A look at some of the surprise performers of 2011.
The Cleveland Indians, Pittsburgh Pirates, Arizona Diamondbacks all have had surprisingly good seasons, even with the Pirates going into a strong tailspin in the second half. No one expected these teams to contend this year but the Indians and D-backs are still in the hunt. The question however is are they showing us a look into the future or were they simply the recipients of good fortune. Let's break each team's season down and look to see what we can expect from them looking forward.
First the Indians. Last year the finished 4th in the AL Central with a record of 69-
93. Coming into the year most the prognosticators predicted them to finish near that mark again if not a little worse. Their opening day starter was Fausto Carmona who has been less than impressive since his break out 19 win campaign in 2007. He would be followed by Carlos Carrasco, Justin Masterson, Josh Tomlin and Mitch Talbot. On paper that didn't look like a team strength in April. Last season the five of them combined for a record of 37-46. The starting rotation was expected to be the biggest weakness of a young struggling team that was waiting for some of their recent draft picks to finish their grooming in the minors.
The starting lineup didn't look much better. Shin-Soo Choo was expected to be the bright point in an other wise extremely weak lineup. Asdrubal Cabrera, Orlando Cabrera, Carlos Santana, Matt LaPorta, Jack Hannahan, Michael Brantley, Shin-Soo Choo, Austin Kearns and Travis Hafner. None of these names outside of Choo and Santana inspire much confidence with the bat coming into the 2011 campaign. Hannahan was nothing more than a place holder while Lonnie Chisenhal finished learning the position at AAA. Austin Kearns was expected to be the fourth outfielder as soon as Grady Sizemore could finish his rehab stint in the minors to return from micro-fracture surgery. Orlando Cabrera, well past his peak years, was to help add a veteran presence and leadership until Jason Kipnis was ready. Asdrubal Cabrera was considered and everyday player with a great glove and .300 BA ability and little power. Brantley and LaPorta, both coming to the Tribe in the CC Sabathia trade, were expected to break out and settle in to be every day players of the future. Hafner having battled injuries over the last couple of seasons was figured to be past his prime. No one was expecting much from the club this year however, it was just going to be a chance for the Tribe to see what they had and build for next season.
After opening weekend the predictions looked correct. However after that opening set with the White Sox the Tribe pitchers got into a rhythm and the bats came to life. They went on a tear through April and into May posting 30-15 record after 45 games. They burst into first place in the division and looked like they may put a big enough gap between them and the rest that they could just coast into the playoffs. In June however injuries began to set in and the team cooled off. By the All-Star break the had fallen to second in the division and most assumed that was the end of a nice fairy tale. However they haven't gone into the tailspin most expected. They have managed to stay within reach of the division crown all the way into September. Although it's unlikely that they will be able to catch the red hot Tigers, it appears they aren't going away and should at least make it an interesting season ending series with their Motor City Rivals.
When looking at the Indians season to date it's easy to write it off to an extremely hot start and little more at first glance. However a closer look really does grant some excitement for a Tribe fan. The big contributors have been young players who are under contractual control for a few more years at least. Justin Masterson has shown that he has ace type ability and would likely be in the discussion for the Cy Young award if the team had been able to grant some run support to his amazing season, (and Justin Verlander wasn't having the season he is having). Masterson has posted an 11-8 record and an ERA of 2.92.
Josh Tomlin has shown that he has the ability to hang in a game nearly every time he takes the mound. Until his final start before going on the DL with elbow swelling he had made 37 consecutive starts of 5+ innings to start his career becoming the first player in MLB history to do so in his first 37 appearances. His high 80s fastball isn't impressive but he can control it to both sides of the plate and keeps batters off balance.
Fausto Carmona got off to the start that most would have expected. Coming out of the gates showing flashes of brilliance followed by complete blow ups. After a brief trip to the DL however he has been amazingly effective. His over all 4.84 ERA is largely the result of his early season blowups. Over his last 40 innings he has put up a respectable 3.38 ERA with 28 Ks and only 10 BBs.
Asdrubal Cabrera has emerged as one of the best offensive shortstops in the game. He has given above average defense up the middle to back up the Tribes sinker ball heavy rotation and put up a .278/.337/.467 line with 22 HRs 16 SBs, and 80 RBIs thus far. Getting the starting nod for the All-Star game in the first appearance of his career.
Carlos Santana started the season slow after his amazing rookie campaign that was cut short with a torn MCL in 2010. Santana has looked a bit rough around the edges to say the least behind the plate this year. His BA of .240 is rather uninspiring however his .72 BB/K rate is very impressive as are his 21 HRs. His 67 RBI are not overwhelming but are pretty decent especially for a catcher.
Matt LaPorta has not yet seemed to find his groove in the Majors and is currently back in triple-A for that reason. He has shown flashes of the right handed power bat the Indians where hoping he could become but has failed to be consistent and has turned into a simple hacker at the dish. Brantley on the other hand played a good left field and put up good at bats until he was shut down with a wrist injury.
The thing that is truly amazing though about this Cleveland team is the number of injuries to key players that they have managed to move past. Shin-Soo Choo, Travis Hafner, Grady Sizemore, Michael Brantley, Fausto Carmona, Carlos Carrasco, Mitch Talbot and Josh Tomlin have all had trips to the DL. Just a look at the roster that took the field tonight as I write this is quite telling. Eziquiel Carrera, Kosuke Fukudome, Carlos Santana, Jim Thome, Jack Hannahan, Jason Donald, Lonnie Chisenhall, Cord Phelps, and Jared Head with David Huff pitching. Only 2 of the 10 starters were on the opening day roster. However even with the amazing number of roster moves needed this season and the fact that the Tribe's triple-A team is starting for them right now they are still in contention.
