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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) Login to Bookmark
  Tags: billy beane, general manager

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   1. Yoenis Cespedes, Baseball Savant Posted: June 11, 2014 at 04:00 PM (#4723544)
Lewie's a pretty smart guy. He was one of my students as a teaching assistant and it was a lot of fun to talk about this project with him.
   2. Swedish Chef Posted: June 11, 2014 at 04:11 PM (#4723551)
there’s a massive inefficiency in the market for elite general managers waiting to be taken advantage of.

How would you separate the effect of the GM from the rest of the organization? It's not exactly unknown for former hot shots to flounder when they are parachuted into a new situation. And who haven't on occasion helped a dumb-as-#### boss look like a genius?
   3. Yoenis Cespedes, Baseball Savant Posted: June 11, 2014 at 04:15 PM (#4723554)
He addresses this:
It should be noted that these models treat everyone from the assistant general manager to the advance scouting intern as endogenous to the GM. Part of a GM's value to his or her team is knowing whom to hire and listen to and how to run the office, but these numbers are inherent overestimates insofar as they see a GM's ultimate responsibility for his or her employees' actions as the ability to work alone. On the other hand, signing free agents and making trades are but two facets of a GM's job; if there is comparable variation in GM skill at other aspects of running a team, my numbers could be significant underestimates.
   4. Danny Posted: June 11, 2014 at 04:20 PM (#4723560)
Further, the individual estimated effects for general managers should not necessarily be taken as accurate measures of their player-investing abilities.

Oh, OK.
   5. Swedish Chef Posted: June 11, 2014 at 04:29 PM (#4723572)
He addresses this

Well, you can't buy a front office as a package, so it beats me how one could think that there's even a market for what is measured. Of course it's inefficient, it can't be bought or sold.
   6. PreservedFish Posted: June 11, 2014 at 07:14 PM (#4723642)
Is this type of article - wherein the entire thesis is negated by the caveats - common in academia? It sure as hell is on the internet.
   7. Joe Kehoskie Posted: June 11, 2014 at 07:25 PM (#4723650)
Well, you can't buy a front office as a package, so it beats me how one could think that there's even a market for what is measured. Of course it's inefficient, it can't be bought or sold.

I haven't read the article yet, but while front offices aren't "bought as a package," that's the net effect of many GM changes by the time Year 2 rolls around. For example, there aren't many — if any — high-ranking baseball operations people in the Astros' front office from the McLane/Wade era who were kept by Luhnow. Unlike with players, huge numbers of front office types aren't locked into long-term deals that prevent them from changing teams at will.
   8. Willie Mayspedester Posted: June 11, 2014 at 07:45 PM (#4723661)
Mike Trout hasn't been to the postseason. Depending on how much a person thinks Moreno has forced the GM's hands in getting Pujols and Hamilton you could deduce that another team's GM has been more valuable during his career so far.
   9. Moeball Posted: June 11, 2014 at 08:39 PM (#4723686)
How would you separate the effect of the GM from the rest of the organization? It's not exactly unknown for former hot shots to flounder when they are parachuted into a new situation.


Exactly. I know a lot of Cubs fans whose patience with Theo is wearing very thin.
   10. Sean Forman Posted: June 11, 2014 at 09:21 PM (#4723701)
I think the biggest issue is that much that is attributed to the GM is simply luck. I'm not convinced there is any demonstrable skill in scouting amateur players. Just looking through the drafts from 1995-2005 points out to me how much of this is an utter crapshoot. I have no doubt that if you were dead certain of the effect of the GM then they'd have tremendous value, but if you were dead certain then the bad ones would immediately be fired and you'd have 10 new likely decent GMs drowning out the effect of the already hired really good GMs.
   11. Walt Davis Posted: June 11, 2014 at 11:23 PM (#4723752)
I don't have the time to read the full article here, much less the paper behind it much less really dig into the data but ...

if I get the gist right, a good GM (1 SD above mean) is worth about 5 wins PER YEAR in trading ability and maybe up to 7-8 when FA ability is included.

I either find that totally unbelievable or I find it kinda plausible depending on how it's being measured. But the "plausible" version isn't nearly as impressive as it sounds.

That is, I assume that when we talk about 5 wins per year we're talking about a measure taken over the life of the trades involved. One rip-off trade might deliver 3-5 WAR per year for several years. But one rip-off trade is also quite possibly largely random.

