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Saturday, January 21, 2012

SI.com: Economic considerations at heart of Carmona’s decision

An interesting analysis of signing ages, signing bonuses, and success rates in the Dominican Republic, by Melissa Segura of Sports Illustrated ...

Teams pay premiums for 16-year-olds for two primary reasons: One, because teams often want to be the first to sign a promising player and, thus, avoid bidding wars with other teams; and two, clubs prefer to develop their players’ skills under the watchful eyes of their own club personnel rather than under those of unqualified and unaffiliated coaches or trainers.

But are 18-year-old Latin American players really worth 70 percent less than their 16-year-old counterparts? Here’s another data analysis that calls into question the industry practice of placing a premium on youth. Let’s assume the most basic marker of a successful signing is making it to the majors. We’ll make it simple and look at the 79 players who have made their major league debuts from 2008-2011 from Carmona’s Dominican Republic. Of those 79, only six were signed as 16-year-olds. The debuts suggest older players were more likely to advance to the majors. ...

[...]

What’s more, SI tracked down the bonus data for 60 of the 79 players. Fernando Martinez, signed by the Mets in 2005 for $1.3 million, was the only one to receive a seven-figure bonus. Only nine others signed for six figures and one — the Rockies’ Juan Nicasio — received nada to sign, according to the data obtained by SI. The median signing bonus among them tallied a paltry $35,000.

Joe Kehoskie Posted: January 21, 2012 at 05:09 AM | 16 comment(s) Login to Bookmark
  Tags: indians, international, mets, miami, minor leagues, rockies, scouting

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   1. Darren Posted: January 21, 2012 at 10:39 AM (#4041810)
Edited to remove a misreading.
   2. willcarrolldoesnotsuk Posted: January 21, 2012 at 11:16 AM (#4041815)
But are 18-year-old Latin American players really worth 70 percent less than their 16-year-old counterparts? Here’s another data analysis that calls into question the industry practice of placing a premium on youth. Let’s assume the most basic marker of a successful signing is making it to the majors. We’ll make it simple and look at the 79 players who have made their major league debuts from 2008-2011 from Carmona’s Dominican Republic. Of those 79, only six were signed as 16-year-olds. The debuts suggest older players were more likely to advance to the majors.
The data may suggest that, but the data as shown in the article doesn't. It needs to also show how many of each were signed.

For example, if ten 16 year olds and a thousand 18 year olds were signed, then the data would show the opposite of what's being claimed: A 16 year old is 60% likely to make it, while a 18 year old is less than 1% likely. Unfortunately the article doesn't appear to give the actual numbers.
   3. Karl from NY Posted: January 21, 2012 at 12:57 PM (#4041853)
But are 18-year-old Latin American players really worth 70 percent less than their 16-year-old counterparts?

Yes, thanks to a whoppingly obvious selection bias. If all the good players get signed at 16, of course the 18-year-olds will be worse.
   4. bobm Posted: January 21, 2012 at 02:43 PM (#4041920)
Was it right, if the allegations prove true, for Carmona to mislead the team into signing him in 2000 when they thought was 17? Of course not. Ethical? No way. But economically rational? Absolutely.


This is indeed an interesting discussion of the incentives to falsify one's age, but it is framed oddly: "Economic considerations at heart of Willie Sutton's decision to rob banks."

FTFA:

News of yet another Latin American player using false paperwork -- Marlins reliever Leo Nuñez was arrested last month for using a false identity -- broke just one day after Major League Baseball and the MLB Players Association announced that its joint international baseball committee would seek additional expert input from foreign baseball experts. One of the tasks the committee faces is the ever-growing list of players using fake identities in order to shave years off their ages, often at the expense and embarrassment of MLB clubs.


The identity falsification is only economically rational since the odds of getting caught seem low, as is the cost. Leo Nunez was paid over $6 million and Carmona over $15 million through 2011. Sure, their careers are likely over, but is either one going to have to forfeit any of his previous earnings?
   5. Walt Davis Posted: January 21, 2012 at 03:18 PM (#4041934)
Yes, thanks to a whoppingly obvious selection bias. If all the good players get signed at 16, of course the 18-year-olds will be worse.