In short I would say the Indians have a bright future. Key players seem to have emerged this year and shown amazing resilience. Even though it seems unlikely that they will win the division this season it seems likely that they will be in the hunt for years to come. If this season is any indication to the true potential that these young players have, the Indians are going to be more than just competitive.
Saturday, September 3, 2011
Wednesday, March 2, 2011
How About the O's
The Orioles made a lot of noise this off season with the signings that they made, but did they make moves that will push them into the winners circle. Last season they struggled, to say the least, with a record of 66-96. They play in one of the most challenging divisions in sports, the AL East and they have very little budget to work with. This off season though they went out and picked up quite a few free agents to bolster their roster. Vlad Guerrero, Derek Lee, Kevin Gregg, Justin Duchscherer, Koji Uehara and Jeremy Accardo all signed to join the club. The Orioles invested over $25 million to bring them on board, will it pay off?
Looking at the acquisitions the first thing to jump out at me was the number of position players they went for. Derek Lee is a solid first basemen in most regards but his age has driven down his value significantly. Last season his batting average dropped to .260, the worst it's been since 1999 and his strike out rate jumped 4%. At $7.25 million, which is what the O's are paying him this year, they must believe last season was a fluke.
Vlad had a solid year last year embracing the DH role batting .300 with 29 HRs for the Rangers. He should be able to at least come close to those numbers in the hitter friendly confines of Camden Yards, but now where do they play Luke Scott? Scott was just behind Vlad last year with a batting average of .284 and 27 HRs and looks to be fighting for at bats in left field or spelling Lee at first.
They also made the trade with the Diamondbacks for Mark Reynolds who will take over at 3rd base. He will likely hit quite a few home runs for them as last year he had 32 but only batted for an average of .198. He struck out an amazing 42.3% of the time last year against the NL West pitchers. Although the Giants had quite possibly the best pitching in the league last year I don't think moving to Baltimore where he will have to face the Yankees, Red Sox, Blue Jays and Rays will be much help for him. He will be replacing Melvin Mora who batted .285 last season but only hit 7 HRs. So apparently the O's are planning on hitting enough long balls to push them to the top.
Last season they scored only 613 runs, it is likely that they will increase that number by a few this year. However even with more long balls I don't see them getting over 660 or 670. The real problem last year for them was pitching. They gave up 785 runs with a team ERA of 4.59. To address their pitching woes they picked up Kevin Gregg and Duchscherer.
With a team ERA of 4.59, I don't see a couple of relief arms bring them down into contention. Duchscherer was a low cost pickup at $700 K for the season. This is obviously them hoping that he can stay healthy and give them a full season which would make him a bargain. In his 5 games last year he posted a 2.89 ERA for Oakland, but he hasn't pitched a full season in the majors since 2008. If he can stay healthy he could significantly help this Baltimore staff.
The Orioles are hoping for some of their young starters to take big steps forward this year if they want these signings to be worth what they paid. Although Duchscherer may help by giving them a potential ace to the staff, without break out campaigns from Matusz, and company they are still looking at a weak rotation, by far the weakest in their division. I don't see the O's finishing very high in the standings, although they may win a couple more games and finish around 70 wins $25 million is a lot to pay for 4 more wins. Even if Duchscherer stays healthy and Matusz breaks out, Reynolds bats over .220 and Derek Lee brings his average back to where it has been the O's still look like a team missing too many pieces to put together a winning campaign.
Looking at the acquisitions the first thing to jump out at me was the number of position players they went for. Derek Lee is a solid first basemen in most regards but his age has driven down his value significantly. Last season his batting average dropped to .260, the worst it's been since 1999 and his strike out rate jumped 4%. At $7.25 million, which is what the O's are paying him this year, they must believe last season was a fluke.
Vlad had a solid year last year embracing the DH role batting .300 with 29 HRs for the Rangers. He should be able to at least come close to those numbers in the hitter friendly confines of Camden Yards, but now where do they play Luke Scott? Scott was just behind Vlad last year with a batting average of .284 and 27 HRs and looks to be fighting for at bats in left field or spelling Lee at first.
They also made the trade with the Diamondbacks for Mark Reynolds who will take over at 3rd base. He will likely hit quite a few home runs for them as last year he had 32 but only batted for an average of .198. He struck out an amazing 42.3% of the time last year against the NL West pitchers. Although the Giants had quite possibly the best pitching in the league last year I don't think moving to Baltimore where he will have to face the Yankees, Red Sox, Blue Jays and Rays will be much help for him. He will be replacing Melvin Mora who batted .285 last season but only hit 7 HRs. So apparently the O's are planning on hitting enough long balls to push them to the top.
Last season they scored only 613 runs, it is likely that they will increase that number by a few this year. However even with more long balls I don't see them getting over 660 or 670. The real problem last year for them was pitching. They gave up 785 runs with a team ERA of 4.59. To address their pitching woes they picked up Kevin Gregg and Duchscherer.
With a team ERA of 4.59, I don't see a couple of relief arms bring them down into contention. Duchscherer was a low cost pickup at $700 K for the season. This is obviously them hoping that he can stay healthy and give them a full season which would make him a bargain. In his 5 games last year he posted a 2.89 ERA for Oakland, but he hasn't pitched a full season in the majors since 2008. If he can stay healthy he could significantly help this Baltimore staff.
The Orioles are hoping for some of their young starters to take big steps forward this year if they want these signings to be worth what they paid. Although Duchscherer may help by giving them a potential ace to the staff, without break out campaigns from Matusz, and company they are still looking at a weak rotation, by far the weakest in their division. I don't see the O's finishing very high in the standings, although they may win a couple more games and finish around 70 wins $25 million is a lot to pay for 4 more wins. Even if Duchscherer stays healthy and Matusz breaks out, Reynolds bats over .220 and Derek Lee brings his average back to where it has been the O's still look like a team missing too many pieces to put together a winning campaign.
