Effectively Wild: A FanGraphs Baseball Podcast - Effectively Wild Episode 1310: Pool Party

Episode Date: December 19, 2018

Ben Lindbergh and Jeff Sullivan banter about the Astros’ signing of Michael Brantley, the curious cases of blocked prospects Kyle Tucker and Alex Verdugo, the Mets’ signing of Wilson Ramos, and the unique career of globe-trotting Trey Hillman. Then (20:49) they talk to Charlie Olson, co-founder and CEO of Pando Pooling, about his company’s plan […]

Quick, fast down, trash clown. You couldn't put up your dukes if our gloves were half-pound. Slow your roll, partner. Just hold your horses. For you, go startin' mess. Know your role, bitch. Tone deaf, shit popper. Sess, hold your whole shit. Remember that you may get hurt. Safety first. Slow your roll, partner. Just hold your horses. For you, go startin' mess. Know your role, bitch. Tone deaf, shit popper. Sess, hold your whole shit. Remember that you may get hurt. Hello and welcome to episode 1310 of Effectively Wild, a baseball podcast from Fangraphs presented by our Patreon supporters. I am Ben Lindberg of The Ringer, joined by Jeff Sullivan of Fangraphs. Hello! Hey Ben! We have a guest later in this episode. We will be talking to Charlie Olson, who is the co-founder and CEO of a company called Pando Pooling that is yet another company that has been conceived to try to pay minor leaguers since teams have opted not to. bit different from Big League Advance, the company we talked to some months ago. That one was

essentially upfront, you get a payment, and then if you make money later, then you pay the company some percentage of your earnings. This one is a bunch of players essentially pool their futures and construct their own safety net so that if one guy makes it, then the company and the players in that pool end up taking a portion of the salary he makes. And everyone who washes out just gets to kind of feed off of that guy's success. So it's another innovative solution that people are just putting forth here because the game itself is not currently a solution for paying minor leaguers. Yeah, although I guess unlike with something like big league advance, in either case, of course, if there were changes to the minor league pay structure, then the circumstances would be different. But even in a case such as this one,

as we'll talk about later, even if minor leaguers were guaranteed more money, that doesn't mean that they wouldn't be interested in potentially making even more money on top of that just to sort of improve their safety net so you know if there if there came a day which i do not think is near but perhaps nearer than it used to be that minor leaguers are paid a fair and living wage from the get-go it seems like that wouldn't necessarily disrupt this model too terribly bad because even a living wage could still be improved upon. So in that case, maybe this model is not quite so vulnerable as one would have otherwise thought. And in case you're wondering, pando is evidently Latin for I spread out

and also refers to a colony of aspen trees whose roots link together to make a big, strong underground network. So it's an analogy. I guess that is what is happening for minor leaguers here. So we will talk to Charlie in just a few minutes. We do have a couple things to banter about beforehand. I guess we could get the latest transactions out of the way. You've written about a couple of those. Should we talk briefly about the Astros signing michael brantley to a two-year what is it 25 million dollar deal 32 i believe 32 all right

you know better than i do you wrote about it joe kelly got 25 over three michael brantley got 32 over two i believe no options no vesting no nothing i don't know it's uh it's fair he's good he's a he's a good hitter he uh michaelantley, I remember when Brantley, he needed two shoulder surgeries a few years ago because his labrum was busted and he had, I think, biceps tendonitis. And I guess the biceps are in the shoulder. I am not a doctor, but he needed surgery before a season and then again later on after he couldn't play. And I remember hearing at that point that his shoulder was quote-unquote shredded and it was unclear whether he would ever be able to hit again.

And then in 2017, he came back and he hit well. And then he ruined his ankle. And then his ankle needed surgery. But in 2018, he hit well, and he was healthy. He did not have a single DL stint after coming back from the surgery rehab, and he was a good hitter. A little bit of a worse outfield defender than he had been before. Maybe not a surprise coming back from the angle surgery, but Brantley, for anyone who doesn't know, is just kind of clean and good

and solid. He doesn't excel at drawing walks. He doesn't excel at hitting for power, but he does excel at making contact. He is one of the premier contact hitters in baseball, and he hits for just enough power to be fine. So the Astros project at present for the lowest team strikeout rate. They project for, I believe, the highest team Wc plus i could be wrong in that one but they project to be good and what is i think maybe most interesting here because you know brantley's a contact hitter who hits well just like a lot of the other astros but this does kind of it doesn't by any means close the door on top outfield prospect Kyle Tucker, but it does at least muddy his path to 2019 playing time at the Major League level.

So perhaps not by coincidence, rumors have come out that the Astros are, quote, back in the mix for, I don't know why I said quote anyway, that the Astros are back in the mix for JT Real Muto and that Kyle Tucker could be a centerpiece to a trade there. So the Astros know that a top outfield prospect is valuable, and the Astros didn't get to where they are by trading all of their top prospects for shorter-term players. But Real Modo would be a big improvement because he is probably the best catcher in baseball. He is available.

He could be signed. He's got two years of control left, and maybe the Astros just don't need Kyle Tucker because now they have Michael Brantley. Yeah, it's curious. I mean, A, the Astros have really moved toward more of a contact-first model. They used to be a good team that struck out a ton, and now they're a good team that does not strike out. And partially that is by jettisoning guys who do strike out and importing guys who don't, like Michael Brantley. jettisoning guys who do strikeout and importing guys who don't like Michael Brantley. And it's also, I think, improving some of their players like George Springer, for instance, who was able

to cut down on his strikeouts. And they've definitely used technology and analytics and helped remake guys' swings. And you can read about it in my forthcoming book. But that is a philosophical change that they have made. So Michael Brantley fits into that. But it is kind of curious, the Kyle Tucker blocking here, because, of course, he was and is one of the very top prospects in baseball. He was the fifth overall pick for the Astros in 2015, and he has raked at AAA last year as a 21-year-old. He had close to 1,000 OPS in AAA. And then, of course, he came up and he played 28 games, 72 plate appearances, did not hit at all, batted 141, and then was sent down again. And that's kind of one of those things where no matter how well a guy projects, there's maybe a little more volatility about a prospect

