Better Way to Build a Champion: Farm System or Blockbuster Transactions?

Building a World Series champion is not an exact science. There's no formula that general managers have to satisfy as a prerequisite to winning a title. All they can do is do the best they can with what they have.

The trouble, as we all know, is that not all general managers have the same resources. Some have very few resources and are forced to build winners from scratch on the cheap. Others have tons of resources and can patch holes with whatever they want.

Non-baseball fans see this as one of Major League Baseball's biggest problems. A lot of baseball fans don't really like it either, but most have come to accept the fact that it just is what it is.

The bright side is that there is more parity in MLB than the league gets credit for. In the last 10 years, only two teams have won the World Series twice, and neither of them plays in New York. We've seen teams with big payrolls win the World Series, and we've seen teams with very small payrolls win the World Series.

The question we have to ask is which method of building a championship team is more likely to be successful: Building a winner from the ground up by drafting and developing, or building a winner by making blockbuster trades and signings?

It's harder to answer this question than you think. The only way to know for sure is to take a look at recent history and see if there are any noticeable trends.

Be warned: This is going to be a long discussion. The plan is to take in-depth looks at the last 10 World Series winners, weighing things like how they acquired their best players, how much they paid them, what kind of deals they made and so on.

At the end, we'll add it all up and take stock of what we learned.

Away we go.

Note: Virtually all of the vital information comes from Baseball-Reference.com, but payroll figures come courtesy of USA Today.

2002 Anaheim Angels (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Darin Erstad	28	6.1	$6.25M	Draft
David Eckstein	27	5.0	$280K	Waivers from BOS
Garret Anderson	30	4.7	$5M	Draft
Adam Kennedy	26	4.4	$375K	Acquired in Jim Edmonds trade in 2000
Troy Glaus	25	4.0	$4M	Draft
Top 5 Pitchers
Jarrod Washburn	27	4.3	$350K	Draft
Ramon Ortiz	29	2.8	$575K	Amateur free agent
Troy Percival	32	2.3	$5.25M	Draft
Kevin Appier	34	1.6	$9.5M	Acquired in Mo Vaughn trade in 2001
Brendan Donnelly	30	1.6	N/A	Free Agent

Total Payroll: $61,721,667

Deadline Trade: Acquired Alex Ochoa and Sal Fasano from Milwaukee Brewers

World Series MVP: Troy Glaus

A lot has changed in the last 10 years. The Angels of today have a payroll of over $150 million and a handful of players making over $10 million per year. The Angels of 10 years ago weren't paying a single soul more than $10 million.

Back then, they were a classic draft-and-develop team under general manager Bill Stoneman, who was responsible for finding some valuable players for little money. It was also Stoneman who hired Mike Scioscia, a decision that resulted in a new team philosophy that was new and refreshing in the American League at the time.

They didn't have a whole lot of star power on their roster, but the Angels were deep both offensively and pitching-wise. It's not an accident that they led all of baseball with a +207 run differential in 2002, and it's worth noting that some of their best players aren't featured in the above table.

Tim Salmon was still around at that point, and the Angels also got solid production out of Scott Spiezio and Brad Fullmer.

There was plenty of talent in the middle of the diamond, as John Lackey, Scott Shields and Francisco Rodriguez were young, up-and-coming pitchers who gave the Angels quality innings in both the regular season and the postseason.

The key players who came from outside the organization, such as Kevin Appier and Adam Kennedy, can hardly be characterized as "blockbuster" acquisitions. Stoneman didn't shell out millions of dollars to free agents, and he didn't dish off the franchise's best young players to acquire established stars.

The 2002 Angels were mostly a young team, and the kids ended up being more than alright.

Verdict: Victory by strong farm system and smart spending.