Monday, February 28, 2011
Is It Time For A Salary Cap?
I was asked this question the other day and realized that to give a real answer could take me a little bit of time. In short I don't feel that there is a legitimate need for a salary cap in baseball. At face value it seems like there is a glaring need, teams have drastically different salaries and it often feels like the post season is the same group of teams every year. However I feel that not using a salary cap has made MLB a great example of how well capitalism can work.
Prior to the introduction of free agency there was no real need to discuss the possibility of a salary cap, each team got players through their ability to find and sign amateur players or through trades made with other teams. In 1976 however that all changed. Players where granted the ability to become free agents and seek out contracts with which ever team they chose. That opened the door for more lucrative salaries to players and the ability of teams to buy the talent that they wanted, if they where willing to pay enough.
Since that time the Yankees have established a reputation around the fact that they will pay as much as is needed to win championships. They have had a good bit of success in that regard, since the first World Series was held in 1903 they have a record 27 championships. 20 of those, however, came before the 1976 introduction of free agency, meaning they won nearly 30% of World Series before 1976. Since then they have only won 7. That is more than any other franchise in the same time frame but not as dominant as it may seem, it is only about 20%.
In the 34 years since the introduction of free agency there have only been 9 franchises to win multiple World Series. Of those 9 only the Yankees have more than 2. In 34 years though you have 20 different franchises with at least one World Series win. The NFL has a salary cap and over the same time frame they have only 15 different winners and only 8 with multiple titles.
The idea of introducing a salary cap would be to try and create more parity in the sport by evening out the playing field for free agents. However there doesn't seem to be a need to create more parity at this time. Although the Yankees have more titles than any other team they haven't accomplished that at any more dominant of a pace then they had before free agency came into play, in fact it seems to have slowed them down a bit.
In the early 2000s Bud Selig thought there was a need for a cap and he hired a group of economists to look into the problems. They looked over historical data and found no proof that a need existed. As a result of their failure to find what he wanted, we now have revenue sharing. The current revenue sharing system was created to help some of the smaller market teams produce more competitive teams. The teams that pay the most for players have to give a percentage of their revenue to MLB who then will divide it up to the teams who pay the least. Instead of creating greater parity though and helping the poorer teams out it has helped make it profitable to lose. The Pirates have reported profits every year since revenue sharing despite not having a winning season. Tampa Bay had profits each year leading up to their World Series appearance in 2008.
What MLB has shown through all of this is that there are many different ways to win baseball games. Likewise there are a number of different ways to produce profits for their clubs. The key for the smaller market teams is finding ways to be creative in team construction. The more creative a general manager becomes the more likely the team is to succeed. Introducing a salary cap would take some of the freedom currently available to GMs and potentially slow the growth of the game.
Recently the idea of a salary cap has been in the news again as Kenny Williams of the Chicago Whitesox mentioned his opinion on the matter in relation to the Pujols contract talks. What he says, in a nutshell, is that paying a player $30 million a year is crazy and that is evidence of need for a salary cap. However, if the market is willing to pay the money then I see no reason for Pujols, or anyone else, to turn it down. If the price truly is too high then the market will not pay it and Pujols will be forced to sign for less money than he wants. Introducing a salary cap to say that a player is simply getting payed too much would only cause problems. Similar in many ways to the disputes going on right now with the NFL owners and Players Assoc. The NFL is the most profitable sport in the world and the Players Assoc. feels they deserve more of the profits, but in part because of the salary cap teams can't pay more.
Last year MLB brought in nearly $7 billion in revenue. Teams averaged around $180 million each, with the Yankees making double the average revenue. With that much of a gap in team revenue where would you put the cap? And, if you did put in a cap what purpose would it serve? Players play for the right to be paid for their contributions, putting a cap on what a team can spend most likely would lead to players having to accept less for the same body of work. If you start paying them less eventually it could lead to another lengthy dispute and possible another lost season due to strikes. Allowing each team to decide for themselves how much they are willing to pay, allows for the ingenuity and innovation that capitalism thrives on. It allows men like Billy Beane to revolutionize small market teams. It provides for the romance that makes the game great win a smaller market team pushes for the play offs.
Prior to the introduction of free agency there was no real need to discuss the possibility of a salary cap, each team got players through their ability to find and sign amateur players or through trades made with other teams. In 1976 however that all changed. Players where granted the ability to become free agents and seek out contracts with which ever team they chose. That opened the door for more lucrative salaries to players and the ability of teams to buy the talent that they wanted, if they where willing to pay enough.
Since that time the Yankees have established a reputation around the fact that they will pay as much as is needed to win championships. They have had a good bit of success in that regard, since the first World Series was held in 1903 they have a record 27 championships. 20 of those, however, came before the 1976 introduction of free agency, meaning they won nearly 30% of World Series before 1976. Since then they have only won 7. That is more than any other franchise in the same time frame but not as dominant as it may seem, it is only about 20%.
In the 34 years since the introduction of free agency there have only been 9 franchises to win multiple World Series. Of those 9 only the Yankees have more than 2. In 34 years though you have 20 different franchises with at least one World Series win. The NFL has a salary cap and over the same time frame they have only 15 different winners and only 8 with multiple titles.
The idea of introducing a salary cap would be to try and create more parity in the sport by evening out the playing field for free agents. However there doesn't seem to be a need to create more parity at this time. Although the Yankees have more titles than any other team they haven't accomplished that at any more dominant of a pace then they had before free agency came into play, in fact it seems to have slowed them down a bit.