than there is about a veteran. So I think when you're in the race, like the Astros are, I mean, if this had been 2012, 2013, and they had had Kyle Tucker, they just would have let him play through it because what else were they going to do? But when you're in the middle of a playoff race, and it actually was a playoff race for them for much of last season, then you can't really just wait around for the young guy to start hitting, even

if you really do think he's going to start hitting. So I get why they stopped the Kyle Tucker experiment last year, but it would be sort of surprising if they stopped it on a permanent basis. I don't know whether there's something about him that they now don't like that they have seen underlying the numbers that scares them away or whether it really just is that they can afford to spend and they should spend or the players association will get mad and they could always use him as a trade chip if they want to. It's kind of interesting. This isn't so unprecedented. chip if they want to. It's kind of interesting. This isn't so unprecedented. I guess no one was really accusing it of being unprecedented, but we've seen something kind of similar with the Dodgers. Alex Verdugo is still 22 years old. He's been a top outfield prospect for a while, a multi-time top 100 prospect. He broke into the top 50 Baseball America prospects this past year, and he has batted like 900 times at AAA,

and he's barely broken into the majors. He's been at AAA for two full years. He hasn't been quite as good as Kyle Tucker just was in AAA, but Tucker is kind of a year behind the Verdugo path, if you will, and it's interesting. You figure the Dodgers and the Astros sort of operate in similar ways, and they are teams who are at similar levels. They are both just perennial World Series contenders, and the Dodgers haven't really made room for Verdugo, and the Astros don't seem to be making room for Tucker.

Now the Dodgers are seemingly, at least based on reports, they are bandying Verdugo's name about in several different trades and possible trades, whether it's talking to the Indians or talking to the Marlins. So Alex Verdugo and Kyle Tucker are two different people. Let me check that on this for reference. Yes, they are different people. So what happens to one does not necessarily happen to the other. But it is it's curious that you've got two prospects who seem like they are ready to make a difference at the major league level. And and they are at least it seems like being somewhat overlooked by their employers and it does it does make you wonder what those teams might know about those players and the only other major move that has happened since we last spoke i know that you have produced posts on daniel descalzo and lyle's so i don't want to short change either of those transactions. But the biggest move that

has been made other than the Brantley signing is Wilson Ramos going to the Mets for, let me get this one right, two years and $19 million. So this ends the dalliance with JT Real Mudo for the Mets. Their solution is Wilson Ramos. And I think many Mets fans were happy about that because while Ramos is not quite the player that Real M extra good and his defense is you know it has seemingly declined he used to rate according to defensive run saved which does include pitch framing and all that stuff he was at least 10 runs better than average as a catcher in 2011 and 2013 and 2015 and so he had a record of being an above average defensive catcher he is not that anymore this year he rated at negative five runs last year he rated at negative five runs. Last year, he rated at negative five runs. So Ramos no longer maybe a really good defensive catcher, which you wouldn't expect him to be because he is in his 30s and he's had two ACL surgeries. I think it is, but he hits well and pitchers seem to like him. I think he's got those leadership intangibles, etc, that people like to talk about. Wilson Ramos, I'm just noticing, has zero career stolen bases, but three caught ceilings, two in 2011. That's fun.

I wonder what dissuaded him from trying to do that more. Anyway, just a nice, boring, effective signing by the Mets. It's not a big contract, but Ramos should be good. He's backed up now by Darnot and Ploiecki, depending on what the Mets elect to do. I guess the rumors are they're open to trading Ploiecki, but they have depth and they didn't trade current value for current value in Real Mudo, so I like it. It's boring and I like it.

Yeah, well, the NL East arms race continues. Anything else that you want to touch on? Well, I wanted to ask you because you have produced a baseball article. It is not a baseball article about the free agent or trade market. It is a baseball article about perhaps the most interesting coach in professional baseball. It is about Trey Hillman. You had asked if there was any way to get Trey Hillman on the podcast several weeks ago, and I followed my leads

to a dead end, so nothing happened. You were able to follow some leads elsewhere, but tell us why Trey Hillman has captured your attention. Yeah. well, I thought about trying to get him on the podcast, and then it just seemed like he had such a long and winding road in baseball that it just felt more like a written piece to me. But I will link to it, and you can all consume it that way. It's like a podcast that you read with your eyes instead of your ears. It's the same kind of concept. There's information that you consume in some way. So Trey Hillman fascinates me because he's one of these baseball lifers. He's been in the game his whole career.

He started as a player. He was an undrafted free agent. He played for a few years in Cleveland's system. He was not very good. He immediately transitioned to scouting. He scouted for a little while. Then he went to the Yankees system where he managed for 12 years, 12 years during many of the dynasty years. He was the manager of the core four, you know, Jeter and Rivera and Pettit and Posada as those guys came up. And he was one level away. He was managing in AAA as the Yankees were winning World Series and winning pennants from 1999 to 2001.

And he just sort of stalled out there in that system, had a really good record as a minor league manager, won a championship at one of those stops, won manager of the year in three of those leagues. And then he went from there to the Rangers, where he was a farm director for a year. He talked to them about becoming their manager. Ultimately, they hired Buck Showalter because Trey Hillman had already committed to go manage the fighters, the Nippon Ham fighters in Japan in the NPB. And he then spent the next four years there. And he won a Japan series. He won a championship in NPB. He was the second foreign manager to do so after Bobby Valentine. So that's a cool accomplishment, A, to do that.

Then he comes back to the States. He obviously, as everyone knows, manages the Royals for three years. Undistinguished tenure. I don't think you can really pin that much of it on him. I mean, not sure any manager could have done a whole lot more with that talent. Those were the Jose Guillen years. So he gets fired in 2010. Then his odyssey continues. I mean, he goes to the Dodgers. He becomes their bench coach for a few years. He gets fired there too. Seemed like he was sort of a sacrificial lamb for Don Mattingly.

