Billy Beane Newsbeat
Thursday, July 24, 2014
Billy Beane should have never written this article.
Now that we have a sense of Beane’s performance and how much it would cost to replicate it, let’s turn back to the Boston Red Sox and their failure to sign him (or even to offer him anywhere near his worth)....
But some of that money was spent and some of those wins came before the Red Sox attempted to hire Beane. To be conservative, let’s just look at the period since Henry made Beane his offer: In the last 12 years, the Red Sox spent $1.714 billion on payroll, while the A’s spent $736 million. We can then break down what it could have looked like if Beane had worked for the Red Sox like so:
Let’s say it would have cost Boston the same $736 million that it cost Oakland to get the A’s performance with Beane.
At the hypothetical $25 million-per-year salary I suggested earlier, Beane would have cost the Red Sox another $300 million. (It’s possible that Beane would have wanted more, but it’s even more possible that they could have gotten him for less.)
The difference in performance between the A’s and the Red Sox over that period (where the Sox were as successful as at any point in the franchise’s history, and the A’s were supposedly stagnating after Beane’s early success) has been about 50 games for Boston. Since we don’t know exactly how good Beane would be at procuring additional wins above his Oakland performance, let’s assume that the Red Sox would have had to pay the typical amount teams have paid for wins in the period to make up the difference. According to the year-by-year price of wins from my calculations above, those 50 wins (taking when they happened into account) would have a market value of about $370 million (though this might have been lower with Beane in charge).
If we combine these — the price of the A’s performance ($736 million) plus Super-Expensive-Billy-Beane’s salary ($300 million) plus the additional 50 Red Sox wins at high market estimates ($370 million) – merely duplicating their previous level of success still would have saved the Red Sox more than $300 million relative to what they actually spent, and that’s with reasonably conservative assumptions. That’s money they could have pocketed, or spent making themselves even better.
Tuesday, July 08, 2014
Having advanced performance data at even the most junior levels will make it less likely that players get filtered out based on 60-yard-dash times or radar-gun readings, and more likely that they advance on the merits of practiced skills. The ability to “paint the corners” of the strike zone, to swing only at pitches within that zone, and to manage the subtle footwork required of a difficult fielding play is accessible to any player willing to commit to the “10,000 Hour Rule” (the average amount of practice Malcolm Gladwell, in his book “Outliers,” says is needed to excel in selected fields). A whole new class of players whose skill sets previously were not fully appreciated will be able to reach the highest levels thanks to a more nuanced understanding of their abilities.
The current modus operandi of building rosters to maximize the sum of individual talent also will be challenged; data compiled using new technologies will enable management to assemble players in new ways, emphasizing their ability to complement one another. Whereas current metrics describe players’ performance in isolation, front offices will increasingly rely on statistics that measure a player’s value in the context of the rest of the team, picking up externalities such as how a player’s defensive abilities may compensate for the deficiencies of those playing around him.
In a new twist to the “old school vs. new school” debate in sports, technology-based roster-building and algorithm-driven decision-making thus will be the strongest propagators of the traditional virtues of teamwork and chemistry. (I should note here that these opinions are my own—and not those of my club, the Oakland Athletics, or Major League Baseball.)
Technology will create an equally drastic shift in front offices. Aspirants to the front office already are just one click away from decision makers, thanks to social media. It is not uncommon for a blogger’s analysis post to show up in a general manager’s Twitter feed—a level of proximity and access unheard of a decade ago. Many sports franchises are already hiring analysts based on their work in the public sphere; as social media become more targeted and efficient, the line between the “outsiders” and “insiders” will narrow.
Wednesday, June 11, 2014
Billy Beane should have never written this Deadspin article.
The random effects model for free agent signings estimates that a single standard deviation of player-investing ability corresponds to a 40-percent difference in a team’s return on free agent investments. I calculate that the average team spent $47 million on players working under contracts they signed as free agents or extensions signed after landing free agent contracts in 2013. Forty percent of $47 million is just under $19 million in surplus value, so at $7 million per win, an additional standard deviation of free agent-investing ability at the GM level leads to the equivalent of 2.7 extra wins per team per year to the average team. (Of course, a new GM cannot completely overhaul his or her roster immediately. These numbers can be interpreted as either the annual added value a GM would provide once he or she has been in place long enough to fully shape the roster, or as the total non-discounted long-term value added from player transactions per year on the job.)...
My best estimate for the value of a single standard deviation of player-investing ability at the GM level is $53 million a year. The market says the maximum value of the head of baseball operations department is less than $4 million a year. Unless I’m way, way off, there’s a massive inefficiency in the market for elite general managers waiting to be taken advantage of.
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