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General Manager Newsbeat

Wednesday, June 11, 2014

Why A Great General Manager Might Be Worth More Than Mike Trout

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.

RoyalsRetro (AG#1F) Posted: June 11, 2014 at 01:32 PM | 34 comment(s)
  Beats: billy beane, general manager

 

 

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