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The Evolution of Baseball Arbitrage (Part 1: Moneyball) PDF Print E-mail
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Lance Gurewitz Article Archive
Written by Lance Gurewitz   
Wednesday, 09 March 2011 08:13

The Extra 2%On the day of the release of Jonah Keri’s The Extra 2%: How Wall Street Strategies Took a Major League Baseball Team from Worst to First, it seems only natural to look back at the book to which it seems inextricably linked: Michael Lewis’ infamous Moneyball. Some reviews, such as this one from Baseball America, have pointed out some of the important differences between the two. In short, Keri’s book seems like it will focus more on the Rays’ overall business model than Moneyball did on that of the A’s. Still, it seems inevitable that some of the Rays’ baseball operations secrets will emerge, and it only seems natural to compare the insights of Andrew Friedman and company to those of Billy Beane and Paul DePodesta nearly ten years ago.

For the first step, let us recall some of the takeaway concepts of baseball operations as recommended by Moneyball. The focus will not be on whether these represent true baseball knowledge; there is already a steady supply of debates on that, some even emerging from World Series champion front offices. This is only a recap of the views that sparked the sabermetric revolution, which seems ready to update the mainstream in a matter of hours. With that in mind, let’s turn back the clock.


Chapter 2 – How to Find A Ballplayer

Drafting players based on “tools”, talent that has not translated into results, or anything you can “dream on” is misguided. If the results (statistics) have not shown up before the draft, they will not show up afterward since players do not change. Conversely, if a player does have good stats, qualities like body type and fastball velocity become irrelevant. Hitting ability, especially plate discipline, take precedence over position and defense. College players are far better picks than high school ones, as the former have more meaningful statistics.

Chapter 4 – Field of Ignorance

Many traditional box score statistics have limitations and even fatal flaws when examined logically, but they still determined how players were valued. Errors focus only on balls that are hit within a fielder’s range and ignore those he is too slow to reach. RBI fail to account for the contribution of the players who reached base in the first place. Batting average does not credit hitters for their plate discipline in the form of walks.

Chapter 6 – The Science of Winning an Unfair Game

Due to most teams’ reliance on misleading statistics, some types of players are systematically overvalued, some systematically undervalued. One overvalued statistic is the save, which allowed Billy Beane to trade away his closers for prospects who would replace them at a lower price. An undervalued statistic is on-base percentage; even the dawn of OPS failed to value it properly, as Paul DePodesta found that an extra point of OBP is three times as important as an extra point of SLG. Also, it is possible to project a team’s record based on its run differential and use improved batted ball data to quantify the fielding aspect of that differential.

Chapter 7 – Giambi’s Hole

The important thing is to replace the aggregate, not the individual, when players depart. The difference between a 2-1 count and a 1-2 count is enormous; getting the first two out of three strikes is more important than just getting first pitch strikes. Pitches seen per plate appearance is an important statistic since working the starter allows other hitters on your team to face tired or inferior pitchers.

Chapter 10 – Anatomy of an Undervalued Pitcher

The pitcher has no control over whether a batted ball becomes a hit. Strikeout, walk, and home run rates are highly consistent from year to year, but batting average on balls in play is not. There is actually very little correlation between a pitcher’s BABIP allowed in one year to that in the next.


There are countless other, more detailed observations throughout the book, of course, but these seem to be the ones that have always caused spirited debate in the national media. The Extra 2%, released today, will surely have something to say about most of these on account of the Rays’ adjustments to the attitude the A’s used nearly a decade ago. Take some time to read Jonah Keri’s acclaimed chronicle of the formation of perhaps baseball’s best front office, and then return to The Biz of Baseball for a detailed comparison.

 


Lance Gurewitz is currently a freshman at the Wharton School of Business at the University of Pennsylvania. He also serves as the MLB Trade Rumors Florida Marlins Team Coordinator. You can read and discuss his baseball analysis and other sports musings in 140 characters or less by following @LanceWG42 on Twitter

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