In the early 2000s Bud Selig thought there was a need for a cap and he hired a group of economists to look into the problems. They looked over historical data and found no proof that a need existed. As a result of their failure to find what he wanted, we now have revenue sharing. The current revenue sharing system was created to help some of the smaller market teams produce more competitive teams. The teams that pay the most for players have to give a percentage of their revenue to MLB who then will divide it up to the teams who pay the least. Instead of creating greater parity though and helping the poorer teams out it has helped make it profitable to lose. The Pirates have reported profits every year since revenue sharing despite not having a winning season. Tampa Bay had profits each year leading up to their World Series appearance in 2008.
What MLB has shown through all of this is that there are many different ways to win baseball games. Likewise there are a number of different ways to produce profits for their clubs. The key for the smaller market teams is finding ways to be creative in team construction. The more creative a general manager becomes the more likely the team is to succeed. Introducing a salary cap would take some of the freedom currently available to GMs and potentially slow the growth of the game.
Recently the idea of a salary cap has been in the news again as Kenny Williams of the Chicago Whitesox mentioned his opinion on the matter in relation to the Pujols contract talks. What he says, in a nutshell, is that paying a player $30 million a year is crazy and that is evidence of need for a salary cap. However, if the market is willing to pay the money then I see no reason for Pujols, or anyone else, to turn it down. If the price truly is too high then the market will not pay it and Pujols will be forced to sign for less money than he wants. Introducing a salary cap to say that a player is simply getting payed too much would only cause problems. Similar in many ways to the disputes going on right now with the NFL owners and Players Assoc. The NFL is the most profitable sport in the world and the Players Assoc. feels they deserve more of the profits, but in part because of the salary cap teams can't pay more.
Last year MLB brought in nearly $7 billion in revenue. Teams averaged around $180 million each, with the Yankees making double the average revenue. With that much of a gap in team revenue where would you put the cap? And, if you did put in a cap what purpose would it serve? Players play for the right to be paid for their contributions, putting a cap on what a team can spend most likely would lead to players having to accept less for the same body of work. If you start paying them less eventually it could lead to another lengthy dispute and possible another lost season due to strikes. Allowing each team to decide for themselves how much they are willing to pay, allows for the ingenuity and innovation that capitalism thrives on. It allows men like Billy Beane to revolutionize small market teams. It provides for the romance that makes the game great win a smaller market team pushes for the play offs.
Wednesday, February 23, 2011
Which Teams are Risking the Most
Often times with looking at various teams around baseball and the vast differences in their payrolls it is hard to gauge who is truly risking it all to win. Often times we see a smaller market team make a huge free agent signing and that looks like they are risking everything to win now. Paying big salaries obviously increases the need for the team to win to pay them back to the owners but which teams really are risking it all. I took a look at the revenue numbers on Forbes again and compared them with salary numbers reported on CBS to find the answers.
What I found was actually a bit surprising. I looked at each teams salary and figured that as a percentage of total revenue. The mean for the league was 45.3% of revenue being spent on players salaries. Interestingly the Yankees with their huge payroll only come in slightly above average on there with a 46.8% rate. Being the team in the largest market with the largest fan base does pay dividends. Looking at some of the smaller market teams that are often considered to be paying beyond their markets I found that most fell pretty close to the 45.3% mark. Saint Louis for example came in at 47.9% showing that they really do have a dedicated fan base.
Teams that really surprised me the most came in well below the norm even though every year you hear about their troubles with not being able to afford to bring in any free agent help. San Diego for instance, just traded away Adrian Gonzalez because there was no way they could afford him but last year they only spent 24% on player salaries. Even resigning Gonzalez to the type of deal he will demand would have kept them below league average for risk. Pittsburgh, who have been in the cellar of the National League for nearly 2 decades risked only slightly more on their payroll with 24.1% of revenue being spent.
Now I do realize that there are other factors coming into play, stadium costs, front office salaries, etc., however I find it interesting to see how little these teams are truly risking. Obviously their payrolls could never come close to those of the Yankees, Mets, or Red Sox but perhaps they could spend a bit more to bring in some veteran help to guide their young clubs. Also, San Diego performed quite well last season while risking very little, which serves as evidence that risking money isn't the only way to win. But for the worn down fans of teams like Pittsburgh it might help breathe life into a once great baseball city.
In answer to the question who is risking the most, one team stands well beyond the rest, Detroit. Last season they spend an unbelievable 65.3% of total revenue on their players. To add insult to injury they finished 3rd in the AL Central with a record of 81-81. Risking that kind of money I sure would want a better return than a .500 club who didn't make the playoffs.
What I found was actually a bit surprising. I looked at each teams salary and figured that as a percentage of total revenue. The mean for the league was 45.3% of revenue being spent on players salaries. Interestingly the Yankees with their huge payroll only come in slightly above average on there with a 46.8% rate. Being the team in the largest market with the largest fan base does pay dividends. Looking at some of the smaller market teams that are often considered to be paying beyond their markets I found that most fell pretty close to the 45.3% mark. Saint Louis for example came in at 47.9% showing that they really do have a dedicated fan base.
Teams that really surprised me the most came in well below the norm even though every year you hear about their troubles with not being able to afford to bring in any free agent help. San Diego for instance, just traded away Adrian Gonzalez because there was no way they could afford him but last year they only spent 24% on player salaries. Even resigning Gonzalez to the type of deal he will demand would have kept them below league average for risk. Pittsburgh, who have been in the cellar of the National League for nearly 2 decades risked only slightly more on their payroll with 24.1% of revenue being spent.
Now I do realize that there are other factors coming into play, stadium costs, front office salaries, etc., however I find it interesting to see how little these teams are truly risking. Obviously their payrolls could never come close to those of the Yankees, Mets, or Red Sox but perhaps they could spend a bit more to bring in some veteran help to guide their young clubs. Also, San Diego performed quite well last season while risking very little, which serves as evidence that risking money isn't the only way to win. But for the worn down fans of teams like Pittsburgh it might help breathe life into a once great baseball city.