But if we're talking about adding 5 wins in year 1 trades then another 5 wins in year 2 trades and so on ... that I don't really believe. Also obvious questions about how trades might be chained.

Let's take Matt Garza and the Rays. The Rays got Garza and Bartlett for Delmon Young and a couple of other pieces. Garza gave the Rays 8.5 WAR in three seasons and Bartlett gave them 10.4 WAR in three seasons. Young gave the Twins 1.1 WAR over 3+ seasons and only about 1 WAR total before he hit FA. So that's a 18 WAR edge over three seasons in one trade. Garza was then traded for Chris Archer who has already given the Rays about 4 WAR and quite possibly 15-20 before he hits FA. (Hak-Ju Lee is still young but has gone pretty far off the rails and the others were pretty much replacement level.)

By that accounting, that one trade from 2007 might be enough to put ... what's his name ... in the +1 SD group for a decade assuming he comes out average on his other trades. If he was also the guy to trade for Zobrist in 2006, that's probably enough to put him in the +2 SD group.

but if you were dead certain then the bad ones would immediately be fired and you'd have 10 new likely decent GMs drowning out the effect of the already hired really good GMs.

Depends on the supply of replacement/average/good GMs of course. Alas the Cubs can't simply replace Bonifacio with McCutchen no matter how obvious such a move is.
   12. RMc is a fine piece of cheese Posted: June 12, 2014 at 08:08 AM (#4723829)
Why not hire Mike Trout as a ballplayer, win a buncha games, then after he retires hire him as a GM? It's win-win!
   13. snapper (history's 42nd greatest monster) Posted: June 12, 2014 at 08:50 AM (#4723834)
I think this is a fairly silly assertion.

There is a dire shortage of people who can play baseball at an MLB level, much less an All-Star or MVP level.

From the perspective of MLB, there is no shortage of smart people who can manage and learn to evaluate baseball players. The last part can't be that hard, or scouts wouldn't earn peanuts.

Now that baseball has moved past requiring you to be an ex-big leaguer in order to get a front office job, managerial talent should be readily available.

I think the next big breakthrough would be a team paying its low level front office staff decent money, to attract the best minds, rather than exploit the masses willing to work for near nothing.
   14. AROM Posted: June 12, 2014 at 09:46 AM (#4723890)
Let's take Matt Garza and the Rays. The Rays got Garza and Bartlett for Delmon Young and a couple of other pieces. Garza gave the Rays 8.5 WAR in three seasons and Bartlett gave them 10.4 WAR in three seasons. Young gave the Twins 1.1 WAR over 3+ seasons and only about 1 WAR total before he hit FA. So that's a 18 WAR edge over three seasons in one trade.


Garza + Bartlett cost about 10 million those 3 years, Young cost 5 million. Doesn't change the point, that extra 5 million should buy 1 win, making it +17 for the Rays. Just a reminder to always consider dollars spent in these calculations.

As far as who wins trades/ free agent signings, so much of that is dependent on player health. Some of that can be predicted, knowing which free agent pitcher has pre-existing shoulder damage or something. Not many people working in front offices have that kind of medical expertise, but can at least hire medical consultants. A lot of player health variables can't be known. Like when your cleanup hitter will break his ankle celebrating a walk-off homer.
   15. A triple short of the cycle Posted: June 12, 2014 at 11:04 AM (#4723933)
I think the biggest issue is that much that is attributed to the GM is simply luck.

As an Athletics fan, I agree completely. The A's sucked for five years in a row, from 2007 to 2011. Most of the players Beane acquired inexplicably sucked. It was frustrating. After the 2011 season, the team's best returning players were Jemile Weeks and Scott Sizemore. The team's success in 2012, 2013, and 2014 came out of nowhere. Suddenly, all of Beane's moves were paying off. Cespedes signing, trade for Reddick, Donaldson coming from nowhere to be best player in league, Brandon Moss coming from nowhere, Derek Norris, Sean Doolittle...
   16. Hank G. Posted: June 12, 2014 at 11:27 AM (#4723956)
I think the biggest issue is that much that is attributed to the GM is simply luck.


As an Athletics fan, I agree completely.


There still could be an element of skill, it’s just that there is a lot of noise.

An expert blackjack player can win against the casinos in the long run, but still may go through long losing streaks.