Then he's a special assistant for the Yankees for a year. Then he's a bench coach for the Astros for two years. He had resigned to be a bench coach with the Astros for 2017. But then the SK Wyverns of the KBO, Korea Baseball Organization, came and said, come manage us. And he said, okay. And so for the past two years, he's been managing in Korea and he just won a championship there too. So he has now been the only manager to win a Korean title and a Japanese title. He's obviously the only manager to have managed in MLB and NPB and KBO. It's just kind of an incredible patchwork career. He's gone everywhere and done everything, and he has managed in the highest level leagues in three different countries with

three different languages. It just sort of fascinates me. So he told me all about the journey. And it should be noted, not only three different languages in which I can only assume that Trey Hillman is fluent, because I can't think of an alternative way to manage teams in all three countries, but three different countries, three different languages, but also three very different playing styles. Like Japanese baseball looks very different from American baseball, but then Korean baseball looks very different from American baseball, but then Korean baseball looks very different from Japanese baseball. So it's just it's a testament to, I guess, is adaptivity. And just one of those every so often you hear from some some writer about like a baseball lifer that you've never necessarily heard about.

But, you know, the writers always had positive interactions with a baseball lifer. And the lifer has been in the game since he was 18 years old or, or whatever you think, oh, that's, that's kind of interesting, but you don't really get to know that much. Maybe it's like a trainer or an equipment guy or just someone who's always

been around the game. But Trey Hillman has one of those baseball lifer stories just for the ages, regardless of whether or not he's going to win a world series in major league baseball, whether or not he's going to get the chance to manage in Major League Baseball. I don't know if this is just part of growing older and therefore having more interest in the human interest stories as opposed to the whatever we can do to maximize and win as much as possible kind of stories.

Having a career like Hillman's out there is just more appealing to me than I guess it was in the past, but really just stunning. appealing to me than I guess it was in the past, but really just stunning. I can't imagine what it would require to have somebody else come along to manage in all three different leagues. Now we just need Hillman to go coach Williams, Estadio, and Venezuela, and I think that just kind of ties everything up with a neat little bow. Yeah, I know what you mean about the human interest stories. I mean, everyone in baseball has a story. They had to sacrifice things to get where they got. They had some hardship. So sometimes those stories almost follow a type of template where you start reading one and you think, well, yeah, I know how this goes. This belongs in that category of ballplayer story. But Hillman really just is in his own category.

Dan Hirsch sent me some stats, of course, because I can't do anything without Dan's help. And Hillman is by one definition, the most traveled manager in history, or at least since the reclassification of the minors in the 60s, and that he has managed at eight different levels if you count his minor league stops, which is pretty incredible. And yeah, as you mentioned, very different play styles. Japan, obviously, not that much power, lots of bunting. And the KBO, not as much pitching power, but lots of hitting power. And it's a different style of baseball there too. And he kind of became the Johnny Appleseed of the shift over there in Korea. So here they call it the Boudreaux shift after Lou Boudreaux, who sort of popularized the shift against Ted Williams. There they call it the Hillman shift because he brought it over there because he'd been with the Yankees and the Astros. And naturally, he was going to keep doing what worked there. So it's really a pretty interesting career. And now, of course, he is the first base coach for the Marlins. He is not likely to win a World Series in the near future in that role, but

I do kind of hope he gets one. I kind of hope he gets a chance to manage again. Just, I mean, imagine if he were able to win a championship as a manager in MLB on top of the other championships, that would be pretty cool. And I think it fascinates me also because you could look at his career as this series of close calls where he almost made it. Like he was one level away from the Yankees when they were winning their championships. He accepted that Royals job just before Joe Torre declined his offer with the Yankees. And then Joe Girardi was hired. So maybe if Hillman had been available, he had a relationship with the Yankees and with Brian Cashman, of course. Perhaps he would have interviewed.

Maybe he would have been the one winning that 2009 World Series. Who knows? And then, of course, in Kansas City, Ned Yost took over and ultimately eventually won a World Series. And then he left the Astros to go manage in South Korea. And they won the World Series the year after he left the Astros to go manage in South Korea and they won the World Series the year after he left. So there are lots of these like almost made it cases and yet he did make it in the places where he chose to manage. And he was saying that, you know, winning in low A, winning in NPB, winning in KBO, it all kind of feels the same. I mean, you're with these players all year,

you go into spring training intending to win a championship wherever you are, and you're in the dugout, it's the same game more or less. And so he said all of those sort of felt the same. And so I wonder whether the major league championship would also feel the same, or would it feel just a tiny bit better? So I kind of hope that he finds out one day you had referred earlier to how a written article is like a podcast you read with your eyes have you considered just voicing your own article and releasing it as a bonus ringer pod yeah well there are sites that do that right they have like a robot read their articles or even the the author and uh i never ever listen

to the recording instead of reading but presumably someone does so i don't know yeah there are uh also weird youtube accounts that will just like read other sites articles and just steal the content and turn it into voice it's. The internet is a strange place. All right, let's take a quick break and we will be right back with Charlie Olson of Pando Cooling. I'm waiting in a neighbor's yard Burning down broken and cold yards Someone forgot the golden word

Let's start fighting another day All right, so we are back and we are joined, as promised, by Charlie Olson, who is the co-founder and CEO of Pando Pooling. Hello, Charlie. Hey, guys. Great to be here. Yeah, good to have you. Give us the basics about how you and your partner, Eric, came up with this idea. volatility, which also makes us sound like the two most boring guys alive. And the idea for Pando originally did not start as a baseball idea. Eric was doing research with a labor economist studying how careers kind of across the board were becoming more volatile, that more people were entering these careers in which there were payout outcomes that look a

little bit like baseball, where there's a small group of people that will rise to the top and take home a lion's share of the earnings. And we realized that this is actually kind of an increasingly macro issue for our economy and tried to figure out different ways that we could help be a part of the solution. And came up with this idea of pooling, which fundamentally is fairly simple, right? Grouping a group together and in doing so, agreeing that that group has lower risk as a group than the individuals in that group would have alone. And so we studied kind of this problem and assessed where we could take it. And I think to listeners of this podcast, baseball will seem a logical destination