In answer to the question who is risking the most, one team stands well beyond the rest, Detroit. Last season they spend an unbelievable 65.3% of total revenue on their players. To add insult to injury they finished 3rd in the AL Central with a record of 81-81. Risking that kind of money I sure would want a better return than a .500 club who didn't make the playoffs.
Tuesday, February 22, 2011
Watch Out For The Jays
Winning in the American League is never easy, especially when you are in the AL East with Boston and New York. A few years back Tampa Bay caught everyone by surprise when they took the division. However most still go into every season assuming the top two teams will be the Yankees and Red Sox. History has shown us that tends to be the case and they always have a ton of talent on their respective rosters.
Now I'm not going to say that the Blue Jays are poised to win the division this year but I will say they may come closer than most would think. The Yankees are an extremely dominant line up for sure but the loss of Andy Pettit and not landing Cliff Lee has hurt their rotation outlook. They are relying heavily on Sabathia to lead the way and for Burnett to rebound from last years struggles. Phil Hughes had a very impressive season last year but can he repeat it? He has all of the needed tools but can he continue to adjust to hitter who have seen him 3+ times and are familiar with his pitches.
Boston looks to be the favorite for the division with arguably one of the best pitching staffs in baseball. They added more pop to an already powerful lineup by trading for Adrian Gonzalez. That should improve the overall run production but they lost Adrian Beltre and Victor Martinez to free agency. Youkilis doesn't have nearly the defensive skill that Beltre did at the hot corner.
The Jays also made some moves this off season. They traded away Shaun Marcum, one of their best pitchers. The also moved Vernon Wells, and his enormous contract. The Wells move takes some power out of the batting order and that could slow them down. Set to replace him Rajai Davis doesn't have nearly the power but he does get on base at a pretty good rate and adds a lot of speed.
Marcum looks to be replaced by hot prospect Kyle Drabek. Drabek made an appearance last season and in 17 innings he looked respectable (ERA 4.76, K/9 6.35).
The Jays won 85 games last year, after trading away the best pitcher they had, Roy Halladay. They benefited in large part from Bautista putting together a remarkable season but all surprise teams will have some unforeseen element. They look to have a pitching staff this year that could contend with any, (Ricky Romero, Brandon Morrow, Brett Cecil, Kyle Drabek, and either Jesse Litch or Marc Rzepcynski). Last year those 6 combined for 655 innings and 554 Ks. Compared to most any team that is impressive it works out about a 7.6 K/9 which only 7 teams finished higher than last year.
If these young pitchers can perform near what they showed last season they could be a great rotation. The best way to beat teams with the power that the Yankees and Red Sox have is to strike them out, just ask the Giants. Last year they rode all the way to the World Series on the backs of young pitchers with high strike out rates. I don't believe that Toronto is set to win the division but if they are close they do have some money available to buy a piece or two late in the season if needed. They are one of only 2 teams in MLB to have a debt/value of 0 according to Forbes. So if this team is close come July watch out for potential surprise moves to push them forward into true contention.
Now I'm not going to say that the Blue Jays are poised to win the division this year but I will say they may come closer than most would think. The Yankees are an extremely dominant line up for sure but the loss of Andy Pettit and not landing Cliff Lee has hurt their rotation outlook. They are relying heavily on Sabathia to lead the way and for Burnett to rebound from last years struggles. Phil Hughes had a very impressive season last year but can he repeat it? He has all of the needed tools but can he continue to adjust to hitter who have seen him 3+ times and are familiar with his pitches.
Boston looks to be the favorite for the division with arguably one of the best pitching staffs in baseball. They added more pop to an already powerful lineup by trading for Adrian Gonzalez. That should improve the overall run production but they lost Adrian Beltre and Victor Martinez to free agency. Youkilis doesn't have nearly the defensive skill that Beltre did at the hot corner.
The Jays also made some moves this off season. They traded away Shaun Marcum, one of their best pitchers. The also moved Vernon Wells, and his enormous contract. The Wells move takes some power out of the batting order and that could slow them down. Set to replace him Rajai Davis doesn't have nearly the power but he does get on base at a pretty good rate and adds a lot of speed.
Marcum looks to be replaced by hot prospect Kyle Drabek. Drabek made an appearance last season and in 17 innings he looked respectable (ERA 4.76, K/9 6.35).
The Jays won 85 games last year, after trading away the best pitcher they had, Roy Halladay. They benefited in large part from Bautista putting together a remarkable season but all surprise teams will have some unforeseen element. They look to have a pitching staff this year that could contend with any, (Ricky Romero, Brandon Morrow, Brett Cecil, Kyle Drabek, and either Jesse Litch or Marc Rzepcynski). Last year those 6 combined for 655 innings and 554 Ks. Compared to most any team that is impressive it works out about a 7.6 K/9 which only 7 teams finished higher than last year.
If these young pitchers can perform near what they showed last season they could be a great rotation. The best way to beat teams with the power that the Yankees and Red Sox have is to strike them out, just ask the Giants. Last year they rode all the way to the World Series on the backs of young pitchers with high strike out rates. I don't believe that Toronto is set to win the division but if they are close they do have some money available to buy a piece or two late in the season if needed. They are one of only 2 teams in MLB to have a debt/value of 0 according to Forbes. So if this team is close come July watch out for potential surprise moves to push them forward into true contention.
Monday, February 21, 2011
Using the Past to Create a Future
I came across an article on mlb.com the other day that I really enjoyed. It was talking about new Pittsburgh manager Clint Hurdle and how he is embracing the history of the team to push for the future. In all of professional sports I don't think anyone can name a more beleaguered franchise than the current Pittsburgh Pirates, 18 consecutive losing seasons and last year losing more than 100 games again.
