Mark Shapiro has spent two seasons as Cleveland Indians president after nine as the team’s general manager. He twice was named baseball’s Executive of the Year.

This past season was as tough in recent memory for the Indians, and the team is well aware what that could mean to future attendance. Shapiro recently sat down for a lengthy conversation with Pat McManamon, and touched on many aspects of the team — from last season’s disappointment to what another 500,000 in attendance would mean to the team’s payroll to trading two Cy Young winners to finances to the team’s ability to retain its free agents. The conversation:

Question: Talk about these two years as president after so many years as a GM.

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Answer: There’s not a day I don’t feel fortunate to have a job like this. Adding the business component in has been an incredible amount to learn. So two years in, I feel like I’ve learned a tremendous amount new about the business of baseball. Adding that to my experiences of my operation on the field has given me a pretty global perspective of the business of the game in Major League Baseball. To sit here at 45 years old and now I have a much more detailed understanding of the business side and the Major League Baseball function and the commissioner’s office as well as the on-field, I feel very fortunate to have that perspective.

Q: What one or two things were the most challenging to learn as you made the transition?

A: I don’t know about most challenging to learn, but the single most challenging facet to running the business organization is, how do you measure, compensate, reward the business side of the operation separate from team performance? It’s clear that, obviously, the biggest lever and the most important area of focus is a winning baseball team. But there are people in this building on the business side who, even when the team doesn’t win, are still doing very good work.

It’s very hard to evaluate that. And it’s very hard to see that when the team struggles. And it’s very easy to mask bad work (on the business side) when the team does well.

So to truly measure and build a sound and good business organization and evaluate and reward it separate from team performance . . . that’s been an incredibly complex challenge and much more difficult than I ever imagined.

Q: There would have to be some unique challenges within that to Cleveland, too, I would think.

A: Yeah, any market that is going to deal with any cycles of winning, it’s going to be important that you still reward people when you go through challenging times and that you have the ability to measure what is still a good sales performance or what is still a good marketing performance in light of or despite a challenging team performance environment.

Q: And also a challenging economy?

A: Right. So setting the right goals. How do you set the right goals? All those things, those have been intellectual as well as strategic challenges for us.

Q: This is a little global and I want to get more specific about the team, obviously. What attracts you about baseball?

A: The game of baseball?

Q: Yeah.

A: That’s easy. My love of baseball ties directly back to my dad’s love of the game, ties back to my relationship with him. It goes back to a childhood of playing baseball, wiffle ball, stick ball. Going to Oriole games. Watching Brooks Robinson. Having season tickets for the Orioles. Then ultimately in adolescence getting to know some of the players, because my dad (Ron) became an agent.

Having those guys in my house after being a fan for 13 years. All of a sudden Brooks Robinson, Eddie Murray, Jim Palmer and Rick Dempsey are in my house. Which was incredibly bizarre, but, obviously, an incredible opportunity. And set standards for me too. Being around those guys.

I would say without a doubt, my love for the game, my appreciation for the game, my passion for the game stems from my relationship with my dad.

Usually for every person baseball is something that has been handed down. It’s not usually organic. There’s usually a sibling, a parent, a grandparent, an aunt or an uncle, somebody has usually handed down that love of the game. Baseball is usually generational.

Q: I think everyone remembers going to the game with their Dad.

A: It’s not something where you just turn the TV on and gain an appreciation for the game of baseball. That feeling you’ve got for the game is tied to someone in your life. That’s pretty unique. And I love that. I love that about the game of baseball, that it is generational, that there are usually some memories where that parent or grandparent can talk about players of two or three generations ago and compare them to today’s players. When you watch the tape of those players, it’s the same game. The uniform fabric’s different, but they are largely the same size players playing the same game. You look at the footage of Willie Mays and he’s playing the same game as Matt Kemp’s playing. It’s kind of cool.

Q: I remember my dad used to tell us, “You think people are good center fielders now, you should have seen Tris Speaker play.”

A: That’s a great conversation to have. Then to sit back and look at Tris Speaker’s stats . . .

Q: They are pretty amazing.

A: Yeah. I think there’s that historical context. I’m a history major, so I love the history as well.

Baseball is more subtle. It takes an understanding to have that appreciation, to have that connection. You can go and just experience it, but you’re not bludgeoned by it. It’s not in your face. It’s not made for television. It’s a game that you have to appreciate the strategy. It’s somewhat intellectual at times.

But it’s also having that unique facet of having an individual confrontation within a team concept. To succeed you have to be able to handle the individual, like in tennis or golf. But it also has a team concept that’s important to the ultimate success. So you’ve got both the individual confrontation that’s key to being a successful player, but you also have to construct a team and develop a team to ultimately outperform the sum of individuals.

Q: Brooks Robinson your favorite growing up? Cal Ripken?

A: Cal came along as I was already on my way. So Brooks was clearly the guy that probably stood out for me. I loved Gary Carter because I was a catcher early on.

Q: Really? You seem tall for a catcher.

