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Jim Furtado
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Economics Newsbeat

Friday, February 23, 2018

SABR announces 2018 Henry Chadwick Award recipients

SABR is pleased to announce the 2018 recipients of the Henry Chadwick Award, established to honor the game’s great researchers—historians, statisticians, annalists, and archivists—for their invaluable contributions to making baseball the game that links America’s present with its past. 
The 2018 recipients of the Henry Chadwick Award are: Jefferson Burdick, Bob McConnell, Tom Shieber, Andrew Zimbalist.

Mike Webber Posted: February 23, 2018 at 10:07 AM | 1 comment(s)
  Beats: baseball cards, chadwick award, economics, research, sabr

Wednesday, February 21, 2018

Baseball’s Economics Aren’t As Skewed As They Seem - The Ringer

Don’t have time to read right now but it looks interesting.

What Explains Labor’s Declining Share of Revenue in Major League Baseball? by J.C. Bradbury.

Jim Furtado Posted: February 21, 2018 at 03:21 PM | 7 comment(s)
  Beats: cba, economics

Monday, January 29, 2018

Inside Baseball | Will Big Moves Thursday Spark Slow Market?

Heyman with a pretty good break down.

One thing he didn’t note, teams are paying more for relievers. If starters aren’t pitching as many innings it makes sense to reapportion where they are spending money. Of course, relievers aren’t complaining about this shift.

Jim Furtado Posted: January 29, 2018 at 04:46 PM | 6 comment(s)
  Beats: economics, free agency

Saturday, January 20, 2018

Inside Baseball | Scott Boras Weighs In On Slow Market

Boras has an expensive computer. OK, then, I’m convinced.

Boras doesn’t ever mention the “C” word but rather says there has to be some sort of “interference” that’s caused the market to halt. He speculates it’s about the analytically-driven, like-minded decision-makers who are using numbers to suggest that the longer deals for older players aren’t working. To that, Boras says, come see my computer. He has a very expensive one, and human computers on a near-100-person staff that suggest otherwise.

According to Boras, players who signed a six-year deal from 1998-2013 have averaged nearly 3.0 WAR per year (2.98), while players who signed three- or four-year deals from 2009-15 have averaged less than half that – 1.4 WAR. The players who signed the long deals also have averaged an .845 OPS while the position players on shorter-term deals have averaged a .750 OPS. Slightly different years were used, but you have to go back a little longer on six-year deals since you need longer lengths to get fair averages, and he’s including some non-free agents, which means a few long-term guys in his research were a bit younger (Joey Votto, for example). However, Boras has numbers that suggest over-30 players are still key contributors, as well.

Jim Furtado Posted: January 20, 2018 at 07:50 AM | 25 comment(s)
  Beats: economics, scott boras

Friday, January 19, 2018

The 2017-18 Offseason: Trend or Anomaly? - MLB Trade Rumors

There is a lot of misinformation and baseless conjecture out there from people trying to figure out the current market. This includes MLB personnel. Last night I was more than surprised to hear MLB Radio Network’s @CaseyStern saying MLB is blatantly colluding to keep free agent salaries down. Don’t get me wrong. I wasn’t completely surprised; he says a lot of stupid stuff. To hear an announcer, who is essentially employed by MLB, making the case for collusion so strongly did keep me listening to his show a few more minutes than I normally do. (I usually immediately change the channel when I hear his voice.)

Still, is there legitimacy to teams wanting to dip beneath the line? If so, what does that tell us? Passan says that limboing under the luxury tax for one year and then jumping back to a $246MM payroll would save the Yankees and Dodgers “only $12 million in luxury-tax penalties.” But his approach — simply comparing the hypothetical 2019 tax rate between scenarios in which these organizations do or do not end up over the luxury line in the prior year — seemingly ignores a few other factors. Since the tax rate rises with each consecutive year in which the line is passed, there’s more than one future season of payroll to consider. Plus, the new CBA includes a surcharge on exceeding the tax by more than $20MM (12%) and exceeding it by $40MM or more (a whopping 42.5% plus a loss of ten places in the first-round draft order; 45% on the second consecutive time). As’s Buster Olney notes on Twitter, the Dodgers and Yankees “might have a $100+ [million] incentive to get under” for one year, all things considered.

Jim Furtado Posted: January 19, 2018 at 06:39 AM | 12 comment(s)
  Beats: economics

Thursday, January 18, 2018

The Current MLB Free Agent Market - Perception vs Reality? | Jays From The Couch

A very interesting take on 2018 free agency.

Remember last year when the market for power bats collapsed and shocked many – including the Blue Jays front office? That was preceded by a couple of years where “lower quality” aging veterans had already been relegated to 1 year deals or even minor league contracts. Last winter it was more middle of the road players which were hit hard, and higher quality players like Edwin Encarnacion and Jose Bautista were impacted. The contract Jay Bruce just signed (3 years and $39 million) continues this trend. Remember in early November when Jay Bruce’s agent appeared to be “demanding” 5 years and $80-$90 million? Kind of like a real estate agent setting the price of a home based upon recent comps regardless of where the market has actually moved. The result of such a mis-judgement of a market? Inventories pile up until prices drop to the point where the market clears, and/or sellers begin to panic and start making the dreaded “bid wanted” calls.

