In March, I wrote that international spending needs to be a priority for the new owners, referencing the Dodgers disappearing presence on the international stage and also their lack of draft spending. Well, so far, so good.

From 2007 to 2011, the Dodgers draft budget ranked 26th in the league, which is incomprehensibly low for a team that was still in the upper tier as far as payroll was concerned. Couple that with their lack of investment in the international market, and it was a recipe made in player development hell. Considering the constraints in place, Logan White, Kim Ng, and De Jon Watson did remarkably well to pump out MLB talent and hold the system at respectable levels even after years of neglect, but change was absolutely needed. Luckily, it seems to have come.

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Whether you agree with their moves or not, it’s hard to argue that the new owners aren’t trying. The controversial inking of Yasiel Puig put the team back on the map, and they have already spent on other international prospects as well. As the Dodgers re-enter the market in earnest, it’ll be interesting to watch the coming years to see if they can score more name prospects than before, especially now that connections are more important than ever with the implementation of an international spending cap in the new CBA.

Then there’s the matter of the draft, where according to Baseball America, the Dodgers ranked fourth in draft spending relative to their bonus pool allotment in 2012. The team went almost $200,000 over the limit, resulting in a tax of about $150,000. Also, the team signed a record percentage of draft picks while under Ned Colletti.

So despite the ownership’s efforts coming off as more of a public relations ploy at times, the player development focus thus far can only be considered a success.

R.J. Anderson looked at Ned Colletti‘s trade history over at Baseball Prospectus and wondered why Dodgers fans are so worried about him.

Colletti’s evaluation mistakes cost the Dodgers two middle-of-the-rotation starters, an All-Star catcher, and a good fourth outfielder at most. But what about the flip side? What about when Colletti correctly evaluated his own prospects? Silver wrote, “One of [Colletti's] strengths seems to be knowing when to bail on his own players.” In the time since, Colletti has reaffirmed that notion. Some of Colletti’s better trades have come when correctly identifying the lemons in his own bunch. He traded Bryan Morris and LaRoche to acquire Manny Ramirez (easily the best deal of his career), used the intrigue of Joel Guzman to land Julio Lugo (whom, for whatever reason, fell to pieces, mitigating an otherwise clever deal), grabbed Jon Garland for Tony Abreu, got Jim Thome for nothing, and added Ted Lilly and Ryan Theriot for Blake DeWitt and two prospects who were unable to make the Cubs’ top-20 list this preseason.

Tagging Colletti as a good or bad general manager adds no value. What can add value is breaking general managers down to tools and skills. Colletti seems to understand that future value is worth less than present value, particularly when his team has the ability to compete now and the resources to compete later. Proper evaluation is the engine in Colletti’s machine. That means the Dodgers have to continue to land potentially useful players and continue to evaluate and harvest the potentially overvalued prospects. Every once and a while, Colletti is going to miss on a player. It happens; even John Schuerholz, the master of farm system self-evaluation, lost a few times.

This isn’t to say that Dodgers fans should have blind faith in Colletti, just that cowering in fear seems to be equally as unreasonable.

Andrew Grant addressed the notion that Ned Colletti’s not that bad of a General Manager over at Mike Scioscia’s Tragic Illness.

Ned Colletti isn’t without his merits. He’s good at assembling a bullpen on the cheap and the Dodgers get more mileage out of their veteran utility guys than most teams, but these are minor things in the big picture. Colletti inherited a dream situation, the best farm system in baseball with a payroll in the upper echelons of the league and the more it has become his team, the worse it has gotten. If you compare Ned’s moves to Bobo the General Managing Chimp he looks great, but if you assume a base level of competence from your GM Ned falls massively. James Loney’s monthly home run doesn’t make him a good player, so all of Ned’s moves not failing miserably shouldn’t make him a good GM.

I was actually going to write something similar, including using the exact same links he used, but instead, I’ll just address the question of whether Dodgers fans are justified in worrying at the trading deadline.

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Despite my derision of him as a General Manager, Ned Colletti has, in my estimation, specific strengths and weaknesses. He is terrible at major free agent signings, but fringe/average on the minor free agent deals. He’s good at trading away major league talent (usually guys that he signed, unfortunately) for useful minor leaguers. And as Andrew showed, he’s basically average at trading away minor league players, but it’s rare that he gets value in return for all that he trades away.

Coincidentally or not, his strengths all seem to derive from scouting and evaluation of minor league players (trading for minor leaguers/drafting minor leaguers/trading away minor leaguers). Such opinions were earlier justified in quantifiable form by The Hardball Times. Now I’m not saying that all the minor league strengths are due to Kim Ng/Logan White/De Jon Watson, but that is their job description, and two of those three were with the team before any of us were aware Colletti existed.

