"Homegrown players" -- a viable strategy?

In 2007, the four teams in the league championship series had 187 of their wins (as measured by Win Shares) contributed by players "homegrown" by the respective team. That's up 68% from last year, and 43% more than the "recent average."

These numbers come from a recent Wall Street Journal article by Russell Adams, "Baseball Promotes From Within."

Adams doesn't make an explicit argument, but the implication is that teams are focusing on player development, rather than on signing free agents (who are getting very expensive), and that the strategy is working.

I'd argue that the strategy is not so much to concentrate on homegrown players, but perhaps to concentrate on *cheaper* players. After all, if you have a star in his "slave" years earning only $380,000, it doesn't matter whether he came from your farm system or someone else's. Either way, he's going to help you win equally.

The Indians, Diamondbacks and Rockies were all in the bottom eight payrolls for 2007. They won because their low-priced players performed well, not necessarily because their homegrown players performed well.

However, there is an argument that homegrown players are a better investment:

"Executives say promoting your own players makes sense not only because they are familiar, but because everyone in the organization knows how they've been trained. Instructors in the Phillies' farm system, for instance, follow a manual that describes the "Phillies' way" of doing everything from warming up a pitcher's arm to defending a bunt. Promoting from within is "a safer way to go," says the team's assistant general manager Mike Arbuckle."

Even if you don't accept that the "Phillies' way" is better than the "Brewers' way" or the "White Sox' way," it's still possible that bringing the player up yourself can benefit the team. You'd expect that the team that knows the player best would be the best judge of his major-league expectation. By watching the player carefully, perhaps the Phillies can avoid the mistake of bringing a player up too early. But if they got the guy in trade from the Astros, they might not know enough to make a proper judgment. (I don't know of any evidence either way.)

But still, there's nothing to stop other teams, even free-spending ones, from also developing homegrown players. Even high-spending teams have a budget. If the Red Sox, for instance, find a gem in their minor-league system, they can trade away the expensive free agent at his position, and use the money for someone else.

For teams with little money to spend on salaries, there is an obvious strategy, one that's also used in Rotisserie. You trade your expensive players for young minor-league talent. Eventually the acquired players are ready for the big leagues, and you get three years of free service out of them (and a couple of still reasonably-priced arbitration years). If that's what these teams are doing, then, again, it's not the "homegrown" factor at work – it's the "cheap" factor.