Clint Hurdle, like all team managers, is simply the middle man. His job is to take what the upper management gives him and get the most from the players. Middle management means you have to assume many jobs and many faces. One of the most important is the ability to get your employees to put forth their best effort and to believe they can succeed. Getting that message across can't be more difficult than it is in Pittsburgh right now. He has the daunting task of getting a young group of players to not just believe in themselves and their ability to perform at the major league level but to believe in the team, and the franchise behind them. Hurdle has to make them believe that the franchise will help them to become competitive.
Many of the players on the current roster were not even in grade school the last time the Pirates had a winning season. For them the team has been in the basement their whole lives. By taking the effort to not just learn the impressive history himself but forming a plan to show the players that history, Hurdle hopes to inspire hope and pride into the team. Showing them some of the great moments of the past to show them how great it can be for them and then telling them that he will lead them there. If the message sinks in I still feel the Pirates are a few years away from contention, but they may surprise some people.
Clint Hurdle, like all team managers, is simply the middle man. His job is to take what the upper management gives him and get the most from the players. Middle management means you have to assume many jobs and many faces. One of the most important is the ability to get your employees to put forth their best effort and to believe they can succeed. Getting that message across can't be more difficult than it is in Pittsburgh right now. He has the daunting task of getting a young group of players to not just believe in themselves and their ability to perform at the major league level but to believe in the team, and the franchise behind them. Hurdle has to make them believe that the franchise will help them to become competitive.
Many of the players on the current roster were not even in grade school the last time the Pirates had a winning season. For them the team has been in the basement their whole lives. By taking the effort to not just learn the impressive history himself but forming a plan to show the players that history, Hurdle hopes to inspire hope and pride into the team. Showing them some of the great moments of the past to show them how great it can be for them and then telling them that he will lead them there. If the message sinks in I still feel the Pirates are a few years away from contention, but they may surprise some people.
Thursday, February 17, 2011
The Market Will Balance
With a new season rapidly approaching much is being discussed about the contracts players signed over the course of the off season. Many teams added new faces to the mix, some payed big money to bring in key pieces to help them succeed. I seen a few articles that have placed the market value for a player at around $5 million per win they will give the team. Measuring how many wins a player is worth is not easy to do but I feel Fangraphs has done a pretty good job with their WAR ratings. If you place a market value on players of $5 million per WAR then it would stand to reason that the team must be making more than that for each win the team has. I looked up team revenues again to see how true this is across the league.
Using the revenues listed on Forbes team valuation tables what I found is that $5 million/ win is a very steep number to being paying. Looking at a few mid-market teams first I found they were averaging about $1.7-1.9 million in revenue for each win from 2000-2009. That puzzled me a bit at first but then I realized the mid-market teams don't set the price for players the big market teams do. So I looked at the Yankees figuring that they must be making at least that to handle the payroll they have. I was wrong. Even the Yankees don't make $5 million/ win. They come by far the closest of any team with their 2009 revenue coming in at $441 million and winning 103 games that year they made about $4.28 million for each win. However, that is the closest to $5 million they came. On realizing that not even the Yankees, who appear to have bottomless pockets to put a team together, can't bring in $5 million/ win I realized the importance of having a good farm system even more.
Upon further consideration what this brought to my attention was that even the Yankees have to keep players available to fill the roster that they can keep under their value. Phil Hughes comes to mind from last years team. He isn't even arbitration eligible but he won 18 games last year with an 4.19 ERA. Last season he only made $447,000.
The more important thing that this made clear to me is that teams can't continue to pay such high amounts for players. With a linear progression of the win to revenue values of the Yankees they will break the $5 million/ win plateau around 2013 in theory but the rest of baseball is well behind them. I believe that unless something changes player values may drop for the first time since free agency came into the league. In free markets their are always ebbs and flows so to speak and it looks like player value is about to ebb to correct itself as much as the players won't like it.
Using the revenues listed on Forbes team valuation tables what I found is that $5 million/ win is a very steep number to being paying. Looking at a few mid-market teams first I found they were averaging about $1.7-1.9 million in revenue for each win from 2000-2009. That puzzled me a bit at first but then I realized the mid-market teams don't set the price for players the big market teams do. So I looked at the Yankees figuring that they must be making at least that to handle the payroll they have. I was wrong. Even the Yankees don't make $5 million/ win. They come by far the closest of any team with their 2009 revenue coming in at $441 million and winning 103 games that year they made about $4.28 million for each win. However, that is the closest to $5 million they came. On realizing that not even the Yankees, who appear to have bottomless pockets to put a team together, can't bring in $5 million/ win I realized the importance of having a good farm system even more.
Upon further consideration what this brought to my attention was that even the Yankees have to keep players available to fill the roster that they can keep under their value. Phil Hughes comes to mind from last years team. He isn't even arbitration eligible but he won 18 games last year with an 4.19 ERA. Last season he only made $447,000.
The more important thing that this made clear to me is that teams can't continue to pay such high amounts for players. With a linear progression of the win to revenue values of the Yankees they will break the $5 million/ win plateau around 2013 in theory but the rest of baseball is well behind them. I believe that unless something changes player values may drop for the first time since free agency came into the league. In free markets their are always ebbs and flows so to speak and it looks like player value is about to ebb to correct itself as much as the players won't like it.
Wednesday, February 16, 2011
Cards and Pujols Fail to Reach Deal
Reading through all of the articles and analysis on the issue I have noticed that a few key things aren't really being mentioned. Everyone seems to be in agreement that Albert Pujols is, without question, the best player in the game right now. The debate seems to be over whether the Cards are holding out and just not willing to pay him what he is worth or if Pujols is being greedy. I think both of those statements are a bit narrow minded.