At this point, I think you have to believe that Beane is a good GM. What he’s done, for as long as he has done it, with the resources he has had to work with, is hard to attribute to “luck”.
   17. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 12, 2014 at 11:35 AM (#4723966)
I'm not certain that one needs to know very much about baseball to be a successful GM; I think that a firm grasp of sound business principles and a deep understanding of the value of hiring the right people and letting them do their jobs gets you most of the way there.
   18. Bitter Mouse Posted: June 12, 2014 at 11:38 AM (#4723969)
Who is the greatest GM of all time? Branch Rickey? (I am honestly not sure, Branch was the name that jumped out at me, but I am not a Baseball historian).

Were they worth more than Babe Ruth?

Now pick a terrible GM (I am not sure worst is at all possible to measure). Are they worse than a terrible player (again pick one).

I think the answer is yes, the best GM is better than the best player, and a terrible GM is worse than a terrible player (for one thing they are more likely to be gotten rid of). That said I would rather have the great player. Theirs is a talent than is much more consistent and reliable (reproducible, for as long as their career lasts anyway).
   19. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 12, 2014 at 11:42 AM (#4723973)
It's Branch Rickey, no question.

I think one could reasonably argue that Branch Rickey was more valuable to his employer than Babe Ruth was to his.

I suspect that the pool of people who have the skills to be effective GMs is much larger than consistently bad hiring decisions by owners make it appear.
   20. DL from MN Posted: June 12, 2014 at 11:53 AM (#4723988)
Just a reminder to always consider dollars spent in these calculations.


Good point. A lazy GM can just buy all his marginal wins on the free agent market. That isn't worth much to his employer but it would make him look good in this analysis because it only looked at trades and free agency. Salary dump trades show up as a net negative in this article.

Everyone knows the most cost effective way to get marginal wins is by finding the right amateur free agents. It's also really difficult.
   21. Hank G. Posted: June 12, 2014 at 03:01 PM (#4724193)
Who is the greatest GM of all time? Branch Rickey? (I am honestly not sure, Branch was the name that jumped out at me, but I am not a Baseball historian).


Probably Rickey, who was very innovative (he basically invented the captive farm system), and far ahead of his time in evaluating talent.

I think it’s hard to compare GMs from pre-draft days with the present though. Rickey was able to sign a bunch of players, put them in the Cards’ huge farm system and let the talent bubble up. We can only speculate about how he would do under a system where drafting and signing free agents are crucial skills.
   22. snapper (history's 42nd greatest monster) Posted: June 12, 2014 at 03:10 PM (#4724210)
I think one could reasonably argue that Branch Rickey was more valuable to his employer than Babe Ruth was to his.

Maybe, but I think that's only because GM-ing skills don't age nearly as rapidly as athletic skills.

I think for a 15-year stretch, Ruth is still far more valuable.
   23. Joe Kehoskie Posted: June 12, 2014 at 04:30 PM (#4724333)
I think it’s hard to compare GMs from pre-draft days with the present though. Rickey was able to sign a bunch of players, put them in the Cards’ huge farm system and let the talent bubble up. We can only speculate about how he would do under a system where drafting and signing free agents are crucial skills.

Indeed. Rickey was an innovator, but that was still baseball's Stone Age when it came to scouting and development, and ML roster construction generally. Stan Musial famously got called up in September 1941 because the Rochester Red Wings' traveling secretary* happened to answer the phone when Rickey called and asked if anyone there could help the big league team. "Yeah, Musial, and take Kurowski and Dusak with him," came the reply. Imagine a guy like Musial essentially being unknown to the front office these days while in Triple-A.

(* Howie Haak, who went on to a legendary career in scouting.)

***
I think for a 15-year stretch, Ruth is still far more valuable.

I don't know. The years obviously don't fully overlap, but I'm not sure Oakland would have been better off with Mike Trout and a league-average GM for the past 15 years rather than Billy Beane (and I tend to believe Beane is a little overrated).
   24. DL from MN Posted: June 12, 2014 at 04:45 PM (#4724363)
Aren't the Angels essentially Mike Trout and a league-average GM?
   25. AROM Posted: June 12, 2014 at 04:45 PM (#4724366)
Over the past 15 years, you definitely would have wanted Beane. Trout probably would have only been worth 1-2 wins back in 1999. After all, he was only 7.
   26. AROM Posted: June 12, 2014 at 04:58 PM (#4724382)
At this point, I think you have to believe that Beane is a good GM. What he’s done, for as long as he has done it, with the resources he has had to work with, is hard to attribute to “luck”.