2003 Florida Marlins (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Luis Castillo	27	4.2	$4.85M	Amateur free agent, re-signed in 2003
Ivan Rodriguez	31	4.2	$10M	Free agent
Juan Pierre	25	3.4	$1M	Acquired in Mike Hampton trade in 2002
Derrek Lee	27	2.6	$4.25M	Acquired in Kevin Brown trade in 1997
Mike Lowell	29	2.5	$3.7M	Acquired from NYY in 1999
Top 5 Pitchers
Dontrelle Willis	21	3.7	$234,426	Acquired in Matt Clement trade in 2002
Josh Beckett	23	3.6	$1.725M	Draft
Mark Redman	29	3.6	$2.125M	Acquired from DET in 2003 trade
Brad Penny	25	2.6	$1.875M	Acquired from ARI in 1999
Carl Pavano	27	2.1	$1.5M	Acquired from MON in 2002

Total Payroll: $48,750,000

Deadline Trade: Acquired Ugueth Urbina from Texas Rangers (Adrian Gonzalez was part of trade). 

World Series MVP: Josh Beckett

We tend to think of the 2003 Marlins as a team that was built from scratch, but that's not really true. Josh Beckett was the only draftee on the team that really stood out, and the team's roster featured just a small handful of amateur free agents (albeit very good ones).

The rest of the players the Marlins featured back in '03 arrived either via free agency or via trades, most of which failed to make a ripple on the baseball landscape.

The Marlins obviously weren't big spenders. In fact, the only player who made more than $5 million in 2003 was Pudge Rodriguez, who of course made $10 million.

The Marlins were all about pitching. They allowed the fewest runs of any team in the NL East back in 2003, and they succeeded on offense largely due to timely hits. They hit .270 with runners in scoring position. They had good depth up and down their lineup, and everyone contributed.

There's also really no overstating how huge some of Larry Beinfest's midseason transactions were. Ugueth Urbina was money for the Marlins after he came over from the Rangers, and Jeff Conine ended up being a huge presence in the postseason after he was acquired in late August.

In addition, Miguel Cabrera made his debut for the Marlins in June, and went on to hit four home runs in the playoffs.

Just like the '02 Angels, the '03 Marlins didn't have a lot of star power. They made up for that with their depth, which was made up almost entirely of cheap value players.

Verdict: Victory by smart spending.

2004 Boston Red Sox (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Johnny Damon	30	4.1	$8M	Free agent
David Ortiz	28	4.0	$4,587,500	Free agent
Manny Ramirez	32	3.8	$22.5M	Free agent
Jason Varitek	32	3.7	$6.9M	Acquired from SEA in 1997, re-signed in 2004
Mark Bellhorn	29	3.4	$490K	Acquired from COL in 2003
Top 5 Pitchers
Curt Schilling	37	7.5	$12M	Acquired from ARI in 2003
Pedro Martinez	32	5.2	$17.5M	Acquired from MON in 1997
Keith Foulke	31	3.4	$3.5M	Free agent
Bronson Arroyo	27	2.4	$332,500	Waivers from PIT
Mike Timlin	38	1.2	$2.5M	Free agent

Total Payroll: $127,298,500

Deadline Trades: Acquired Dave Roberts from LAD, Doug Mientkiewicz from MIN, Orlando Cabrera from MON.

World Series MVP: Manny Ramirez

The 2004 Red Sox were an expensive team, but let's give them credit for this much: They spent their money wisely. Three of their four highest-paid players are in the above table, and the only one who isn't is Nomar Garciaparra.

Nomar of course, was traded in July.

It wasn't until after July that the Red Sox became a truly excellent team. Mientkiewicz and Cabrera shored up a defense that desperately needed help, and Roberts gave the Red Sox some much-needed depth in the outfield. He also gave them some speed that ended up coming in handy in October.

The midseason acquisitions helped, but the Curse of the Bambino was broken mainly by all the various offseason acquisitions who had come to Boston over the years. Curt Schilling, Pedro Martinez and Keith Foulke were pitching heroes, and Manny Ramirez, David Ortiz and Johnny Damon carried the offense.

The Red Sox did indeed get help from former farm system standouts like Jason Varitek, Derek Lowe and Trot Nixon, but the simple fact of the matter is that the Red Sox would not have won the World Series back in '04 if Theo Epstein (and Dan Duquette before him) hadn't made good use of the team's resources.

Put simply, the Red Sox were anything but a championship team built from the ground up.

Verdict: Victory by big spending and big trades.