But that's the point of the article -- the players signed at 16 aren't better. #2 makes the legit point that we need the rates to better judge the differences in making the majors and, obviously, making the majors is only one measure of success -- i.e. the article's implications might be totally wrong. But at least she's actually trying to empirically test the assumption that the best players are signed at 16 rather than assuming it.

It would be nice to have the data cleaned up and presented better but ... they found 5400 signings over 8 years (roughly 700 per year) and just 79 debuts over 4 years (roughly 20 per year). Not the same populations -- 2008 debuts were likely signed in 2001-2 -- but those rates are probably fairly stable. So a working guesstimate that for every 700 kids signed, 20 will make the majors.

I wonder if this article was rushed into "print" before being completed because of Carmona's arrest. This is an awful lot of digging for a one-page web post.
   6. this space for rent Posted: January 21, 2012 at 03:34 PM (#4041942)
Comparing the average success rates of 16-year-old signees and 18-year-old signees is utterly irrelevant to the quesiton of whether you would pay more for THE SAME PLAYER if you thought he were 16 instead of 18.

The answer to the latter question is obviously yes: for the same reason that age relative to league matters immensely in evaluating (at least hitting) prospects, signing a 16-year-old with a given set of attributes is far more appealing than signing an 18-year-old with the same set. Two more years of future development, especially two more teenage years, makes a huge difference.

[edit: typo]
   7. Zipperholes Posted: January 21, 2012 at 04:39 PM (#4041964)
But that's the point of the article -- the players signed at 16 aren't better. #2 makes the legit point that we need the rates to better judge the differences in making the majors and, obviously, making the majors is only one measure of success -- i.e. the article's implications might be totally wrong. But at least she's actually trying to empirically test the assumption that the best players are signed at 16 rather than assuming it.
But she's not trying to. Trying to test an assumption without data that is inherently necessary, e.g., studying the "likelihood" of a phenomenon with no reference to the total population size, is worthless.
   8. Joe Kehoskie Posted: January 21, 2012 at 04:56 PM (#4041972)
So a working guesstimate that for every 700 kids signed, 20 will make the majors.

The conventional wisdom has been that only about one out of every 15 to 20 players signed in the D.R. will even make it to the Rookie level in the U.S., so if one out of every 35 is making the ML, either the former ratio is wrong or the latter group has a great success rate.

Anyway, I've always wondered what the attrition rate would be if, e.g., Baseball America made a list of the top 50 16-year-olds in the U.S. in 2010 and then another list of the top 50 18-year-olds in 2012. I'd guess at least a third of the list would turn over due to players peaking early and being passed by better players; players getting injured; players pursuing another sport; etc.

The seemingly large number of Latin 16-year-olds who sign for huge money and then struggle to crack an organization's top 20 prospects list only a year or two later shows that baseball scouting remains a crapshoot. (Draft picks obviously have a high attrition rate, too, but it's big news if a team's R1 pick doesn't make the team's top 10 list the next year, let alone the top 20.) Interesting topic.
   9. The Ghost's Tryin' to Reason with Hurricane Season Posted: January 21, 2012 at 05:31 PM (#4041980)
I RTFA, started picking apart the data analysis in my head, then surmised that this thread, that I hadn't yet read, would contain ample critique of the issues with the piece. So I'll leave that gaping hole alone.

I'd like to see a list of other players who have been outed, along with their contract and bonus history. The one thing that I recall that surprised me in the couple cases I remember is that the team that got conned did not try to get out of the then-current contract with the player. Were I representing the MLB owners, I'd want some sort of clause in the standard player contract that mandated a monetary penalty for age fibs, though I have no proposal for how a figure should be determined.
   10. BDC Posted: January 21, 2012 at 06:09 PM (#4041989)
WRT to Carmona himself – given, obviously, that he should not have been breaking the law and should have to pay whatever penalties are in place – has he really cheated the Cleveland Indians out of anything? He did develop into a star pitcher (if briefly), and had a terrific year in 2007 to help the club to an ALCS. And at that point they extended his contract for umpteen way too many dollars, but would they have done any different at that point if they'd thought he was 27 instead of 24? Results don't justify fraud, but it doesn't really seem like Carmona himself bilked the team out of anything as things ultimately transpired.