A: I didn’t catch for very long. I moved. I was also big. I was 270 pounds, so I played first base after a while. Obviously, I loved Eddie Murray, too.

Q: This may be a stretch. Does the inherent difficulty of the system, the financial system of baseball, affect your thinking about the game?

A: No. It affects my thinking about our business, but not about the game.

Q: How does it affect your thinking?

A: It creates a challenge that’s significant. It creates a leadership challenge for me to ensure that it doesn’t become an excuse. And it necessitates the constant need for balance between understanding the magnitude of that challenge and what it means for all of our operations and our systems and our planning, but never letting it become a crutch for why we shouldn’t be successful.

Q: Is there a perception problem in town?

A: The biggest perception issue is probably the simplest one, which is we’re still to some extent always viewed in the backdrop of those ‘90s teams, when in reality that was a completely different business model. Those (Indians) teams were literally the Red Sox, the Cubs, the Dodgers. We were top five in payroll, as high as three. And our revenues generated that.

So I think there’s that general public sentiment that, ‘Hey if you win enough people will come.’ But that’s not necessarily true. We had a unique set of circumstances.

There was a new ballpark. That’s a huge multiplier. We hadn’t won in 40 years. That’s a multiplier. There was no football team in town. That magnified our revenues. The one that gets overlooked a lot is the industry was coming off a strike, so all of our revenues were amplified because all the other teams’ revenues were significantly tamped down at that point. So ours were amplified. Our spending power was amplified on the free agent market. And the city was economically in a better place. There were four Fortune 500 companies that were here that are no longer here.

So all those things are factors that we had a different set of operating conditions and circumstances and we had a different set of revenues and we made decisions differently. We built teams differently than we do now. So to compare the two is a challenge for us.

But it’s a reality, so I think at this point it’s not something we want to run from. We want to embrace it as part of our heritage and part of our history. And I think you’ve seen that in what we’ve done here.

Q: That was a decade and a half ago, really. Fifteen years. Do you think people, the general populace still judges in those terms?

A: I think it frames that very guttural reaction, like, “Hey, if you win it’s already been shown people will come.” That’s what you hear all the time.

Q: Do you believe that?

A: I think more people will come. But the challenge is 2.2 million instead of 1.6 million doesn’t change the way we operate. Even that extra 500,000, 600,000 people, even if that’s $10-to-15 more million in revenue a year . . . one win in free agency is $9 million. So you’re not going to change the context. Again, I don’t think people want to intellectualize baseball, and I don’t believe you should have to intellectualize baseball . . . and we’ve made a conscious decision in most of our interviews not to get into these topics and just stay positive and talk about what our aspirations are.

But that revenue swing between 1.5 million in attendance and 2.2 million in attendance . . . meaningful dollars but not dollars that will have us plan dramatically different.

Q: It wouldn’t change the amount of money spent?

A: It would change the amount of spent to 15 million dollars a year. What does that buy you in free agency? Very little. One and a half wins.

Q: How is that figure determined?

A: Our analysts can put a value on what it costs in free agency to sign a player and what that means in Wins Above Replacement and what those players end up costing in free agency and that changes every year. They measure all the players signed in free agency and what their history has been and what they offer going forward and they place a value. The challenge in free agency is you’re often paying for that in the first year of a contract, and in the out years of a contract the players WAR usually goes down because he’s usually past his prime. So it becomes a less efficient contract over time. That’s why free agency is never the best way to build. It’s a good way to supplement but not build.

Q: So $8 million for one win?

A: It’s $9 (million) now. It was $8 (million) two yeas ago. I think at the end of this year they figured out it was nine. And when those wins come in the win curve are important. What does that win mean if it’s the difference between 80 and 81? Very little. But if that win’s the difference between 89 and 90, that could be a meaningful win.

Q: Aren’t there certain players though that could be worth more than that? The right guy and the right fit could mean more than that?

A: I think there are certain players at certain positions that might be able to leverage impact on other players. Like a catcher for sure. Maybe a leadership component. More than stats alone. We factor those things in. There are certain subjective roles to what certain guys bring to the table beyond just the objective analysis of ‘this is what their added value is.’

But you have to find some way to place a value on what guys bring to the table. We don’t use those conventional stats. We use our own methodology. It does factor subjective and scouting information and makeup and personality and character and all those things in. In the end you’re adding up and trying to determine how many wins that player impacts when you bring him on board. That’s what you’re trying to figure out.

Q: So at some point you all sit back and say this is what this player could mean in terms of wins.

A: Yeah. Either runs created or runs prevented. Ultimately you’re trying to impact those two areas of the team. The position player can impact both those areas, and sometimes the runs created gets looked at disproportionally to the runs prevented. And sometimes the sum of the guy’s value in offensive performance is undermined by some of his defensive value.

Q: This is the hot guy and the topic now, so I’ll admit that. But a guy like (Josh) Willingham. Did he over-perform what you expected?