2005 Chicago White Sox (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Paul Konerko	29	3.7	$8.75M	Acquired from CIN in 1998, re-signed in 2005
Aaron Rowand	27	3.4	$2M	Draft
Tadahito Iguchi	30	2.5	$2.3M	Free agent
Jermaine Dye	31	2.2	$4M	Free agent
A.J. Pierzynski	28	2.0	$2.25M	Free agent
Top 5 Pitchers
Mark Buehrle	26	4.5	$6M	Draft
Jon Garland	25	4.3	$3.4M	Acquired from CHC in 1998
Jose Contreras	33	3.3	$8.5M	Acquired from NYY in 2004
Freddy Garcia	28	3.3	$8M	Acquired from SEA in 2004
Cliff Politte	31	2.6	$1M	Free agent

Total Payroll: $75,178,000

Deadline Trade: Acquired Geoff Blum from San Diego.

World Series MVP: Jermaine Dye

The 2005 White Sox are one of the more underrated and underappreciated teams in recent memory. They were dangerous because they could pitch (3.61 team ERA), and they were dangerous because they could hit the ball out of the ballpark (200 home runs).

They were basically an Earl Weaver club. And indeed, Ozzie Guillen has a little Earl Weaver in him. He's a misfit, and he managed a team that featured a few misfits (Pierzynski, Carl Everett, et al) back in 2005.

Like the 2002 Angels, the 2005 White Sox didn't feature a single player making $10 million or more per season. They did, however, feature 15 players who were making between $2 and $9 million per year. Kenny Williams spread his funds around well.

In the end, Chicago's pitching ended up leading the team to one of the most dominant postseason runs in the last couple decades. White Sox pitchers posted an ERA of 2.55 in the playoffs, pitching four complete games in the process.

Later in the season, the White Sox got to watch Bobby Jenks, a 2004 waiver claim, develop into a star pitching out of the bullpen. He ended up being a godsend after regular closer Dustin Hermanson injured his back in September.

As a whole, Chicago's pitching staff was a patchwork job constructed primarily through trades and free agency, and every man on it provided tremendous value for the money he was earning. That reflects well on Williams.

Chicago's payroll is now up around $100 million, but the White Sox aren't getting nearly as much bang for their buck as they did back in 2005.

Verdict: Victory by smart moves and smart spending.

2006 St. Louis Cardinals (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Albert Pujols	26	8.2	$14M	Draft
Scott Rolen	31	5.6	$12,456,336	Acquired from PHI in 2002
Chris Duncan	25	1.7	N/A	Draft
David Eckstein	31	1.5	$3,333,333	Free agent
Scott Spiezio	33	1.5	N/A	Free agent
Top 5 Pitchers
Chris Carpenter	31	4.9	$5M	Free agent
Adam Wainwright	24	1.3	$327K	Acquired in J.D. Drew trade with ATL in 2003
Jeff Suppan	31	1.0	$4M	Free agent
Braden Looper	31	0.7	$3.5M	Free agent
Jason Isringhausen	33	0.6	$8.75M	Free agent

Total Payroll: $88,891,371

Deadline Trades: Acquired Ronnie Belliard from Cleveland, Jorge Sosa from Atlanta. Jeff Weaver was acquired in early July.

World Series MVP: David Eckstein

Based on talent alone, the 2006 Cardinals had no business winning the World Series. They only won 83 games during the regular season, and they were undermanned both offensively and on the mound.

Still, it worked out that their two highest-paid players were also their two best players, and Tony La Russa knew exactly what to do with the pitchers he had at his disposal. St. Louis' starting rotation was nothing special, but La Russa was careful not to ask too much of his starters. He knew when to go to the bullpen.

It helped that he stumbled on gold when he decided to use Adam Wainright as the team's closer after Jason Isringhausen's season ended early due to hip surgery. Wainwright dazzled out of the pen in October.

The Cardinals didn't knock the cover off the ball in the postseason, as they got relatively little help from Albert Pujols and Scott Rolen. They were able to win the World Series because their pitching staff stepped up and posted a 2.68 ERA in the postseason. They generated just enough offense to win it all.

Aside from that, there's no concrete explanation for why the Cardinals were able to make it to the World Series, much less win it. The '06 team is a classic case of a team that was better than the sum of its parts.