given the, I think, huge disparity between quote-unquote winners and losers in baseball. And that might be the $300, $400 million contract as opposed to the $5,600 a year minor leaguer. In addition, there's so much data and statistics that allow us to help project expected future career earnings. And in addition, I think it's an ecosystem that has a big group of individuals who are vulnerable. And we don't think about professional athletes oftentimes as being vulnerable as we think about the Steph Currys and Mike Trouts of

the world. But those guys are the needle in the haystack. And for the vast majority of baseball players, these are guys that have committed major portions of their lives to chase a dream, an admirable dream. And we want to make sure that they leave baseball with a more secure financial future. And that's kind of how we landed on baseball. I'm happy to tell you more kind of specifically about how Panda works. Yeah. So obviously, much of this interview is going to focus on the baseball part. And I know that Ben and I are both very much in favor of allowing players to achieve some measure of financial independence, even if they're not necessarily so successful. But one might also point out that baseball is not a necessary pursuit. You know, it's not the most

noble career to pursue necessarily. So how, I'm sure this is still the initial stages, but how will you know when Pando has been successful in baseball and can therefore be applied to other high volatility industries? Yeah, definition of success is very interesting. I think that, you know, our stated goal is to help more people control their future and improve their odds of, you know, future financial security. In baseball, we've done that over the past year in that we've brought 180 players onto our platform. So to me, there's a modicum of success there. And we've taken that success and we've already actually launched into football, into the NFL. So, you know, I think that there's another side of that, which is, you know, if you think about kind of our pooling model and how it works, there are

pools that will take years to kind of realize what happened in that pool. And that's part of that's part of baseball. I will push back on saying that, you know, it is absolutely a free market and that baseball players don't have to become baseball players. They could go into any number of careers. However, I think that for many of these young men, you know, this yes, you're right that in theory they can choose, but many of them are pushed to, to, and it's the only thing they know. And it's the only thing kind of they want to do too. So does it, is it a choice for a, you know, a superstar pitcher coming out of high school? Who's, you know, parents, friend, agent, advisor, whatever you want to call

them, uh, are all telling them that they're, you know, the greatest gift to baseball, and that this is kind of where their future should go. Like, is that a choice? Right? And so, you know, one thing there is, you know, we want to protect people and then help encourage people to make informed decisions about their career. And hopefully, Pando can be a tool in their, in their, or an arrow in their quiver, I suppose. So can you walk us through a case study, how this would look? It could either be with hypothetical players or past players. How would this hypothetically benefit players in the past, let's say? Yeah, sure.

So, you know, here's, here's a case study that we use often, you know, a first round draft pick, while not all created equal, on average has expected future earnings of roughly $45 million. And that's pretty good, right? I mean, I think most people listening would sign up for that deal. The problem, however, is that, and again, I'm just going to use round numbers just to prove a point, but, you know, roundly speaking, from the first round draft pool, roughly 50% will play in the majors and less than that will reach arbitration. Right. That point where they make their first real cash. So if you think about the math, therefore, if 50 percent are making roughly zero, you know, after their signing bonus, the other 50% are on average making $90 million.

So a first round draft pick at the time of the draft has a coin that they're holding, and they get to control a bunch of kind of like how they spin that coin and how they flip it and where they catch it. But there's a ton of uncertain variables associated as well. And they flip that coin and there's $90 million on one side and zero on the other. The idea with Pando is if you were to group a few of those first round draft picks together, have them contribute, agree to contribute a small portion of their future earnings to a shared pool. In doing so, you will capture a couple of those winners and they will contribute some amount of money, depending on what they make, which will be distributed to the recipients of the pool. And for those guys that have the unfortunate luck, or maybe it's not luck,

maybe it ends up being skill, and they don't succeed and they're kind of pursuing their baseball dreams, they land on their feet. They have a safety net from baseball and they have a group of peers that they're kind of, you know, in this ride together with, which is exciting. And so the way we think about it and the way we talk about it is we've just given that player a new coin. And instead of the coin being 90 and zero, the coin is 85 and three. And so, you know, I would ask, you know, kind of members, listeners here to think about, you know, which coin would you rather flip that 90-0 or that 85-3? And I would also encourage, you know, people to think about that those 30 draft picks, those are the, you know, 30 with the best odds of success.

So in baseball, your very best use case is a coin flip at the time of the draft. And from there, you know it kind of precipitously gets kind of longer and longer odds. You had mentioned to us before we were recording that you are not the algorithm guy, which is great because we don't want to ask you about the algorithm. That's bad podcasting. But I was curious, part of the whole model of this is that you are pooling players together. I was reading in Sports Illustrated a case of a player who has signed up with the company but hasn't yet been matched with a pool. Can you speak at least generally about how those pools are constructed? Yeah, absolutely. And one thing that's really important to remember is that players have the

vote. So players control who's in their pool. But how it works is a player would sign onto the platform. And I think the way to think about that is, you know, take a look at the marketplace, see what's out there for you and kick the tires. P we would say to that player hey look player a you look a little bit like these guys and we have two pools that you may find interesting what do you think two active live pools the player comes back to us and says i like pool a i don't like pool b we say okay great let's consider pool a in addition we've kind of run you through our algorithm and you have the makeup that looks similar to these other 20 players that are out there which of these 20 are interesting to you they say 10 are and 10 aren't okay great we're gonna add this this other bucket of 10

to kind of our ecosystem and the third part being the player comes back and says hey I also have these five individuals that I'm really interested in. You know, let me know what they look like. Then there is this kind of organic process where we work together with the current pool members, that individual that joined the platform, as well as their agent, their financial advisor, to build a bespoke product that works for that player. And so, you know, we see a lot of interesting things, right? We see people who want to join pools blindly and they want those pools to be defined by expected future earnings. We see people who say, you know what, I would rather be in a pool with guys I know, whether that's guys I, you know, was playing with at training camp or went to college with or

train with in the off season. And I actually don't care that we are different expected future value. What I would like to do is to weight the pool according to that expected future earnings such that we have a relatively equal trade. So there's all these different kind of like scenarios that we've seen kind of come to fruition with our 25 plus active pools. And it's been fascinating to learn kind of the psychology of a baseball player and how they're thinking about owning their odds moving forward. And so if a player in the pool gets hurt and his career's over, or he gets released, that's kind of how the pooling is intended to work, right? I mean, this is the safety net,

but he can't just walk away. You can't sign up for the pool and then intended to work, right? I mean, this is the safety net, but he can't just walk away. You can't sign up for the pool and then say, okay, I quit. You have to play a certain amount of time. Is there a set time that you have to play before you're eligible for a payment? Yeah, no, that's a great point. And with all of this, we've tried to control for bad behavior, Right. And we do not want the situation where a player joins the pool and then and the next day takes takes a job as an assistant coach at Vanderbilt. Right. That's that'd be a problem. So the way we think about this, actually, the same way you would like kind of vest equity ownership in a company.