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So with that established, I don’t understand how or why R.J. gives Colletti credit for getting present talent in return on trades as if that’s what happens all the time when Colletti deals away minor league players.

Looking at the trades he has made over the years, it’s a bit odd to use that angle. Manny Ramirez was a once-in-a-lifetime scenario in which the Red Sox had to dump a Hall Of Fame talent, even the most ardent fan of Ned Colletti would have to admit that, and that’s ignoring entirely the report that Frank McCourt was the one who made it happen because he wanted to sell tickets. Andre Ethier was Colletti’s shining moment, and despite what Nate Silver said, I loved the trade at the time. Again though, that’s clearly not a deadline deal where he acquires current talent in exchange for future talent. Quite the opposite actually, and it’s certainly not what Dodgers fans are worrying about here.

So why are they worried? Because essentially, he has lost an All-Star catcher (a good one, at worst), two middle-of-the-rotation guys, and an outfielder who would have definitely started for the Dodgers over the years in return for what? Greg Maddux and Casey Blake for two months? Neither of which vaulted the Dodgers to the next level in the present or future.

As such, I would say Dodgers fans are justified to be worried about Colletti at the deadline. That is, unless David Wright decides to push over a Mets employee, bad mouth the Mets in the press, and quit on the team or Bobby Abreu blows his top and becomes a clubhouse cancer, forcing a deal for a minor league prospect. Because while the odds are good that he’ll both get nothing that helps the team and give away nothing that matters, more often than not, when the players involved have mattered, he’s come out on the losing end.

“Less” — the comparative effectiveness of the franchise’s free agent spending under his reign.

“Most” — the production contributed by cost controlled players while he’s been in charge.

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Ned Colletti has been the GM for one of the most successful runs in Los Angeles Dodgers history, compiling at 511-460 record since the 2006 season, good for third in the National League, behind only the Philadelphia Phillies and St. Louis Cardinals. The success has led many fans and writers to excuse away any deficiencies he may have, because the results have been solid.

Despite the results though, his work is not well regarded by bloggers. The general belief is that the main cog behind the franchise’s success was actually the perfect storm of cost controlled talent rising from the minor league system around the same time. Most of that talent was brought in and nurtured by Logan White and Kim Ng, who were hired by a previous GM, Dan Evans. Meanwhile, Colletti is thought to have squandered the tremendous window of opportunity provided to him on free agent signings like Juan Pierre, Jason Schmidt, and Andruw Jones. Perhaps most importantly, the further away Colletti gets from the influence of the previous regimes, the worse the roster seems to get.

I bring up these divergent narratives because The Hardball Times recently put out a great study on an objective way to measure front office performance, and the results appear to explain both lines of thinking.

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So what was studied and what do I mean by “Less” and “Most”?

There are really two different sources of per-dollar efficiency when we look at marginal payroll per marginal win:
(1) How well a team gets production from players not yet eligible for free agency
(2) How efficiently a team spends on free agents

So, for the following analysis, I will use two classifications of players that are particularly important.
(1) NM = Non-Market Players, who are either bound to their team by the reserve clause or eligible for arbitration
(2) AM = Auction-Market Players, who are eligible for free agency or are at least eligible for auction by being professional amateurs from countries like Japan and Cuba.

So what we’re really looking at to evaluate the performance of front offices is marginal payroll per marginal win, or how efficient a front office is at developing and signing talent.

“Most”, in the case of the Dodgers, is represented by the production of their cost controlled players, who are developed from within. The Dodgers rank an amazing 1st in the MLB in this category, explaining both the position of bloggers and the perception that the team has developed a wealth of homegrown talent.

On the other hand, the Dodgers’ payroll averaged $110 million over the last five seasons, but they might have been just as good if they had just retained their own draftees and amateur signings. The only cost would have been about $30 million in arbitration and league minimum salaries, and they would have been about as good as they were spending $110 million.

Of course, that’s not completely true, as there are roster flexibility issues to account for, but it goes to show just how much homegrown talent Colletti has been afforded under his reign.

The “Less”, in that case, becomes the way the Dodgers have spent on free agents, who are purchased from outside the organization. In that category, the Dodgers ranked 19th in the MLB, spending about $6.3 million per win. It’s an inefficient way to do business, but with enough payroll flexibility, he was able to throw around enough money to get production out of them. This helped set up the successful run of results for Colletti, explaining the position of many fans and writers.

Overall, the study basically showed that Colletti had been given the most productive farm system in baseball from 2007-2011 and still somehow managed to end up with a progressively worse roster as the years went by. The main culprit was spending around $6.5 million per win in free agency, or about $2.0 million more per win than league average.