The credit for that goes to then-GM Walt Jocketty for putting those parts together, and to La Russa for figuring out how to use them.

Verdict: Victory by smart spending and clever management.

2007 Boston Red Sox (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
David Ortiz	31	6.1	$13.25M	Free agent
Mike Lowell	33	4.6	$9M	Acquired from FLA in Josh Beckett trade in 2005
Kevin Youkilis	28	4.3	$424,500	Draft
Dustin Pedroia	23	3.6	$380K	Draft
Coco Crisp	27	3.0	$3,833,333	Acquired from CLE in 2006
Top 5 Pitchers
Josh Beckett	27	6.2	$6,666,667	Acquired from FLA in 2005
Daisuke Matsuzaka	26	3.8	$6,333,333	Purchased from Japan
Curt Schilling	40	3.8	$13M	Re-signed in 2007
Jonathan Papelbon	26	3.0	$425,500	Draft
Hideki Okajima	31	2.9	$1,225,000	Free agent

Total Payroll: $143,026,214

Deadline Trade: Acquired Eric Gagne from Texas Rangers.

World Series MVP: Mike Lowell

The 2007 Red Sox represent Epstein's best work during his tenure in Boston. They were a perfect mix of young players and veterans.

Numerous Red Sox draftees made an impact in 2007, chief among them being AL Rookie of the Year Dustin Pedroia, Kevin Youkilis, Jonathan Papelbon, Manny Delcarmen, Jacoby Ellsbury and Jon Lester. 

Next to a group like that, it's hard to remember that Clay Buchholz, Brandon Moss and David Murphy also logged some time in the big leagues back in '07.

All told, you can easily get the sense of how loaded Boston's farm system was back then.

And of course, they still had the big guns. Ortiz had a fine year, Ramirez came through in the postseason after struggling for much of the regular season and Schilling was effective when he was healthy.

Julio Lugo and J.D. Drew were both free-agent busts, but the grand slam Drew hit in the ALCS against the Cleveland Indians made his salary worth the trouble. Though he didn't live up to the huge posting fee, Dice-K also earned his salary in 2007.

For that matter, so did Josh Beckett and Mike Lowell, who proved to be well worth the trade that saw the Red Sox ship Hanley Ramirez and Anibal Sanchez to the Marlins.

The 2007 Red Sox were an expensive team, to be sure, and they didn't get as much bang for their buck as they did in 2004. The fact that they won goes to show how big of a difference smart drafting can make.

Verdict: Victory by smart drafting.

2008 Philadelphia Phillies (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Chase Utley	29	8.8	$7,785,714	Draft
Jimmy Rollins	29	5.3	$8M	Draft
Shane Victorino	27	4.2	$480K	Rule 5 Draft
Jayson Werth	29	3.6	$1.7M	Free agent
Pat Burrell	31	2.1	$14.25M	Draft
Top 5 Pitchers
Cole Hamels	24	4.0	$500K	Draft
Jamie Moyer	45	2.5	$6M	Free agent
Brad Lidge	31	2.3	$6.35M	Acquired from HOU in 2007
J.C. Romero	32	1.5	$3.25M	Free agent
Ryan Madson	27	1.3	$1.4M	Draft

Total Payroll: $98,269,880

Deadline Trade: Acquired Joe Blanton from Oakland.

World Series MVP: Cole Hamels

The 2008 Phillies are a beacon of hope for teams trying to build a World Series winner by drafting and developing. Both their lineup and their pitching staff featured standout products that came directly from their own farm system.

You can see how much Utley, Rollins, Victorino and Burrell meant to the '08 Phillies, but don't forget that Ryan Howard was there too. He only posted a 1.5 WAR, but he hit 48 home runs and drove in 146 runs for the Phillies in the regular season. Howard also came from Philly's farm system.

Cole Hamels was the best the Phillies' farm system had to offer on the pitching side of things, but Ryan Madson and Brett Myers made an impact as well.

In addition, then-GM Pat Gillick's decision to trade prospects for Brad Lidge and Joe Blanton ended up working out. Lidge was unhittable in 2008, and Blanton didn't lose a game in his 13 starts for the Phillies.