Right. You have to you have to exist in that pool trying to become a professional baseball player for a certain amount of time. And if you are released, that's fine. But you can't leave until you've cleared whatever that hurdle is. And that hurdle is defined by the pool. So the pool is going to control the rules, right? So they're going to control the size of the pool, the amount they contribute, whether or not there's a hurdle to those contributions. And the way I would articulate that is, you know, typically players are not contributing until after they reach MLB arbitration. That's the pool kind of hurdle that we've seen most commonly, you know, nothing from their signing bonus, nothing from their minor league salary, nothing from major league minimum.

Only if they reach that point where they can afford it do they start to contribute. And the last would be, again, kind of this temporal threshold. How long do you have to be trying for that you've earned your spot and you've earned your ownership in the pool? And the SIPs mentioned that the contribution is capped at $20 million. So even if you end up making A-Rod money, that's the most that you have to surrender. And on your website, there is a mention of some provision for, you know, a player commits a crime or he's suspended for violating the drug policy or something. What do you do with that guy? And evidently there is some kind of way that people can vote and Pando can vote and you can kind of vote him off the island, I guess.

I'm trying to imagine what the limitations of that are because you wouldn't want this to devolve into some kind of political thing where everyone's banding together to kick guys out who are not going to make it or something like that. So how do you protect players but still keep that provision in there so that if someone commits some heinous crime or something, there's still a way to cut him out of the pie? Yeah, no, we definitely want to avoid this becoming Survivor. This is not supposed to be a game show for baseball players. You know, the way we looked at this is there was a few things

that we could like note from the outside looking in to say these will be instances that will automatically trigger a vote. And if a vote is triggered and there's a unanimous vote, which includes Pando because Pando is an owner in every pool that we create. If there's a unanimous vote, besides maybe the kind of like, you know, party that is being voted about, you can vote someone out of the pool. However, if, you know, one player is not playing well and his stock is slipping and he's gone from AAA to AA to IA, you know, and the rest of the pool members say, you know what, we don't want to support this guy. And they try to vote, you know, Pando would never okay that vote. That's exactly why the pooling mechanism exists. On the other hand, we also

wanted to make sure that we gave players the power to call a vote because we, in many ways, what we're saying is like, look, there are so many edge cases. We are going to put the power with the group and, you know, we can call call a vote on anything but then there has to be kind of this unanimous consent to kind of affect pool composition or affect pool rules etc speaking of protecting against bad behavior this is new enough that i i don't know if you've been tested in this way yet but of course one thing that would be easy to envision is if you have a player come out of a pool and he is greatly greatly, becomes a 100 millionaire that said player might try to figure out a way out of the contract that he signed. So aside from just drawing up a contract as tightly as it can,

is there anything specifically that you have done or tried to do to just make sure that the player cannot remove himself by paying for some high priced attorney? You can find a loophole. Yeah, no, absolutely. I mean, I think that, you know, the backbone of our product and the reason you come to Pando is kind of believing in our contract. And so that's critically important. And you're right, we need to guard against that. So, you know, without divulging kind of specifics of the contract, there are, you know, significant teeth in there that will discourage, I guess, kind of reneging against your responsibility. I think further, what's important to remember is that Pando, as an owner of the pool, is our revenue is tied into receiving kind of those contributions. And so, you know, we are going to be in this with the players and the

other members of the pool. And lastly, again, kind of circling back to where I started, that because this contract is the backbone of our business, you can be sure that the full weight of Pando and our investors and everything that we've built, you know, will be with the pool in trying to ensure that, you know, a player is not able to renege because that would, I think, create a cascading effect where you would question the confidence of joining Pando and joining a pool if you couldn't trust that these were legally binding commitments. So, you know, the biggest thing I can say there is like, know that our entire business is tied up in us being really good at ensuring

contributions happen. So I am curious about how the typical player responds to contemplating his own failure, because that's something that I think a lot of players don't like to think about or aren't wired to think about. When I and Sam Miller were running the Sonoma Stompers, we would distribute these surveys before every game where we would ask people, how are you feeling? And what's your mood today? And, you know, try to get a sense of their physical and mental readiness for the game. And there was one guy who just always circled the highest possible response on every question. And he said, I'm sorry, I'm screwing up your data, but I can't allow myself to think that I am not at my best,

that I am not totally prepared for this game. So I'm just going to circle it as like a motivation tool. And so I wonder whether you've encountered that at all, whether there are certain guys who don't want a safety net because they want to think, well, I'm going to make it. And if I don't make it, I'm screwed and that will motivate me. But it seems like you have gotten some guys to sign up. So how has that gone? Yeah, look, I think you've highlighted, I think part of becoming a professional baseball player is being confident in your abilities. And I actually think that, you know, it's a prereq. It's table stakes for these athletes. And by the way, if somebody comes

to us and says, this is not for me because I love the riskiness attached to my career, and I am incredibly comfortable with my prospects, and I understand where I sit, but this just isn't for me because I love what I'm looking at. I love the odds associated with my future financial security. That's a home run. That's actually a win for us, too. That means that that player is in a position where they don't need a marketplace. Right. And that's that is totally fine.