There's enough evidence to think he's a good GM, but not as good as you'd conclude from only looking at the results of his moves over the last 3 years. 2007-2011 is part of his record too.

There's no reason to think he was a great GM, contracted a case of the stupids for 5 years, and then recovered. His average record from 1999-2014 per 162 games is 88-74. With below average payrolls to work with, that's probably 10 wins above average, which fits in the article's premise.

   27. Walt Davis Posted: June 12, 2014 at 06:23 PM (#4724513)
Y'know, we can get 500 post threads on the usage of "comprise" but people can just toss around "sucks" with impunity. :-)

From 2007-11, the A's worst win total was 74 wins and one of those seasons they even finished 500. They had 3 3rds and 1 2nd place finish in the AL West. And each of those years, their pythag was better than the actual so it's not like they were getting blown out.

They were pretty boring teams and three of them were pretty awful hitting teams but they did not suck.
   28. Walt Davis Posted: June 12, 2014 at 06:40 PM (#4724528)
Rickey was essentially the Babe Ruth of GMs but, as noted, also in the sense that he was a man in a boy's league. Just like Ruth essentially created the concept of the power hitter, Rickey created the concept of the GM. Transport the young Rickey to, say, 1990 and he probably would have quickly jumped on the sabermetrics train but that would put him ahead of the curve, not building the first interstate. He'd have changed his maxim to "better to let a player walk a year early than extend him three years too long." So he'd likely have been a good GM but he wouldn't have had nearly the impact. Guys like Beane, Schuerholz, Jocketty I think are rough analogies for Rickey starting in 1990.

Transplant the young Rickey to 2010 and I'm not sure we'd be able to pinpoint him as a young genius. Pretty much everybody is on the sabermetrics train. I'm not sure there's any reason to think he could have done more with the Rays than Andrew Friedman did (that's right, b-r has GM names now) or more with the A's than Beane or more with the Red Sox than Epstein/Cherington. He'd probably have kept the Yanks out of the ARod extension (although it's far from clear that was Cashman's idea).

In a way it's odd that baseball is currently under the sway of the Cult of the GM. With revenue sharing, big media paydays, draft slotting, international signing limits, every good young player under long-term contract and ubiquitous data and analysis there really aren't many big impact decisions for a GM to make any more. So many of the differences now do seem to come down to "luck" -- did you find Donaldson/Moss or did you find Matt LaPorta or did you sign Adam LaRoche? Did you draft Trout or did you draft Shelby Miller (much less Jered Mitchell)?
   29. Walt Davis Posted: June 12, 2014 at 06:49 PM (#4724531)
There's no reason to think he was a great GM, contracted a case of the stupids for 5 years, and then recovered. His average record from 1999-2014 per 162 games is 88-74. With below average payrolls to work with, that's probably 10 wins above average, which fits in the article's premise.

And with Beane in particular that is particularly impressive. I raised the Garza/Bartlett/Archer/Zobrist examples for the Rays earlier and noted that might be enough to make Friedman +10 for a decade. But Beane's +10 is the result of a bejillion small moves* with massive roster turnover, no massive draft successes, etc. Few of his trades for established players have worked out. (I didn't look -- how does he do on the measures in this article?)

*The caveat for Beane is that a lot of the success came early, with players he inherited. And that's true for almost any GM ... their record in the first 3-5 years may not be their doing. Since the article only looks at trade/FA decisions made by a particular GM, it largely avoids that issue. It may not entirely avoid it since what talent and contracts you inherit influence what kinds of trades/signings you can make, but it wouldn't seem to be a major issue.
   30. Danny Posted: June 12, 2014 at 07:14 PM (#4724540)
I didn't look -- how does he do on the measures in this article?

0.92 wins below average for his career. Because...

Eliminating signings and trades in which not every involved player has since hit free agency means leaving out deals from as far back as 2002, so many GMs cannot be judged by their full bodies of work. Because deals with longer-lasting impacts tend to be larger in eventual scope than those whose involved players all move on within a couple seasons of the transaction, this method has an unavoidable bias towards excluding GMs’ most defining trades.

