Detroit Tigers: Understanding who’s running my team

One of a series of articles looking at the front office structure of each major league team. Let’s take a closer look at the Detroit Tigers.

Detroit Tigers

• Owner: Christopher Illitch
• Executive Vice President and General Manager: Al Avila

Illitch became the owner of the Detroit Tigers when his father, Mike Illitch, died in 2017. The elder Illitch, the founder of Little Caesar’s Pizza, had purchased the club in 1992 from Tom Monaghan, who at the time owned Domino’s Pizza.

Mike Ilitch was known as an enthusiastic but largely hands-off owner who felt that his job was to ensure that the purse strings were open and then let his general manager operate. It took him a while to find the right GM to operate with that level of autonomy. Illitch ran through three GMs in his first four seasons before settling on Randy Smith, a two-generation baseball lifer who had formerly run the Padres.

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It was a testimony to Illitch’s patience that Smith ran the team through 2001 with a career .423 winning percentage, and without ever reaching .500, yet kept his job. Finally in 2002, however, when the Tigers lost their first six games, Illitch fired both Smith and field manager Phil Garner and hired veteran Dave Dombrowski to take over front office operations.

Dombrowski lasted through 2015, building the structure that led to five post-season appearances, before departing for Boston and turning the operation over to his top assistant, Al Avila.

To date, Chris Illitch has demonstrated a preference for his dad’s light touch with one exception. He has enforced more payroll restraint for reasons that will be gone in to shortly. In player personnel issues, however, he has deferred to Avila, even though the four-year GM has yet to establish that he can run a successful operation.

About that money situation. With a valuation estimated by Forbes at $1.25 billion, the Tigers rank 21st in MLB. That’s low given the metropolitan area’s standing as the nation’s 12th largest. But the city itself ranks only 23rd at 672,000 in population, far smaller than its 1.8 million peak in the mid-20th Century. Simply put, the Tigers occupy a declining market.

As a result, while the team’s valuation has approximately tripled in the past decade, revenue growth has not kept up. At $276 million, the Tigers ranked 19th in team revenues in 2019, having fallen behind the Padres, Indians, Brewers, Rockies, Rangers, and Nationals, and with the Diamondbacks – at $175 million – nipping at their heels.

For the 2018 season, they ranked below the average revenue level in all four major streams: league sharing, market power, stadium revenues, and brand-generated funds.

Complicating this for many years was Mike Illitch’s tendency to spend freely to the point of recklessness in the pursuit of players he liked.  You can trace that back to the family’s earliest days of control when he wrote Cecil Fielder checks totaling $36 million for five seasons, for a time making Fielder the game’s highest-paid player. That may not sound like much today, but during a couple of those seasons Fielder was baseball’s best-paid player, his salary alone accounting for a gargantuan 41 percent of the entire Tiger payroll.

It didn’t help that injuries reduced Fielder’s performance – by the deal’s midpoint, he was only a slightly above-average player. Those facts in combination go a long way to explaining Detroit’s consistent sub-.500 performance all those years.

Things only occasionally changed. Prior to the 2016 season, Illitch dictated the signing of infielder Miguel Cabrera for eight years at $31 million per season. Because Illitch allowed the Detroit Tigers to operate with a suis generis $212 million payroll, that one-man commitment didn’t hamstring Avila’s operations too badly…even when chronic injuries cut into Cabrera’s value.

The problem was that Mike Illitch was operating the team at the bare margins…and he knew it. Just to pick one season, during 2016 the Tigers grossed $268 million in revenue, meaning that Illitch was devoting nearly 80 percent of team revenues to player salaries. No business can sustain that, and following his dad’s death, Chris Illitch has re-introduced rationality to the budgeting process.

Indeed, the Detroit Tigers were one of the few teams to operate at an operational deficit in recent years, running negative balances in 2015, 2017 and 2018. Chris Illitch only turned that into a profit in 2019.

He did so by sharply reducing payroll, to $129 million by the end of 2019. But that only underscores the problem presented by Cabrera’s ongoing burdensome contract. Between him and Jordan Zimmerman, the team’s second-highest-paid player, they will siphon off 51 cents from every Tiger payroll dollar in 2020. How do you build around that?

Answer: You don’t. The Tigers lost a combined 310 games since the start of the 2017 season, finishing a cumulative 118 games out of first in the AL Central. Worse, they will continue to pay Cabrera $30 million through 2023.

The combination of the decline in on-field performance and the broader municipal-regional decline have hit hard at the box office as well. Attendance, which peaked at just under 3 million when the Tigers last won the AL Central in 2014, has basically halved since then.

Going forward, the first challenge facing Avila will be to survive the impact of the Mike Illitch legacy signings. Since it’s hard to project the Detroit Tigers having the financial wherewithal to compete at the top of the free-agent market in the near future, that puts particular emphasis on the team’s farm system.

But that’s more bad news. Since becoming general manager, Avila’s farm system callups – the most impactful probably being pitcher Michael Fulmer, outfielder JaCoby Jones and catcher Grayson Grenier – have produced a cumulative -15.3 games of impact on the team’s fortunes as determined by Wins Above Average*. Not a single one of them has done well enough to entice Tiger management to offer anything beyond the standard pre-arbitration, one-year deal.

Of the 26 rookies Avila has brought up since 2015, Fulmer is the only one to have generated a cumulative WAA in excess of +1.0.

*This calculation is obtained by determining the net impact of all player transactions on team performance for the season(s) in question. Wins Above Average is a zero-based offshoot of Wins Above Replacement; thus, the final figure suggests the degree of positive or negative movement in the standings attributable to front office moves.