In fact, like that makes you know, that's that's chalked that up as a win for us. On the other hand, there is something very interesting that although this kind of self-confidence is table stakes, I do believe there's, there's this intense human emotion to have a secure financial future. You know, that this is something that is ingrained in each of us and whether or not we openly talk about it, it's something that exists. And I think baseball players, athletes in general, actually are fairly intuitive assessors of risk because they live uncertainty day to day. Every professional baseball player has seen a player that was better than them who has blown out a knee rounding second or or has had you know has had tommy johns twice in the same year they've all they've all also seen

the player who they believe is worse than them who gets promoted for some kind of extraordinary reason so i think there is a more kind, there's a deeper appreciation for the uncertainty attached to their craft, maybe than exists in some other verticals. And lastly, one of the interesting things about Pando is that some people gravitate to the idea, not because it provides a safety net, but for two other reasons. One, in that it provides this kind of social experience where, hey, baseball is no longer quite as lonely. I now have a band of brothers. Consider this my fantasy baseball team where we have a group now that are kind of aligned and moving through this experience together. And that is very compelling from a social perspective. And I think there's a third group that says, hey, I'm not

worried about downside protection. That's not what I'm interested in. I am interested in saying, hey, there's five other people out there that I think are going to be total rocket ships. And I am one as well. And I'm going to I want to go get a little piece of those individuals. So it becomes less about safety net and more about FOMO, right? It's more about the fear of missing out and they want to, you know, align themselves with those other very interesting players, at least in their eyes. So it does allow, like the idea of the marketplace allows people to, if you think about it, both put risk onto the table and take risk off the table. It really allows for, you know, kind of what we call a reflection of the risk preferences. So some

people, and I think the easiest way to describe Pando will hear this and say, oh yeah, like this is an insurance type product. This is people, for people who want a safety net. On the other hand, you could, you could go to a different group and you say, oh, this is a venture capital fund. This is an individual who has bet on or who has targeted five startups and they're hoping that one of those startups is Google. Kind of same exact model,

just different reasons for using it. In terms of getting yourself out there and finding players who would sign up for Panda in the first place, I'm reading that you do a lot of recruiting through agents, financial advisors and other players who have already signed up. So this is sort of a two part question. One, how do you find that you are most successful in recruiting players, whether that's through word of mouth from other players? And two, when money, at least theoretically, I don't know how many are paying out yet, but when money is designed to go to players within a pool coming from other more successful players, do agents, are they entitled to any sort of cut of that? Yeah. So, uh, word of mouth is

definitely the, uh, I think strongest channel of, uh, I guess, I guess, inbound for us, which is good. Right. So that's that's players saying, hey, I've had a good experience, you know, kind of in the marketplace. And here's why I joined. And here's why you may want to consider it. And, you know, I think recommendations from agents, financial advisors are also really strong, too. But at the end of the day, this and this will lead into my answer to your second part of the question. This is a player centric product. This is designed specifically to help players, you know, specifically. And so for on the, on the second part of your question, do, if there's a pool distribution to a player, does that player's agent receive a cut? That's something we have totally left up to the player and the agent.

In our opinion, that's not our place to assess, you know, whether or not the agent added value in this relationship and should receive a portion of the take or not. That is between, I'd say, you know, boss and client. it take or not, that is between, I'd say, boss and client. And in this case, I mean, player as the boss and agent as the client. So to me, that's something that those two need to kind of negotiate and come to agreement on, but not something that we are going to lean in on. And did you consider starting in other fields first? Was baseball the most attractive? I mean, it fits the model, obviously, and it's high profile, I guess. So it gets you some press and

some big podcast interviews with fan crafts. But is it partly that because it's also an area where maybe you have to wait a while for the payouts to start coming. So what were the pros and cons of starting with baseball as opposed to something else? Yeah, definitely. I mean, we did consider a number of other verticals, largely outside of sports, actually. And I think, you know, one of which was entrepreneurs. And I think people starting businesses face largely the same risks. there were you know some other kind of complications to writing that contract that made that less interesting than baseball to start you know I think baseball is awesome because it is this

closed universe right you can get your arms around who the employers are who the employees are how much people are making what are the kind of like all the data is publicly available, right, in terms of performance and in terms of pay. So those things were really interesting. We also considered entertainers. So singers, songwriters, dancers, actresses, right? That's an ecosystem that has a lot of the same, I would say, kind of like payout makeup that baseball does. And we ultimately landed on baseball after testing out a few different verticals because the response from baseball players was just so pronounced. And again, looking at baseball, we said, you know, wow, the amount of people that come into the top of the funnel, you know, in a 40 round draft is so huge. And the economics in baseball are fascinating. There's just this tremendous IOU that's held up dangling at free agency. And for baseball players, they are forced to take on risk through a long portion of their career

that is unlike risk that anyone else has to take on in any other career. And so we thought, you know, yes, you're exactly right that this is a vertical where the lights are on. It's sexy. It's baseball, right? It's the confluence of sports and money. Maybe that will lend itself to other individuals in other verticals being attracted to our platform and, you know, to be explicit. You know, that's our goal. Our goal is to build a platform upon which anyone in any high volatility career can come to us and search for or find and build their pool. I mean, I think down the road, this is like this would be a hilarious version of Tinder, right? You log on, you're swiping right through baseball players, you get

to some hockey players, you're swiping left, then you get to your oil and gas trader in New York. And then you have your musician from Juilliard and your country music singer from Nashville. And now you've built a pool that is not only kind of like diversified inside your vertical, but out, right? So I think that there's fascinating ways where this model, I think, redefines how we think about career protection and can become something much larger than a solution for baseball players. However, there are a lot of baseball players in need. And so this was a, and it was well received early. And so that was fun for us. And it's been exciting to see kind of the growth of Pando. And really, I think more than anything, fun to have interactions with our clients

and to see how we're leaving a positive mark on their young or not young careers. Yeah, I don't want to just sit here and ask you for some sort of critical self-evaluation. Obviously, you've gotten a lot of good feedback from players. It's part of what you just said drove you to baseball in the first place. But in your interactions with financial advisors, your interactions with agents, and if you've had them, interactions with team people,

maybe even league people, what has been sort of the constellation of feedback that you've received here in the early going, both positive and if any, and I have to assume some, negative? Absolutely. I mean, I think taking anything from zero to one is not without its challenges, negative. Absolutely. I mean, I think taking anything from zero to one is not without its challenges. Right. And there will be there will be doubters. So, you know, one thing from the very beginning, what I what I heard most often was and we kind of already addressed on this on this podcast, which is there is no way you'll get a baseball player to agree to this. They're they're too self-confident. They you know, they're not aware of risk. This is not going to be of interest to them. And, you know, we've kind of disproved that.