One can argue that with a hitter it would have been different, perhaps: thinking a guy is 23 when he's just put up near-MVP numbers at the plate at age 26 might affect your contract offer differently than a pitcher in the same case. Or it might not ...
   11. cercopithecus aethiops Posted: January 21, 2012 at 06:14 PM (#4041992)
...thinking a guy is 23 when he's just put up near-MVP numbers at the plate at age 26 might affect your contract offer...


You just had to bring up Pujols, didn't you?
   12. Joe Kehoskie Posted: January 21, 2012 at 06:18 PM (#4041994)
The answer to the latter question is obviously yes: for the same reason that age relative to league matters immensely in evaluating (at least hitting) prospects, signing a 16-year-old with a given set of attributes is far more appealing than signing an 18-year-old with the same set. Two more years of future development, especially two more teenage years, makes a huge difference.

But right now, isn't the "huge difference" still theoretical? As I mentioned in #8, not every 16-year-old will be better at 17, and then at 18, and so on, and the "biggest kid in kindergarten" effect undoubtedly remains stronger at age 16 than at 18. I agree there isn't enough data in the article to draw any hard conclusions, but it's at least plausible that MLB teams would benefit from raising the signing age to 17 or 18. (Or, on an individual team level — absent an industrywide rule change — simply focusing more on older players.)

WRT to Carmona himself – given, obviously, that he should not have been breaking the law and should have to pay whatever penalties are in place – has he really cheated the Cleveland Indians out of anything?

He might not have cheated the Indians, but he cheated the system and probably cost some other player somewhere a chance in pro ball. It's an interesting morality debate, just like with the argument that's made that fringe players who used PEDs "cheated" non-using fringe players out of ML jobs. In a non-baseball example, this seems like someone sneaking back into high school at age 21 by claiming to be 18 and then making the varsity basketball team and/or getting great grades by virtue of being older, wiser, bigger, stronger, etc. In a zero-sum world, someone else gets unfairly bumped down the food chain.
   13. cercopithecus aethiops Posted: January 21, 2012 at 06:24 PM (#4042000)
it's at least plausible that MLB teams would benefit from raising the signing age to 17 or 18


If MLB raised the signing age to 18, kids would start using their older brothers' papers instead of their younger brothers'.
   14. Joe Kehoskie Posted: January 21, 2012 at 06:44 PM (#4042005)
If MLB raised the signing age to 18, kids would start using their older brothers' papers instead of their younger brothers'.

Probably right. I joked after the new CBA came out that, for the first time ever, Cuban defectors will have an incentive to claim to be older.
   15. Walt Davis Posted: January 21, 2012 at 06:59 PM (#4042015)
I recall at least two times -- Beltre and either Andruw Jones or Rafael Furcal -- where the team did sign them early. And MLB fined them for it. Has always given me reasonable faith in their ages.

And I couldn't care less if the guy putting up MVP numbers is really 23 or 26. I always found that the most entertaining part of the Pujols age "controversy." Putting up a 157 OPS+ at age 21 was somehow evidence he was older -- like guys putting up a 157 OPS+ at 24 are commonplace. Not to mention the 22-year-old high school player who's a true 125 OPS+ hitter in the majors only nobody knows.

Now, whether he's currently 32 or 35 might have some effect on my contract offer.
   16. Walt Davis Posted: January 21, 2012 at 07:11 PM (#4042024)
And on Carmona, it's hard to see how he "ripped off" anybody. As it turns out, he was one of the better signings anybody's made in the DR in the last decade or so just by virtue of that one big season. And the Indians signed him for 5/$22 but, even if they knew he was 26, not sure why that wouldn't still look like a good deal to them.* Young pitchers tend to be riskier than prime pitchers -- at 26, he's past the dreaded injury nexus and all they signed him for were his arb years.


On the signing to MLer conversion rate -- it occurs to me that it's not clear that their list of 5400 signings is the entire population of signings.

* I mean there are reasons (like K/9) it shouldn't have looked particularly great even if he was 23. But if they liked the shiny ERA at 23 I'm not sure they wouldn't have liked it at 26. Justin Masterson just came out of nowhere to have a nice season at age 26 and they've signed him for about $4 M in his first arb season. Romero was 25 and coming off a couple of solid not great seasons and the Jays signed him for 5/$31.

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