who has worked for MLB, for the Texas Rangers, and as the Orioles’ vice president of marketing in the early 1990s, described spending as a sort of “dial” that can be adjusted as needed. He said the Orioles are “at the low of point of that flywheel.”
“The expectation is that this strategy pays off at the other end, and then you could look at more investments in payroll to supplant and to actually try to play postseason baseball,” Conway said.
Conway said attendance is a “lagging indicator” of success, and should the Orioles compete for a playoff spot in the coming years, Camden Yards could see a return to large crowds. If more spectators bring in more revenue, Elias plans to “leverage those resources into the MLB roster.”
“As the team gets better,” Elias said, “we hope and project and expect for our local revenues to rise as the team becomes more popular and more successful and more entertaining.”
Building for the future
When Elias arrived in Baltimore, one of his first moves was to hire Sig Mejdal as assistant general manager for analytics. Mejdal had worked with Elias in Houston, and the duo helped turn the Astros from a bottom-feeder into a World Series contender.
They had the blueprint. It wasn’t through extravagant free-agent signings — at least not right away. It was up to the farm system, the analytics department and international scouting to build and sustain a championship contender.
The Astros achieved that, with Elias a driving force in the team drafting shortstop Carlos Correa, the future American League Rookie of the Year and two-time All-Star, with the top overall pick in 2012.
But that foundation didn’t exist in Baltimore.
“This was a franchise that had been running on a model of heavily leveraging the major league payroll, oftentimes at the expense of future-oriented investments and infrastructure that has become ubiquitous with the way every Major League Baseball team runs itself since about the mid-2010s,” Elias said. “It was, first and foremost, a buildup of the entire baseball operations department.”
That started in the analytics department, where there was one developer on staff when Elias began. Since then, Di Zou, that lone developer, has been promoted, and there are now a dozen or so software programmers on the analytics staff. That staff had to recreate tools Elias and Mejdal were accustomed to using in Houston and, even earlier, in St. Louis, to get Baltimore up to speed.
There was a push to upgrade the player development facilities, and the Orioles are in the process of building a 23-acre complex in the Dominican Republic. The team has emphasized minor league development, including revamped hitting and pitching programs, and hired a mental skills coordinator. As part of new league rules, the organization is now also responsible for providing housing for its minor leaguers.
“This is all stuff that goes on beneath the surface and isn’t reflected in your major league payroll,” Elias said, “but is a legitimate pull on your resources.”
The MLB draft has been a key rebuilding tool for the Orioles in recent years, and Baltimore again has the No. 1 overall pick in July. By virtue of finishing with the majors’ worst record last season at 52-110, the team also has one of the largest bonus pools to work with to sign amateur players.
Since losing 115 games in 2018 — a season that featured the trades of homegrown stars such as Manny Machado, Zack Britton, Kevin Gausman and Jonathan Schoop — the Orioles have picked first (catcher Adley Rutschman), second (outfielder Heston Kjerstad) and fifth (outfielder Colton Cowser) in the draft, stockpiling talent that has built what some consider the No. 1 farm system in baseball.
Several of those players — including baseball’s top overall prospect Rutschman and top pitching prospect Grayson Rodriguez — are expected to make their major league debuts this season.
Of course, there’s no guarantee a rebuild works. But as the core group of highly touted players nears Baltimore, the hope of winning brightens the darkness of recent mediocrity.
“We’re sitting on top of the best minor league system in baseball, and those players are getting closer and closer to Camden Yards,” Elias said. “We view this season as one of importance, aspiration, hope for the Orioles as we start to demonstrate the product of work we’ve been putting in all around the organization.”
When will the winning start?
Orioles fans have suffered the losing that comes with a rebuild, and many fans are growing weary of waiting. The want to know: When will the winning start?
Baltimore has not had a winning record since 2016 and has lost at least 108 games in each of the past three full seasons. Some fans are disgruntled as they watch the Orioles flounder while the Tampa Bay Rays, also in a small market, have soared to a 100-win season last year and a pennant in 2020.
If Elias’ time in Houston is any harbinger, a playoff contender could come in the next two or three years.
The Astros hired general manager Jeff Luhnow before the 2012 season, who brought Elias to Houston, too. Houston’s big league club limped for three seasons, racking up losses and draft picks, before making the playoffs in 2015 and winning the 2017 World Series; though that title has been tainted by a sign-stealing scandal.
It was similar to what the Chicago Cubs began in 2011 under Theo Epstein, when the team suffered through miserable 2012, 2013 and 2014 campaigns. But in 2015 came a surprisingly successful season and then, in 2016, a World Series title led by talented, homegrown players including 24-year old Kris Bryant, that season’s MVP who’d been drafted by the Cubs during the rebuild.
Those are models — with more winning and more attendance — that Baltimore fans and beer vendors alike can look forward to.
When Haskett, the longtime vendor, isn’t hawking brews at Camden Yards, he coaches track at Mount Saint Joseph High School. The team he coaches is young, he said, but talented, and with some development, they could be great in the near future.
“We’re gonna be real nice,” he said, “in a couple years.”
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