So we're moving off of that as being a, I guess, the first line of critique. The second line of critique typically goes something like, very interesting idea. Get it rationally. These are not rational actors, though. And the execution is going to be really hard. This is a complex system. You guys are outsiders. Can you make it work? I don't think this will work in the long run. And, you know, that one we are having to continue to work through. And I know that there are, you know, doubters of what Pando is doing out there. And to me, that's fine. Totally fine. And a lot of them

are kind of very interesting opinions. You know, for me, it fuels me to kind of continue to, you know, hopefully prove them wrong in, I would say, in service of our clients. And then I think the last thing becomes, okay, great. Like you're having initial traction. Will this exist in baseball in perpetuity? And if you have these bigger dreams of going elsewhere, you know, will baseball remain a priority or a focus? And to which, you know, my answer is, you know, the only way in which we are able to leverage the work that we've done in baseball and move and hold, I guess, shine the light on that and use it as a something that amplifies our ability to go into other verticals. The only way we're able to do that is if we do extraordinarily well for our clients. And so, you know, there, too, it's kind of like, you know, we will never

take the eye off the ball. We're in a client, we're a client service business. But believe me, guys, you know, this will not come as a surprise. It's, you know, baseball is a fascinating game with a very interesting power structure. And there are a lot of individuals, I think, that are, you know, reticent to see new faces, right? I mean, status quo is good for a lot of people. And I think there are those that question whether or not Pando will have a place in baseball's future. I believe it will. But, you know, it's okay that everyone doesn't jump on board right away. If they did, I would say this probably is not an opportunity worth pursuing slash it would already exist. the typical pando player i mean one would assume that there aren't a whole lot of very top prospects who signed big bonuses and are sort of set whatever happens but maybe there are some guys who would surprise us because they're part of one of these sort of social groups or something so do you tend

to see guys signing with you just after they get into pro ball or is it guys who've been around for a while and can kind of contemplate the end more so than someone who just got into the game i mean what does the the breakdown look like in general terms yeah it is honestly a very difficult question to answer in part because we do believe there's a pool for everyone and however like i can tell you how kind of it's evolved you know know, to, to, to start. And I think this was more than anything, an access problem that, you know, my co-founder and I didn't, didn't know anyone at baseball. So we were having to kind of like fight our way in and, and, you know, try to get people to listen to us. I would say the, the, our typical client was a, you know, mid to late round pick who was maybe just entering ProBall.

A few months later, we were signing much higher round picks who were moving up in, kind of up through the ranks. Then we moved on to having guys with service time and top round picks. Now we have the whole gamut. So we have, you know, players that are rookies to players that have been playing for a long time, players from the first round to players that are undrafted, players at all stages of their baseball career. So, you know, I think there would be some names in there that would surprise you.

And one other thing I would caution you on again is this idea that a player that signs a good signing bonus is, quote unquote, either set for life or good no matter what happens. We are close with financial advisors and kind of the rule of thumb that I often hear from them is that they need their client to have 5 million in invest investable assets in the bank at the time their career is over right if they can if they can do that and remember that's going to be most likely in players mid-30s they can do that they can earn a you know a conservative rate of return that's going to give that athlete enough income to to live off of and then they can they actually do whatever they want however in order to do that

you would need in theory to sign a signing bonus of you know 10 million or more because half of that is going away right away and you would never be able to spend anything which is not the case given that players in the minor leagues again make nothing right so so this is the part that's really interesting. So even those very top picks, they're not set. That's actually not the equation that they're facing. They are, however, you know, with regard to Pando,

they do have this opportunity to join a pool at that point with a bunch of other really high caliber, high expected value individuals, and through their safety net, ensure that they're set. So interestingly, I actually think that this product is most valuable in the top two rounds of the draft and the top 100 prospects slash guys that have reached the MLB

and are either approaching arbitration or have just have reached that pointB and are either approaching arbitration or have just reached that point. I actually think those three buckets are the groups for which, and it makes sense, right? That you will have the most valuable players in the pools. Therefore, the safety net from the pool is the most valuable. Therefore, you've kind of like, you've insured either one of two outcomes. One, you're set for life. life or two you have this outcome and you make 100 million dollars and you walk away with 93 in which case you've won 100 times over anyways right and and fundamentally that right that's the trade we're talking about is is an individual

willing to give up a small portion in the very rare but huge payout outcome in exchange for increasing their likelihood that they make that first million, that second million, that third million. That fundamentally is the trade we're talking about. Will Barron Are pitchers more persuadable just because of the elevated risk of injury? David Elikwu Yeah. you know what's interesting? It really depends on the individual, their risk preference, and how educated they are to the riskiness attached to their career.

You know, I think that you highlight a great example of a kind of like a statistical truancy, which is that pitchers are higher volatility because there is greater injury risk. But if they're on it, if the player is uneducated to that elevated injury risk, then none of it matters. So, you know, part of our job is in the education side of things. But, you know, at least coming in, unless a player has been pre-educated as to what their career odds are, there really is very little difference between pitcher, position player, etc. So we're talking to you now, of course, about Pando, about pooling money together. We talked a few months ago to Michael Schwimmer of Big League Advance, which is a company that

tries to, or essentially does, pay players up front in exchange for some percentage return of their future salary. And those are at least two companies that have come, to my knowledge, to Ben's knowledge, I can't think of any others that are active, but exactly how crowded is this general marketplace? Yeah, you know, I think it's not very crowded, first of all. And secondly, I would welcome the crowding. I think more options on the table for players is a good thing. You know, BLA has a very different model and they solve a very different problem. And they do it in a good way, in a very interesting way.