The Phillies no longer have an elite farm system, but they certainly did a few years ago. It served them very well in 2008.

Verdict: Victory by smart drafting and smart trading.

2009 New York Yankees (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Derek Jeter	35	6.4	$21.6M	Draft
Mark Teixeira	29	5.1	$20,625,000	Free agent
Robinson Cano	26	4.1	$6M	Amateur free agent
Johnny Damon	35	3.9	$13M	Free agent
Alex Rodriguez	33	3.9	$33M	Acquired from TEX in 2004, re-signed in 2007
Top 5 Pitchers
CC Sabathia	28	5.9	$15,285,714	Free agent
A.J. Burnett	32	4.2	$16.5M	Free agent
Mariano Rivera	39	3.5	$15M	Amateur free agent
Andy Pettitte	37	3.1	$5.5M	Amateur draft, signed as free agent
Phil Hughes	23	2.5	N/A	Draft

Total Payroll: $201,449,189

Deadline Trade: Acquired Jerry Hairston from Cincinnati Reds. Acquired Eric Hinske in June. 

World Series MVP: Hideki Matsui

The Yankees were busy bees before the 2009 season, signing up CC Sabathia, Mark Teixeira and A.J. Burnett to rich contracts. Brian Cashman also pulled off a trade for Nick Swisher.

All this wheeling and dealing resulted in a Yankees roster designed for one purpose: to win the World Series.

They did just that, and they were able to do it largely because the guys making the big bucks ended up pulling their weight. Sabathia, Teixeira and Burnett all had productive seasons, and so did the rest of the team's big-money players.

Yes, even Alex Rodriguez. He didn't come close to earning his $33 million in the regular season, but he was the team's best player in the postseason. They would not have won the World Series without him.

The Yankees proved in 2009 what they had been trying to prove for years: That it is indeed possible to buy a World Series victory.

Verdict: Victory by big spending.

2010 San Francisco Giants (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Aubrey Huff	33	5.5	$3M	Free agent
Andres Torres	32	5.1	$426K	Free agent
Buster Posey	23	3.7	N/A	Draft
Pat Burrell	33	2.0	N/A	Free agent
Freddy Sanchez	32	1.7	$6M	Acquired from PIT in 2009
Top 5 Pitchers
Matt Cain	25	3.8	$4,583,333	Draft
Tim Lincecum	26	3.0	$9M	Draft
Jonathan Sanchez	27	3.0	$2.1M	Draft
Brian Wilson	28	2.7	$6.5M	Draft
Madison Bumgarner	20	2.3	N/A	Draft

Total Payroll: $98,641,333

Deadline Trade: Acquired Javier Lopez from Pittsburgh, Ramon Ramirez from Boston.

World Series MVP: Edgar Renteria

The pitching portion of the above table tells you everything you need to know about the 2010 Giants. They drafted and developed all of their best pitchers, and each of them performed well both in the regular season and the postseason. 

It's worth noting that the one pitcher who didn't make an impact in the 2010 postseason was none other than Barry Zito, who was left off of the playoff roster. He was the Giants' most expensive player that year, as he earned over $18 million.

Aaron Rowand was San Francisco's second-most expensive player, and he made a minimal impact in 2010. In fact, the Giants' best offensive players in 2010 all earned under $5 million.

That's what's so odd about the 2010 Giants. They tried to play the big-spending game, but they ended up winning it all because it turned out they were a lot better at drafting and developing than they were at buying free agents.

General manager Brian Sabean can consider that to be half a compliment.

Verdict: Victory by smart drafting.

2011 St. Louis Cardinals (B-R page)

Top 5 Hitters	Age	WAR	Salary	Acquired
Albert Pujols	31	5.1	$14,508,395	Draft
Matt Holliday	31	3.7	$16,317,774	Acquired from OAK in 2009, re-signed in 2010
Lance Berkman	35	3.3	$8M	Free agent
Jon Jay	26	2.6	$416K	Draft
Yadier Molina	28	2.6	$5,312,500	Draft
Top 5 Pitchers
Chris Carpenter	36	3.5	$14,259,403	Free agent
Fernando Salas	26	2.4	N/A	Purchased from Mexico
Kyle Lohse	32	2.2	$12,187,500	Free agent
Jason Motte	29	1.3	$435K	Draft
Eduardo Sanchez	22	1.1	N/A	Amateur free agent

Total Payroll: $105,433,572

Deadline Trade: Acquired Octavio Dotel, Edwin Jackson, Corey Patterson and Marc Rzepczynski from Toronto, Rafael Furcal from the Los Angeles Dodgers.

