Alex Anthopoulos began his baseball career with the Montreal Expos organization, where he worked for three years. The Montreal native moved to the Blue Jays in 2003, where he took over as scouting coordinator. Two years later, he earned a promotion to assistant general manager, then vice president of baseball operations.

Finally at the end of the 2009 season, Anthopoulos took over the big chair, becoming one of the youngest GMs in the game at age 32. Armed with a scouting background, he’s vowed to try and outscout the competition, and building a Blue Jays team that can contend over the long haul.

Just ahead of the Winter Meetings, I talked to Anthopoulos about the challenges of competing in the toughest division in baseball, the little (and big) moves the Jays can make to get back on top, and the sleeping giant potential of North America’s fifth-biggest market.

Jonah Keri: Are there any lessons the Jays can draw from the Expos’ failure, on the field or off?

Alex Anthopoulos: There are lessons we can draw from their success. You look at the people in that front office over the year, how so many of them spun off to do good things, how they developed really good baseball executives. From a baseball standpoint, they were one of the models used in scouting and player development. The failures were really the financial component. But you can’t argue with the quality of the product and how well the team played.

As a Montrealer I do believe that with a new stadium, it would have worked. Look at the Alouettes. They played in the Big O, didn’t draw flies. They move to an outdoor stadium and have great success. Montrealers love being outside, relaxing, having a beer, enjoying the city. There’s a tremendous passion for sports.

When I left, we were tied with the Marlins for the wild card that last year, in late 2003. There was excitement in the city, we were drawing 30,000-plus, and that’s after everything the team had been through, all the rumors of them moving away. People were dying for a winner, it was loud and exciting. Why couldn’t the Expos have been the Minnesota Twins? Or the Mariners after the Kingdome?

Keri: The 2010 Forbes franchise rankings had the Jays 26th in franchise value, and 25th in revenue. That’s despite playing in the fifth most populous city in North America. Has Rogers given you a mandate to run the team as if it’s a small-market club, or do you see opportunity to become something bigger?

Anthopoulos: There’s a huge opportunity here. Due respect to Montreal, but the greater Toronto area has something like 7 million people, and Rogers Communications is probably the wealthiest owner in MLB. They have huge synergies when you consider all of Rogers’ media properties, coast to coast.

People talk about what the Indians did in the past, growing their product and drawing 3 million fans. 3 million is a great achievement, but don’t forget, Toronto once drew 4 million. Of course Toronto is a market where you need to have a winning team. It’s not like with the Cubs where fans just show up. The window for other markets is limited, because there’s only so much upside for payroll. For us, if we can build the foundation of a great team, payroll, attendance and revenue can all climb together. The upside here is massive.

Keri: So where would that leave you in terms of payroll? No one’s going to match the Yankees, but could the Jays be on par with teams at that next tier down?

Anthopoulos: We all understand, and it starts with ownership, that we are a large market. We got away from that, we forgot how large the market was. This is a massive market with massive upside. The fan base is certainly there, they’ve shown it in the past. It’s on us to put a great product on the field that can be good for years, not a quick fix for the short term. If we can do that…not New York, but Chicago, Anaheim, Seattle? We absolutely have the upside to be there.

Keri: The question, like you said, is when to ramp up. The Tigers lost 119 games in 2003. The next off-season, they threw substantial dollars at veterans like Pudge Rodriguez and Rondell White, even though they obviously weren’t going anywhere in ’04. But two years after that, Pudge is the starting catcher on a World Series team. Is that part of the plan, to sign veteran players to decent-sized deals, even if you feel you’re not quite ready to contend, and hope to benefit the way the Tigers did?

Anthopoulos: There’s lot of merit to that approach, a lot of value. Of course the question is always, what’s the expense, how many years. We signed some veterans to short-term deals last year, guys like Alex Gonzalez and John Buck. Gonzalez was one year plus an option, giving us a starting shortstop in a thin market for that position. Buck was a one-year deal, so we could see what would happen to J.P. Arencibia. So yes, we would look at it–we have looked at it. It’s just a matter of finding the right player.

Keri: With Gonzalez it seems to have worked out perfectly: You signed him at an affordable price, he put up nice numbers, the Braves got fed up with their shortstop, and suddenly you add a player who’s six years younger. Is that part of the rationale, hope to catch lightning in a bottle with a 30-something veteran, then flip him for prospects or young major league talent as soon as you can?

Anthopoulos: If it’s young players who are just average or fringe-average, that doesn’t make sense. Because of the division we play in, the teams they put together, we need to get as much upside as we can. There’s a risk component involved, that’s part of it. But we’d rather shoot high and miss.

If we were in a different division, our strategy could probably be tweaked. But the win totals required to get into the playoffs in the AL East, they’re 95 and above. You can build a very good team, and we have. Gord Ash had a team with 88 wins, J.P. had 87 wins. We had one year where we were number one in ERA in both the rotation and bullpen, but that still wasn’t enough. You certainly can get into the playoffs with 88 wins elsewhere. In this division, you need to be that much better.

Keri: Another benefit to acquiring veterans is if you get one who’s coming up on free agency, you stand to gain compensation draft picks. Last month you traded for Miguel Olivo, kept him for a few hours, bought him out for $500,000, and now you’ll get a comp pick as a result. Is this the type of move we should expect more of from you in the future?

Anthopoulos: With Olivo, we had John Buck as a free agent, and it was clear last off-season that catcher and shortstop were two positions we wanted to solidify. We had the opportunity to acquire Olivo for a short period of time. That gave us the right to negotiate with the player, being the only team who could communicate with him. He had a pretty attractive club option at $2.5 million too. The acquisition cost made it a no-brainer.