Anecdotally speaking, as I went through my trade data to eliminate incomplete deals I noticed that this issue was particularly well illustrated for longtime Oakland Athletics GM Billy Beane. Several of the best trades Beane has made in his 17-year tenure as general manager — including trading Mark Mulder for Dan Haren, Daric Barton, and Kiko Calero in 2004; swapping Rich Harden and Chad Gaudin for a package including Josh Donaldson in 2008; and dealing Andrew Bailey and Ryan Sweeney for Josh Reddick and two other players in 2011 — were eliminated from the dataset because at least one of the players he acquired in each deal is still under team control. His ultimate ranking as one of the worst trade-investors in baseball probably reflects this sample bias more than his true trading ability.
   31. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 12, 2014 at 07:40 PM (#4724554)
Aren't the Angels essentially Mike Trout and a league-average GM?


This might be the most insightful post in the thread.
   32. Walt Davis Posted: June 13, 2014 at 01:59 AM (#4724680)
0.92 wins below average for his career. Because...

This and the Mets thread have me thinking that the latter Beane innovation -- "market inefficiency" -- may be that he truly understands and has mastered the concept of "trade chains."

He got three cheap years of Swisher and 9 WAR ... before arb ...

traded ... he had a lousy year for the White Sox but was fine for the Yanks so probably still a "true" 3 WAR player for the remainder of his pre-FA years ...

A's got Gio and Sweeney who combined for about 13 WAR for which the A's paid about $4 M.

Gio traded pre-arb. He put up 8 WAR in 2012-13, nothing so far this year ... for about $13 M ... good value for the Nats. Sweeney was part of the trade for Reddick but I think Bailey was the main piece there. Still Reddick had his one great year, one average and has given the A's 8 WAR in one arb year. (I think that one big year was "luck" but the A's got the benefit)

The A's got Milone, Norris, Peacock and Cole. Peacock was part of the Lowrie trade and I think Cole was in a later package too or maybe just released.

Milone and Norris have so far combined for 7.6 WAR. Milone is in his last pre-arb year, Norris has one more.

So ... amazing really ... he got 9 WAR for nothing out of Swisher, turned it into 13 WAR for next-to-nothing out of Gonzalez and Sweeney which he turned into (adding Bailey) about 16 WAR out of Reddick, Milone and Norris for next-to-nothing. Both Swisher and Gio remained good players after he traded them and even good values through their arb years so it's not like it would have been a disaster or financially crippling for the A's to hold onto them. But all told that's something like 38 WAR for about $10 M total for the period 2005-14. He took the pre-arb years of one good player and parlayed them into another 7 years of good (nearly) pre-arb players.

Reddick and Milone are starting to get "expensive" but I'm not sure he'll get much for either (Milone=Wandy) but they might well bring back another Reddick/Swisher (much to the trading team's chagrin). If he stays healthy and keeps hitting, I'd imagine he can get a nice haul for Norris when the time comes. Maybe he gets 18-20 WAR out of the next step in this chain.

This isn't necessarily entirely positive -- over three years, there are certain advantages to 9 WAR out of 1 player compared with 13 WAR out of 2 compared with 16 WAR out of 3. WAR per player-year is going down in that sequence. But it sure provides depth, helps compensate for any lack of development of young players and leaves you with lots of pieces you can flip in small trades or as add-ons to bigger trades.

Next thing you know, you get lucky with a Donaldson and a Moss and a Doolittle and a Crisp and a Lowrie and a Gray and a Kazmir and a Jesse Chavez (really?) and you no longer SUCK!!! :-)
   33. Hank G. Posted: June 13, 2014 at 12:44 PM (#4724992)
There's enough evidence to think he's a good GM, but not as good as you'd conclude from only looking at the results of his moves over the last 3 years. 2007-2011 is part of his record too.


Sure. That was the point I was trying make, that even if you make the “correct” move, it still may not work for you in the short term.
   34. PreservedFish Posted: June 13, 2014 at 01:16 PM (#4725035)
This and the Mets thread have me thinking that the latter Beane innovation -- "market inefficiency" -- may be that he truly understands and has mastered the concept of "trade chains."


This works really well in computer games like Baseball Mogul, where after a couple decades of trade chaining your AAA team might be the second best team in baseball.

But I don't think the concept makes a ton of sense in the real world - it doesn't matter, in any way, that Norris can be linked all the way back to the Swisher trade. What Beane was doing was just cycling through cohorts of young players. He knew that he needed a lot of good luck to compete with his payroll, and that there was no sense in enjoying the play of a few 3 WAR guys if was only going to add to 81 wins. So he traded them for prospect bundles, saw the prospects grow into good players, realized that he again wouldn't be able to compete, and repeated the process.

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