As I discussed in the post Labor and Capital each player has a value of skills and their demands are based on how easily those skills can be replaced with other players. With that thought in mind it is not a logical conclusion that Pujols is being a greedy SOB. If the rumors are correct and he is asking for a top 5 MLB salary, some where between $25-$30 million, he is just in doing so. No other player in the history of professional baseball has done as much as he has in their first 10 years. He very well could progress to become the best player of all time. If he continues at this rate even with considerations for decline with age, his name will belong with Babe Ruth, Hank Aaron and Mickey Mantle.
On the flip side of that, the Cards not offering a $25+million/ year contract doesn't mean they are being cheap. Looking at the city of St. Louis it is amazing they can afford as much as they can, but their fan base is extremely loyal and strong. However to promise Pujols that kind of money would be a major burden on their finances, where they already seem to pay beyond what their market should be able to support. According to Forbes last year the Cards had a revenue of $194 million. That is just revenue, not profit. That is before taking out the $109 million in player contracts and bonuses payed out last year, before figuring in stadium upkeep, etc. Based on those figures if they where to pay him that kind of money that would be roughly 13% of all money they brought in last year. From a business stand point that doesn't make much sense.
So to me the question isn't is Pujols being a greedy jerk. It also isn't are the Cards being too cheap with the face of their franchise. The question is, how much risk should a team be willing to tie up in one player?
As I discussed in the post Labor and Capital each player has a value of skills and their demands are based on how easily those skills can be replaced with other players. With that thought in mind it is not a logical conclusion that Pujols is being a greedy SOB. If the rumors are correct and he is asking for a top 5 MLB salary, some where between $25-$30 million, he is just in doing so. No other player in the history of professional baseball has done as much as he has in their first 10 years. He very well could progress to become the best player of all time. If he continues at this rate even with considerations for decline with age, his name will belong with Babe Ruth, Hank Aaron and Mickey Mantle.
On the flip side of that, the Cards not offering a $25+million/ year contract doesn't mean they are being cheap. Looking at the city of St. Louis it is amazing they can afford as much as they can, but their fan base is extremely loyal and strong. However to promise Pujols that kind of money would be a major burden on their finances, where they already seem to pay beyond what their market should be able to support. According to Forbes last year the Cards had a revenue of $194 million. That is just revenue, not profit. That is before taking out the $109 million in player contracts and bonuses payed out last year, before figuring in stadium upkeep, etc. Based on those figures if they where to pay him that kind of money that would be roughly 13% of all money they brought in last year. From a business stand point that doesn't make much sense.
So to me the question isn't is Pujols being a greedy jerk. It also isn't are the Cards being too cheap with the face of their franchise. The question is, how much risk should a team be willing to tie up in one player?
Tuesday, February 15, 2011
MLB Cities and Median Houshold Income
City Population Median
Household
Income
New York 8,391,000 $50,000
Los Angeles 3,831,000 $48,600
Chicago 2,851,000 $45,700
Houston 2,257,000 $42,900
Phoenix 1,593,000 $47,000
Philadelphia 1,547,000 $37,000
San Diego 1,306,000 $59,900
Dallas 1,299,000 $39,800
Detroit 910,000 $26,000
Minneapolis/ St Paul 666,000 $45,500
St Louis 356,000 $34,800
San Francisco 815,000 $70,700
Boston 645,000 $55,900
Baltimore 637,000 $38,700
Seattle 616,000 $60,800
Denver 610,000 $46,400
Milwaukee 605,000 $34,800
Washington, DC 599,000 $59,200
Atlanta 540,000 $49,900
Kansas City 482,000 $42,000
Miami 433,000 $28,900
Cleveland 431,000 $24,600
Oakland 409,000 $51,400
Tampa / St Petersburg 587,000 $41,600
Cincinnati 333,000 $32,700
Pittsburgh 311,000 $37,000
Aneheim 387,000 $55,100
Toronto 2,503,000 $59,000
Toronto 2,503,000 $59,000
Also keep in mind the household income numbers are for the median income not the average.
Information here was found at www.city-data.com
Saturday, February 12, 2011
Labor and Capital
In looking at the Moneyball philosophy it's easy to see how these two factors can shape a baseball team. Using them effectively can be the difference in a successful team and a perennial loser. One of the many things that, in my opinion, makes baseball such a fun sport to watch is the fact that there is no salary cap and therefore each team has a very unique financial situation. Each team has different assets to work with and different markets to try and produce revenue from.
Since the introduction of free agency in the 1970s teams have had to work much harder to find and keep talent. Rare is the player who will spend his entire career with a single club. There are a number of reasons for that and not all of them are surrounded by pure greed. Just like with any worker baseball players want to be paid a fair amount for the skills they provide. Working in construction or at a factory the more difficult the skills for a particular job are typically means the higher the workers who do that job are paid. The same is true in many ways for baseball players. What many people view as pure greed from players demanding 10s of millions of dollars to play is really no different than an electrician offering his services for $20-$30/hr.
The skills that draw the biggest paycheck change from year to year in baseball just as they shift over time in the general work force. A player who has the rare ability to hit 50+ HR will draw more fans to games and help produce more wins for a team than a player with similar other statistics and less power thus he is a more valuable commodity, just as a surgeon is more rare than a physician. Determining the exact value of different skills is not easy but there are numerous formulas that exist and agents and general managers spend countless hours attempting to find the systems that best fit their needs. That is what makes agents like Scott Boras so good at what they do.
In addition to finding the best system for determining value each team has to establish, in their market, how much they can afford to pay. In many ways that is the greatest strength of the Yankees, they have a huge market and large amounts of revenue each year to use to keep the level of talent on their team high. Keeping a top notch product on the field keeps fans in the seats and cycle can continue, in theory.
The beauty of MLB's lack of salary cap is that each team has a different amount of money tied up in players. Teams like Oakland have proven however, that the lack of large bank accounts doesn't mean you can't win games. The creative use of the capital is of equal if not greater importance to the amount of capital used or available.