It’s the same thing with acquiring someone just before the non-tender deadline, you get that exclusive window. We considered whether we should we pick up the option, sign him to a new deal, potentially decline, potentially secure a draft pick. The flexibility to do all those things made the move make sense.

Keri: If you are going to run the team on a small budget, you would seem to have a blueprint to follow in the Rays, a team that won the AL East twice in three years, despite playing with a payroll a fraction the size of Boston’s and New York’s. What lessons can you draw from the Rays’ success?

Anthopoulos: Pffft. Where do I start? What they’ve done with the resources they had. It’s been said that they finished in last place, and piled up top draft picks. Some players came from there, sure. But the number of smart trades and good moves they made really showed how they could recognize value. They are absolutely one of the best-run franchises in baseball, arguably the best-run franchise. It hasn’t been a fluke or a flash in the pan. Scouting, player development, they plan well, they were built well, they have an identity. I think it all speaks for itself.

Keri: You’ve talked a lot about trying to outscout the competition. On a percentage basis, how much bigger would you say your scouting staff is now than it used to be?

Anthopoulos: We expanded it quite a bit, but part of that’s because it was low. We added a lot to the pro side. We just felt we needed more looks. We felt we were a little understaffed.

Keri: Is there a proven, objective way to evaluate the quality of a scout?

Anthopoulos: Well the best way is to see whether they were right or wrong in their reports. I don’t think you can do it in real time, though, everything is hindsight. Like with a scouting director. To rate and evaluate your draft that same year, you just can’t do it. You need to let time pass.

Keri: What did you see in Brandon Morrow that you liked when you traded for him? For all of his talent, he had plenty of flaws at the time too, especially struggling with command. Was this move along the lines of what you mentioned before, go after high-upside players with flaws, trade a veteran who’s not part of your long-term plans like Brandon League, and hope to hit the lottery like you may have with Morrow?

Anthopoulos: It was League and also Johermyn Chavez–he was ultimately the player that got the deal done. League and Morrow had been talked about. With Chavez, we were reluctant to part with him, but that was the chance we were willing to take.

But yes, you don’t get players [like Morrow] when they’re performing at their peak. You have to take a chance that they will improve after you acquire them, so you look for the right timing. You’ll make quite a few mistakes. But hopefully you’re right more than you’re wrong.

Keri: While doing my reporting for The Extra 2%, I asked [Baltimore Orioles president of baseball operations] Andy MacPhail about strategies for competing in the AL East against teams like the Yankees and Red Sox. One thing he said was so blunt, it really surprised me. He said free agent starting pitchers just will not sign with an AL East team that’s not New York or Boston. Do you buy that?

Anthopoulos: What I would say is a starting pitcher would not come to the AL East at comparable dollars. I’m a big, “How can we?” guy. I don’t believe in absolutes, that you can’t do this or that. Everybody has a price, the question is do you want to pay that price. If it comes down to straight market value of a player, a lot of players may elect to go elsewhere. With the Yankees and Red Sox, they may just outbid other clubs, like the Yankees did with Sabathia, and other clubs don’t have the financial wherewithal to beat their bid. If an elite starter is coming into the AL East, those clubs can go more dollars and years, it’s just a matter of if they choose to do that.

I am not deterred by financial statements, though. I’m more deterred by the brains of every other GM in this division. They have all won. They’ve all won division titles, they have all been to the World Series, they’re all incredibly bright. That’s much more challenging. In business, is it the company or the leadership of a company that matters most? Most people would say it’s the leadership. As much as you look at the front of the jersey, it’s who’s making the decisions that can make or break a team.

Competing with those GMs, that’s the daunting challenge. Many teams have proven that they can win while spending less money, strictly due to the management of the club. Put these four GMs in another division–taking nothing away from other GMs in the game–but put these four in another division and I’d say that becomes of the harder divisions as well. It’s compounded by resources, sure. But that doesn’t concern me nearly as much as the intelligence of these guys.

Keri: The Jays hit 257 home runs last season, the most by any team in five years. How did that happen?

Anthopoulos: We thought we would be a team, with the track record of the players we had, we thought we’d potentially have seven players with 20-plus home runs. That we would not be up there in on-base percentage, but slugging percentage and home runs were going to be significant. Did we expect to hit that high a total? No. But we thought we’d hit a lot.

Keri: This wasn’t park effects or anything like that, was it?

Anthopoulos: No, not park effects. Two, three years ago, our slugging wasn’t good at all. We had that year where we led baseball in starters’ and bullpen ERA. But this team was different. Encarnacion had hit 26 in a season, Buck had 8 in just 186 at-bats the year before. Bautista…well, we certainly didn’t expect him to hit as many as he did, but he’d shown power, look at the September prior. Wells and Lind had hit 30, Hill had 30, Overbay 20, Gonzalez 23. Guys like Bautista exceeded expectations by a lot. But guys like Fred Lewis didn’t hit a lot more than in the past. We pitched well also. This was just how our team was built.

Keri: Finally, and let’s face it, most importantly…best souvlaki in Montreal?

Anthopoulos: Village Grec, it’s a small place on Jean-Talon. Definitely the best.

Jonah Keri has covered baseball for too many publications to count, including Bloomberg Sports, the Wall Street Journal and His new book, The Extra 2%: How Wall Street Strategies Took a Major League Baseball Team from Worst to First (ESPN Books/Ballantine), covers the Tampa Bay Rays, their journey from cellar dwellers to pennant winners, and the Wall Street methods they used to get there. The book drops in March 2011, and you can pre-order “The Extra 2%” right now. Follow Jonah on Twitter @jonahkeri, and check out The Jonah Keri Podcast.