It’s an indictment of your talent as a decision maker when there are tens of millions to spend with the purpose of improving on what you’ve already been given, yet you’re barely able to claw back and achieve the results of what you already had to begin with.

In the end, the Dodgers ranked 21st in marginal payroll per marginal win from 2007 to 2011.

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If new President Stan Kasten has faith that he can work with Ned Colletti and provide him with the tools to improve as a GM going forward, then I’m willing to put my faith in Kasten’s track record and start over with Colletti. However, given the fact that the Dodgers job has to be one of the most currently appealing GM positions in the majors, the far preferable solution would be to replace Colletti with one of the game’s many bright young minds in either scouting or analytics.

In recent months, the Dodgers front office has made a point of promoting the youth movement to fans. The current transactions (or lack thereof) are supposed to be proof that they are now committed to seeing the youth movement all the way through.

Of course, the problem with this strategy is that Frank McCourt is now using the abundance of youth as an excuse to cut payroll. McCourt is basically advocating that the Dodgers attempt to build the franchise like the Twins and Athletics do. That’s fine and all, but the only reason those franchises do what they do is because they have no money. The Dodgers, on the other hand, do have money, but McCourt would rather invest his profits into Red Sox memorabilia or something.

To me, the surprising thing is that the blogs seem to have granted the Dodgers a pass. Given Ned Colletti’s failures with both free agent signings and trades involving prospects, everybody seems to be satiated by this new conservative ideology of letting the youth develop instead of splurging on free agents.

Unfortunately, this logic just doesn’t hold up. Don’t get me wrong, I’m as big of a proponent of keeping young talent over old declining veterans as anybody. Thing is, that’s not the problem I have with the strategy. The problem I have is that the current abundance of young and cheap talent will be wasted if it’s not taken advantage of when the opportunity presents itself (now). You see, if the Dodgers keep relying on the youth without supplementing the team with good free agents, those young players will be hitting arbitration and free agency soon enough, thus rendering the whole point of the youth movement (to save money) useless.

So what should a big market team with a strong young core do? Easy. Pair the talented youth with some marquee free agents. The Red Sox are a good example of the ideal plan of attack for big market teams, pairing the ability to develop young talent and the ability to wisely spend money on key free agents. Hard to argue with the results, right? Well, unfortunately, the plan relies on having a competent GM, not somebody who wastes 41 million on three useless players.

Part of the reason I hate the job that Ned has done is that he’s been gifted one of the easiest situations for a GM to succeed in and he still can’t accomplish anything. Colletti has been given one of the deepest and most talented youth systems in recent memory, and he can barely sculpt a decent team because of his failures in free agency.

For example, take away all the free agents, and the Dodgers look like this:

C-Russell Martin-4.0 Million (Estimate)
1B-James Loney-0.4 Million
2B-Blake DeWitt-0.4 Million
3B-Free Agent
SS-Free Agent
LF-Free Agent
CF-Matt Kemp-0.4 Million
RF-Andre Ethier-3.0 Million (Estimate)

Total Payroll-15.4 Million Dollars

So even if we assume that McCourt is a cheap bastard (probably is), he has still allotted about 100 million to work with, and Ned would have around 84.6 million dollars to fill six roster spots. Other GMs would be ecstatic at the opportunity to spend a little over 16 million on every position they need to fill. It’s pathetic. The bottom line here is that Colletti has done a joke of a job, and McCourt doesn’t deserve any better than what Ned’s given him.

A further problem is that the influx of youth is not a permanent fixture. If you think about it, in the past three years, the minor league system has produced Matt Kemp, Andre Ethier, James Loney, Blake DeWitt, Chad Billingsley, Clayton Kershaw, Russell Martin, Jonathan Broxton, Hong Chih Kuo, Cory Wade, and James McDonald. It is completely unreasonable to think that the Dodgers can repeat a class like that every three years. As it is, this team has basically been completely constructed over the last few years by Logan White and Kim Ng, with little to no help from Colletti’s free agent deals.

Yet, ironically, when it comes to budgeting enough money to allow continued farm system success, McCourt chooses to handcuff White and Ng with further cheapness. In the past two years, the Dodgers have been outspent by 26 other teams in the draft, and they have stopped being productive in the arena of international signings. Where is the logic in this? Don’t ask me, because I have no idea.

In the short-term, McCourt and Colletti might get away with using the farm system as their crutch. However, refusing to compete in free agency, not pursuing players on the international scene, and cheaping out on draft signings is not a smart long-term solution for major league, minor league, and draft success. The Dodgers might be able to use their farm system to stay afloat over the next few years, but without laying the groundwork for the replenishment of the youth that graduate, it’s a long-term recipe for disaster. In the future, my greatest fear for this franchise is McCourt and Colletti trying to lean heavily on their crutch once again, only to find out it’s no longer there.