World Series MVP: David Freese

The Cardinals surprised a lot of people when they won the World Series in 2011, but their victory wasn't quite as shocking as the 2006 victory.

Just like in 2006 with Pujols and Rolen, the Cardinals' two best players in 2011 were also their two most expensive players. This time it was Pujols and Matt Holliday, who both proved to be money well spent.

The Cardinals' offense as a whole ended up being well worth the money. St. Louis led the National League in runs scored, and that was largely thanks to the fact that the Cardinals got contributions from all over. Lance Berkman ended up being a bargain signing, Yadier Molina came into his own as a hitter, and Allen Craig and David Freese both hit the ball very well in limited action.

The Cardinals' offense took a lot of pressure off a pitching staff that was undermanned thanks to the loss of Adam Wainwright in spring training. GM John Mozeliak ended up doing the team a big favor with the trade that netted Jackson, Dotel and Rzepczynski.

St. Louis' pitching held steady in the playoffs, but the Cardinals won the World Series thanks to their bats, scoring exactly 100 runs in 18 games. Freese was obviously the big hero, as it's by no means an exaggeration to say that the Cardinals would not have won the World Series without him.

That's a point for the St. Louis' farm system, and the smaller acquisitions Mozeliak made ended up working out very well in the grand scheme of things.

Verdict: Victory by smart drafting and smart trading.

The Grand Conclusion

If you add up the payrolls of all 10 of these teams and average them out, the math tells you that the average World Series champion team over the last decade has been worth just under $105 million.

If you take the Yankees and their $200 million payroll in 2009 out of the equation, the average World Series winner over the past decade becomes worth just under $95 million.

Presently, there are 12 teams with payrolls higher than that in Major League Baseball, according to USA Today. That means they're pretty much doomed to fail, right?

That's pushing it a little, but if there's one thing this little exercise has taught us, it's this: It's not about how much money you spend. It's about how you spend it.

For many of the teams on this list (i.e. the Angels, Marlins, White Sox, Phillies, Giants), spending money wisely was not only about finding value by signing cheap players with decent talent, but creating value by developing young players and giving them a chance to grow at the major league level.

In other words, it's a lot more cost-efficient to develop star players than it is to buy them. 

I can think of no better way to illustrate the point than to compare what the Phillies got out of Cole Hamels in 2008 to what the Yankees got from CC Sabathia in 2009. For $500,000, the Phillies got a pitcher with a 4.0 WAR. For over $15 million, the Yankees got a pitcher with a 5.9 WAR.

The Phillies got way, way, way more bang for their buck than the Yankees did.

But this isn't meant to be a knock on the Yankees. They built World Series winners in the late 1990s by dat gives teams like the Detroit Tigers and Los Angeles Angels hope, but it must be kept in mind that the 2009 Yankees are not the norm when it comes to teams who spend big as part of an effort to get over the top.

It didn't work for the Chicago Cubs or the New York Mets, and it's not working for the Red Sox now. Even the Seattle Mariners gave it a shot when they signed Richie Sexson and Adrian Beltre back in 2004, and that didn't work out.

What recent history tells us is that it's far more prudent for teams to use their farm systems to develop star players. Once they are established, whatever's left in the farm system can be used to acquire missing pieces via trades. Trading prospects isn't easy, but it's a much cheaper way to acquire extra wins than spendinrafting and developing. And though they bought a championship in 2009, products of their own farm system (i.e. Jeter, Posada, Rivera, Cano) definitely helped the cause. Their big spending didn't make them a great team. It just put them over the top.Thg money on free agents.

A progression such as this is not an easy trick to pull off, as developing star players is much easier said than done. It's certainly not as easy as buying stars, anyway. Developing requires patience.

What we've learned over the last decade is something our parents told us all when we were kids: Patience is a virtue.

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