In financial markets, there are times when liquidity literally evaporates. There are legendary stories from the crashes of 1906, 1929, 1987 and even the relatively recent global financial crisis in 2008. Owners of assets need to sell due to financial obligations and/or panic, and there is a rush of people in search for buyers and liquidity. By definition, by the end of a long bull market, most market participants are already similarly extended and not in positions of strength to offer the required liquidity. This is a particular problem when asset prices are driven to levels well above actual value, as the combination of overvalued assets and low liquidity, means that prices can drop rapidly – like from the 5 years and $150 million that Bautista reportedly demanded prior to the 2016 season, to the 1 year $19 million deal he ended up with. There have been times when an asset owner makes a call to get a price on their asset (think mortgage bonds in 2008) and the price quoted is 50% below the last trade, or literally no one picks up the phone on the other side!

Jim Furtado Posted: January 18, 2018 at 08:36 AM | 12 comment(s)
  Beats: economics, free agents

Wednesday, January 17, 2018

Rubbing Mud: The Evidence of Price Fixing We Have So Far - Baseball Prospectus

Time to get out the Reynolds Wrap.

Now we’re getting into something more sinister, even if it’s not something actionable. If there’s a kind of slotting system developing (however implicit it might be), then the owners are distorting the salary structure of the game, using their advancements in analytic intelligence and the new Collective Bargaining Agreement as cover. If good players with widely disparate skill sets and likely aging profiles are taking their talent to the market and finding an eerily similar, lower-than-expected amount of money waiting for them, something bad is going on.

By the time spring training games begin, this could all be behind us. It’s possible (and perhaps this should be highlighted more often) that owners are anticipating the $50 million windfall each will receive sometime in the next 90 days (thanks to the league’s sale of MLB Advanced Media, to Disney) and would prefer not to make their major expenditures until that money pours in. Maybe the Scott Boras effect is stronger than we think. (I already think it’s quite strong, and a better explanation for the state of the market than is generally understood.) If we look around this summer and find that the market never heated up, though, and that the cost of a win on the free agent market has significantly sagged, remember these similar deals and offers and consider that the evidence of price fixing (even if it be passive price fixing) might be stronger than we think.

The longer this lasts doesn’t prove anything. If I’m Dave Dombrowski and J.D. Martinez hasn’t signed, why would I increase my offer? If it’s me, it just reinforces my belief that I don’t have to exceed my comfort level. This goes for every other team as well. It’s a new trend; it doesn’t have to be planned or coordinated.

Jim Furtado Posted: January 17, 2018 at 11:44 AM | 24 comment(s)
  Beats: economics, free agents

Tuesday, January 16, 2018

Are Teams “Buying the Dip” in the Relief Market? | FanGraphs Baseball

Starters are pitching less innings so relievers are pitching more. It makes sense teams would shift money from starters to relievers. At the same time, though, individual relievers are also pitching less innings. What this should mean is, teams increase reliever salaries. Eventually top pays for reliever salaries stagnate (expect for the very, very best) as teams spread the money over more relievers.

Jim Furtado Posted: January 16, 2018 at 07:03 PM | 3 comment(s)
  Beats: economics

Here’s why baseball’s economic system might be broken

You would if the baker waited so long hoping for a better price of flour while the distributor sold out its stock to other bakeries.

“I wouldn’t blame the baker if the flour doesn’t show up,” Boras told Yahoo Sports.

Jim Furtado Posted: January 16, 2018 at 06:40 PM | 67 comment(s)
  Beats: economics

Wednesday, December 20, 2017

Dodgers are in even better position to get Bryce Harper after Matt Kemp trade

Jeff Passan digs into the CBT.

Jim Furtado Posted: December 20, 2017 at 07:05 AM | 1 comment(s)
  Beats: cba, cbt, dodgers, economics

Saturday, December 02, 2017

MLB Players Ought to Fight for a Payroll Floor | FanGraphs Baseball

Will players support a system where their top salaries are effectively capped?

Scott Boras said during the 2015 offseason that revenues had dropped to 43% when including MLBAM revenue — about a 10-point difference from MLB’s numbers. Boras knows how efficiently teams are being run, as he has developed a practice in recent years of doing an end-around of front offices and appealing directly to ownership.

Disputes between millionaires and billionaires typically don’t engender much sympathy from the public at large, but when it involves a public institution, like Major League Baseball, it should have our attention, because there is perhaps a growing threat to labor peace.

Jim Furtado Posted: December 02, 2017 at 07:00 AM | 9 comment(s)
  Beats: cba, economics

Friday, November 24, 2017

MLB Sets Record For Revenues In 2017, Increasing More Than $500 Million Since 2015

Major League Baseball continues to hit home runs on the business side. According to sources at the league, 2017 marks the 15th consecutive year MLB has seen record gross revenues, surpassing the $10 billion mark for the first time. By comparison, the league saw revenues approaching $9.5 billion at the end of the 2015 season.

Jim Furtado Posted: November 24, 2017 at 07:54 AM | 21 comment(s)
  Beats: economics




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