A: Yeah, he had the best year of his career, so he over-performed what anyone expected him to do this year (2012).

Q: You couldn’t know because it was a unique year, but had you guessed that would you have been more willing to . . .

A: Well we offered him more than he signed for. We just didn’t offer three years.

Q: And what was the thinking in not offering the three years?

A: Just our adversity to risk, probably. Our understanding of what a poor performing contract can do to our ability to operate and maneuver.

Q: You are always hammered, constantly, about the budget and not spending money, there’s no left fielder for years, there’s no first baseman. Bottom line, what can you say about that?

A: That it is what it is and we focus on what we can control. On my side, I’m focusing on both trying increase revenues every way we can and trying to ensure that every facet of the experience here over-exceeds expectations that people have, whether it be from the time they walk in to the ticket taker to the ushers to the scoreboard experience to the in-park entertainment to our promotions. That when people come in here, the experience they have at the ballpark here separate to the field, is one that exceeds the expectations. On the baseball side that we continue to learn, continue to get better, continue to improve, and we with a sense of urgency look to build a winning team with the resources we have.

Q: Does the Forbes financial information frustrate you?

A: No. They’re taking an educated guess with part of the information, and they’re going to be partially right. In our case, the case of the Padres, they’re not right. They don’t have it right. They don’t have all the information and they’re trying to piece it together. That’s the simplest answer to that. I think most people actually understand that.

Q: It seems to feed a perception though.

A: I don’t think the bigger perception here is that we’re hiding something. I think the bigger perception is that we’ve got challenges. The one thing that I do feel terrible about for our owners, and is unfair, is that our owners have spent at revenue or beyond revenue. And the few times they’ve made a profit they’ve put the money right back into the club the entire time they’ve owned the team. Our challenge has been amount of revenue, not whether they spent it or not. The model I think sometimes is asked of them, to deficit spend $20, $30, $40 million to get us into the average payrolls, there is no model of that beyond one team in all of baseball (Detroit). I’m not sure owners are out there that do that, that are willing to lose. The Yankees don’t do that, the Red Sox don’t do that, the Cubs don’t do that. They’re not losing $30 or $40 million a year.

Q: When the Indians lose money, do the owners have to make that up?

A: Yea. It comes out of pocket. Obviously sports business are not conventional business in a lot of different ways, but still . . . not many people are willing to incur huge losses year after year.

Q: Are you satisfied with the way player evaluation has gone, for the past five years, let’s say. Are you satisfied with the way player evaluation has gone, for the past five years, let’s say. A: You know, the context for evaluating those things is very difficult. It’s very hard to do in one moment in time. You’ve almost got to take a business look. And you can’t ask that question so broadly. For example, I think the last three years, our drafts based on the expected value of our picks have been very good. The prior five to six years before that, certainly we did not have good drafts. And we’re suffering for that now to some extent. Yet you evaluate our trades compared to other trades, we were very successful in our trades. Among the more successful teams. Internationally we’ve done well. We need to do very well on every side of player acquisition. We can’t do well in two out of three. I think we’ve made adjustments to the way we draft, the way we strategize. And I think we’ve had more successful drafts the last three years. If our drafts continue to be as successful and productive and we get players from those drafts playing in the big leagues as quick as the guys we have right now contributing, and we continue to do that, then we’ll be in much better shape going forward. Q: You mentioned trades. There are two big ones obviously in the last few years, CC (Sabathia) and Cliff (Lee), that did not seem to bring a great return. A: CC brought a much better return than if we had let him go to free agency. And the fact that we’ve got one player who’s a core player on our team (Michael Brantley) contributing from that and another guy (Matt LaPorta) who’s been obviously somewhat of a disappointment, that’s better than a lot of trades. Again, give me the context. Give me another trade. What did (the Twins) get for Johan Santana? You’ve got to ask instead of just criticizing a trade at any one moment in time. You’ve got to have a context for saying what should we have gotten? What were the alternatives? There is a reality that when you trade for players you should be better than when you draft because you’re going to have more information on a guy. But still you’re not going to hit on everything. Q: What did Milwaukee get for losing CC? A: We’d have to look, but they didn’t even get a first round pick They got a B compensation pick. Because the Yankees signed him. They got a compensation pick and that was it. Q: You’ve never seemed like one to look back much, but do you ever wonder whether, “We could have ridden him out for the year (2008) and seen what happened?” A: With CC? No. He wasn’t going to sign here. We fully flushed out whether we had the capability to sign him. Q: More from the point to keep him and see if you get back to the playoffs? Ride it out? A: No, at that point we pretty much knew where our team was at that period in time. You have to make those judgments at any juncture in time. The more interesting time if you want to ask that might be to go back to 2002 and say, ‘What if we hadn’t traded (Bartolo) Colon and (Chuck) Finley? How good could we have gotten in the second half.’

The bigger question is . . . and it’s where the GM’s job is such a challenge, because you have to have one eye on that moment and one eye on the future. And we were headed toward a cliff that was extremely alarming, with no path out.