I mean, my old career was in private equity and this is that model, right? career was in was in private equity and this is that model right it's it's offering someone the opportunity to take chips totally off the table in cash today and at a discount to expected future earnings and that's great that's that's a great product we are trying to do something different so i don't even consider us to be competitors, but I would actually encourage more competition. I think that, you know, generally more people in this space is going to create, you know, more opportunities for players, giving them more options and like almost by definition, therefore kind of a better financial outcome. Do you know, again, not to get too much into specifics, but do you know if you have players signed who are also signed with Big League Advance? Yeah, I prefer not to say, though I think that when you're talking about,

both models involve trading away a small portion of your future earnings. I would expect that more often than not, players are going to be reticent to double down on that trade. So lastly, is there any way in which a new CBA or perhaps an owner actually opening his pocketbook and paying some minor leaguers? I mean, are these things that you have considered that could be on baseball's horizon? Perhaps players will start getting paid earlier in their career at some point down the road. Does any of that affect this business model that you have already committed to or how you might structure it in the future? Yeah, no, I mean, the possibilities are limitless. I think that as far as baseball goes,

I think that what we will move towards over time will be a economic system where players are paid for their performance at the time of that performance. And, you know, I think it will take some time for the model to shift in that direction. But I think that that is the very logical outcome to kind of like what we're seeing in the marketplace. And that's a good thing. I think that's actually, that's a good thing for for players and teams alike now for us a more efficient system where players are rewarded for their value is i think an improved one and for like but for pando you know you still haven't done away with the riskiness attached to your expected future earnings, right? So there are still these big gaps over a player's career where they have something coming

up on the horizon where they hope they're in a small group of players and they believe they are standing here today, but there's a lot of things that need to go right for them to get from A to B, right? So that issue I don't think will go away. So there will be a place for Pando, I think, in baseball's future. As I said, this is not going to be the industry, I don't think, that Pando makes the most of its revenue from. I actually don't believe that will be the case. It's actually a fairly small industry in the grand scheme of things. Our job is to be here in support of players in whatever way we can. And if we can tweak the model, and the very nice thing about our model is that it is inherently flexible because it's a marketplace and the players can speak to us

that, you know, that we'll do that. We'll do that in support of our clients. So, you know, I think we're moving in the direction of giving players what they should have, which is the dignity of a more secure financial future. And the more options that we can put on the table to support our athletes, that's a good thing. If we can increase kind of access to baseball and a quality of access, that's a good thing. If we can encourage more people to want to make this jump and to feel like they have greater ownership over the opportunity costs of pursuing a career in professional baseball, that's a good thing, right? So in my eyes, kind of all of these companies are coming together to help and support the athlete. And at the end of the day, that's, you know, I think that's what's where we kind of share a vision of an improved baseball.

Have you considered expanding into the vertical of people who podcast and write about baseball? I'm ready. I'm ready right now. Does the model require that at least one member of the industry make money? Because that might be a problem. Yeah, no, you guys have chosen an industry that is both uniquely low floor and limited upside. So a lot of uncertainty. Seems like a good fit in that sense. Except that there's almost no one who makes the millions that the rest of us can mooch off of.

So that's the problem. What do you mean almost no one? I don't know. I'm sure Ken Rosenthal does well. But yeah, that's what I mean. Almost no one. I don't know. I'm sure Ken Rosenthal does well. But yeah, that's about it. No, I think you guys know you guys are on to something. And, you know, one of the things that is funny, too, as we reflect on is that, you know, while our while our kind of like research does suggest that more careers are becoming volatile. You know, this is not the case for for everyone and it's not the case for all of your listeners. And I guess one thing that I just reflect on is, you know, even in the case where you are maybe not in a volatile career, there is a place for you with an idea like Pando because maybe you want to embrace some of that risk. Right. So what if you guys as podcasters could be the, you know, the individuals that are the

steadying force, right? You guys are the steadying hand to a pool. And that's a scary thought. Well, yeah, true. And you get to, you know, to pool with five, you know,and-coming minor leaguers, right? And that's your group where you guys actually are the steady paycheck, the group that kind of lowers the risk. But in exchange, you receive kind of some of the volatility that comes from these other verticals. I think there are all of these interesting ways for people to come onto our platform and our marketplace

to express preference in really interesting ways. And so, you know, we're fascinated and hoping to be able to support those individuals. I guess Patreon is our Pando. As long as our listeners never abandon us, we won't go hungry. There we go. There we go. Well, hopefully I've done nothing to push them away. And if I have, we may have to talk again. All right. Well, the website is pandopooling.com. You can go there and read up about it even more if you'd like. We will link to it, of course.

And we have been talking to Charlie Olson, co-founder and CEO. Charlie, thank you very much. Thank you, Ben. Thank you, Jeff. Appreciate it, guys. Thank you. All right. That will Appreciate it, guys. Thank you. All right. That will do it for today.

By the way, congratulations to former Effectively Wild guest Sal Agostinelli, who joined us on episode 1239 to talk about signing and scouting Williams-Estadillo. He is the Phillies International Scouting Director, and he was named International Scout of the Year, an honor that I think should be his every year for as long as Williams Estadio is in the major leagues. Another recent Effectively Wild guest, Terrence Gore, just got a job, and it's his old job with the Royals, except it's a major league deal and he's on the 40-man. Unfortunately, that happened after we recorded today's intro, but next time, Jeff and I are going to have to talk about the team the Royals are putting together. It's not going to be good, but it might be fun. You can support the podcast on Patreon by going to patreon.com slash effectively wild. The following five

listeners have already visited that site and signed up. Pledge some small monthly amount to keep the podcast going. Sean Dundar, JM, Jimmy Babowski, Tripp von Minden, and Mariana Sanders. Thanks to all of you. You can also join our Facebook group at facebook.com slash group slash Effectively Wild, and you can rate and review and subscribe to Effectively Wild on iTunes and other podcast platforms. Please keep your questions and comments for me and Jeff coming via email at podcastfangraphs.com or via the Patreon messaging system if you are a supporter. Thanks to Dylan Higgins for his editing assistance, and we will be back to talk to you very soon. All of the earth All of the earth