An Overzealous Review of The Extra 2%: Chapter 5
Albert Lyu and Carson Cistulli are overzealously reviewing colleague Jonah Keri’s forthcoming book, The Extra 2%. Feel free to read parts one, two, three, four, and five of what critics are definitely not calling “late for dinner.”
In what follows, our handsome gentlemen discuss the takeover by Stuart Sternberg and Friends of the Rays — and like 10 other things Carson doesn’t understand.
Cistulli: Chapter five — as you’ll know by now, Albert — concerns the takeover by Stuart Sternberg of the Rays in 2005 and two of his earliest hires: Team President Matt Silverman and Executive Vice President of Baseball Operations (a.k.a. Mega GM) Andrew Friedman. The unique thing about this triumvirate is that the bulk of their pre-Ray experience came not in baseball operations, but in the financial sector — and, specifically, investment banking.
I’m not lying, Albert, when I tell you that a number of my high school classmates are involved in this line of work; nor’m I misleading you even for a second when I suggest that my understanding of i-banking and its attendant culture is limited by a combo package of willful and totally unintentional ignorance.
Really, Albert, my knowledge of professions is limited by a single criterion — namely, if there’s a Lego character for it or not. Farmer? Teacher? Fireman? Io frigging capisco. Consultant? I-Banker? Charlie Sheen?* No so much.
*Note: Relevant pop-culture humor!
Albert: I thought Charlie Sheen wasn’t an actual job anymore. So you’re off the hook, Carson, if you have no idea what a Charlie Sheen does in a typical day of work. As far as Twitter pics can tell me, at the least.
Cistulli: As a service to those readers who might find themselves in boat similar to — or maybe even exactly the same as — mine, I’ve compiled list of glossary terms that appear in, and are necessary to fully understanding, chapter five.
Regard, an infallible lexicon:
Brokerage Firm — A fraternity for graduates of Ivy League colleges and sometimes Stanford.
Growth Capital — A popular nickname for Madison, Wisconsin, City of Meats and Cheeses.
Leveraged Buyout — A buyout that requires pulleys and levers.
Limited Partner — A partner who’s really busy, and so can’t make it to all the meetings.
Liquidation Event — Not, as I initially suspected, the result of drinking ginger ale.
Market Bottom — Sort of like an apple bottom, except different.
Market Maker — A song from the parody version of Fiddler on the Roof.
Opportunity Cost — Everything in the world, upon becoming a parent.
Private Equity — A technical term for the word secret.
Revenue Stream — A rare body of water most commonly found on the property of Russian oligarchs.
Am I missing anything?
Albert: You forgot “venture capitalist.”
Cistulli: That’s when someone makes money by designing and manufacturing a Lewis and Clark commemorative coin.
Albert: So I’m listening to Mark Cuban (hey, he wrote this book’s foreword!) and Kevin Pritchard right now on the MIT Sloan Sports Analytics Conference webcast thingamogger. And this is a great segue (that word should be spelled “segway”… or “Sega”) into what we could talk about today. Recent years have seen supposedly bright/brilliant/smart guys forfeiting Wall Street jobs for the sake of more glorified work in the MLB and NBA, including Stuart Sternberg, Andrew Friedman, and Matt Silverman, subjects of this book.
Ever since Theo Epstein rose as (one of) the first GMs to come out of the likes of Yale, millions I mean millions of young, smart non-baseball people have been wanting to get in at the industry. So instead of 80-90 hour work weeks with the end goal being lots of dolla signz (i.e. investment baking, err, banking), it’s 80-90 hour work weeks as interns just to get yo foot in da door of the baseballing industry.
There’s a huge barrier of entry here though. What you think?
Cistulli: Yes. Huge. Nor do I begrudge anyone who follows that path. I suppose more interesting, though, is how Epstein took care of his business.
The story — inaccurately and too quickly told — is that he was determined to work in baseball, interned with the Padres, studied law concurrent to working with San Diego (expressly for the purpose of improving his qualifications for baseball management), and then rose up through the organization, eventually moving with Larry Lucchino to the Red Sox.
So far as I know, before Epstein that career path didn’t really exist. ( I could be very wrong about this, and demand to be corrected, if so). Sandy Alderson was a lawyer, of course, but there’s no indication that his law degree was a means to the end of running a baseball team. It’s all the more reason to regard Epstein’s (and other of those early Boy Wonder-types’) story as compelling. My guess is, that sort of vision has served Epstein well elsewhere in his job.
Hmmm, what am I saying, again?
Albert: Two guys I want to highlight with similar backgrounds-to-baseball as many of the Rays guys: Indians GM Chris Antonetti (first FanGraphs spring training event!) and White Sox AGM Rick Hahn (second FanGraphs spring training event!). Antonetti graduated from Georgetown with a degree in Business Administration, magna cum laude, along with a Master’s in Sports Management at UMass. But then he started out as an unpaid player development intern with the Expos, making extra cash by selling ice cream in the parking lot of Florida State League games. It took a few years, but he made it to the Indians’ organization as a baseball ops assistant, and worked his way up the organization under now-president Mark Shapiro.
Rick Hahn, on the other hand, had an even more unconventional path. He began as a history major at the University of Michigan (some liberal arts-sy major at least) and was once on the track to becoming a lawyer, schooling at some institution called Harvard Law School. Then one day, he decided to move himself and his wife to Chicago because he wanted an MBA at the Kellogg School of Management, which I heard is pretty good. After flirting with a venture capitalist career (Carson told us the meaning of that earlier), an acquaintance of an acquaintance of an acquaintance connected him to one Jerry Reinsdorf. No real opportunities there, just the opportunity to hang out with pro scouts. But Hahn spent several years working in sports agency, then as Charlie Sheen (driving his wife to and from work since she was the only source of income for the fam) before finally getting an opportunity with the White Sox.
The reason why I know all this junk is because I interviewed both of these guys several years months ago. Feel free to check them out: Antonetti and Hahn.
Cistulli: You’re a man of many talents, Albert Lyu. Or at least two talents. At least that many, for sure.