Since the introduction of free agency in the 1970s teams have had to work much harder to find and keep talent. Rare is the player who will spend his entire career with a single club. There are a number of reasons for that and not all of them are surrounded by pure greed. Just like with any worker baseball players want to be paid a fair amount for the skills they provide. Working in construction or at a factory the more difficult the skills for a particular job are typically means the higher the workers who do that job are paid. The same is true in many ways for baseball players. What many people view as pure greed from players demanding 10s of millions of dollars to play is really no different than an electrician offering his services for $20-$30/hr.
The skills that draw the biggest paycheck change from year to year in baseball just as they shift over time in the general work force. A player who has the rare ability to hit 50+ HR will draw more fans to games and help produce more wins for a team than a player with similar other statistics and less power thus he is a more valuable commodity, just as a surgeon is more rare than a physician. Determining the exact value of different skills is not easy but there are numerous formulas that exist and agents and general managers spend countless hours attempting to find the systems that best fit their needs. That is what makes agents like Scott Boras so good at what they do.
In addition to finding the best system for determining value each team has to establish, in their market, how much they can afford to pay. In many ways that is the greatest strength of the Yankees, they have a huge market and large amounts of revenue each year to use to keep the level of talent on their team high. Keeping a top notch product on the field keeps fans in the seats and cycle can continue, in theory.
The beauty of MLB's lack of salary cap is that each team has a different amount of money tied up in players. Teams like Oakland have proven however, that the lack of large bank accounts doesn't mean you can't win games. The creative use of the capital is of equal if not greater importance to the amount of capital used or available.
Sunday, February 6, 2011
A Change in the Game
Around the time of the Civil War in America the game of baseball was invented. Since that time many events have taken place that have helped it evolve into the game that we know today. In the 1870s the box score was first created as a way to attempt to measure each player’s contributions to the game. In the 1890s a professional league was put together to try and put the best players together to play against one another. In the 1910s a young pitcher named George Herman Ruth was moved to right field so that he could bat more often. As a result, he hit more home runs than any one believed was possible. In the 1960s Bob Gibson pitched so dominantly that they lowered the pitching mound in an attempt to make things more competitive. Throughout the 1990s players hit home runs at a rate that seemed impossible, setting records or coming close, nearly every year. In 1998 Billy Beane took control of the Oakland Athletics and changed the way players were evaluated. What he created in Oakland was a system that could turn the fortunes of the poorer teams; a way to minimize risk and maximize returns on investments in players. His “money ball” philosophy is the best way to approach team construction to maximize potential revenue and bring parity to a seemingly uneven business market that is Major League Baseball.
When placed in context with some of the great events that have shaped baseball through the years Billy Beane’s influence is seemingly small. However, over the next few years it is likely to continue to grow into one of the turning points of the game. Keeping in mind that Major League Baseball and the teams that make it up are all businesses and their ultimate goal is to produce measurable profit, what Beane started is truly revolutionary. His “money ball” system of scouting and trading for players has brought balance to a sport that has no salary cap and extreme differences in the amount of capital different teams have available. This saber metric approach allows teams with limited monetary resources to compete with the wealthiest teams on an even keel. It reduces the risk involved with putting a team together and allows for the opportunity to significantly improve profits for all teams. Instead of simply being a question of who can buy the best talent now the question is becoming who can find the most undervalued skills in the market.
Before we can explore the reasons why this is the best way to build a team, one must first look at how this approach came into existence. Billy Beane didn’t invent the idea of saber metrics. Many consider Bill James to be the father of the science that he defined as, “… the search for objective knowledge about baseball,” (Garbiner). James began publishing his personal studies of baseball statistics and their inability to capture the whole truth in the late 1970s. What James was trying to find was a way to measure each player's performance and how it influenced the game. He spent hours looking over box scores and finding the areas that they didn’t tell the whole story of what took place on the baseball field. He began developing his own statistics and new formulas for statistics to attempt to produce a more accurate numerical measure of what had taken place in each game and throughout a season (Smith). Through his Baseball Abstracts he came in contact with a large number of individuals who shared his interest, many of whom were mathematicians or statisticians by profession and thus opened more opportunities for the growth of their inquiry.
The quest to find objective knowledge and statistical explanations for the things that took place on the baseball fields continued to grow and baseball continued to be run by people who didn't look at this information. Michael Lewis explains that in the 1980s some of James' friends put together a company to collect statistics and sell it to major league teams so that the teams could use this valuable information. The teams showed little interest in their findings. As a result Stats inc. had to start selling their information to the journalists that covered the sport in order stay in business (Lewis).
Billy Beane, according to Michael Lewis, first discovered these statistical ideals while working as a scout for the Oakland Athletics (Lewis). He was taken aback by the wealth of knowledge one could gain by simply looking at the numbers. As he worked his way into the role of General Manager his adoration of this new science grew. When he was eventually promoted to the role one of his first moves was to hire an assistant. He went against all the conventional wisdom of baseball and hired an Ivy League economics major instead of someone who had been around the game. He and his new assistant began to implement a new system of scouting and evaluating players. They used their minimal payroll to put together some very successful teams in just a few years.
The conventional wisdom in baseball, up until Billy Beane came onto the scene in the late 1990s, was that teams needed to be built by people who had played and worked around the game. The idea was that former players and individuals who had spent their lives watching the game could see the signs of what a young, undeveloped player could become. Teams sent scouts out to watch young players and analyze what they saw the player do. The idea of approaching the construction of a baseball team from an analytical and businesslike approach was not commonly accepted around the Major League Baseball world but teams soon started to take notice. Within less than a decade, a number of Beane's assistants and staff were being offered jobs with other teams around the league. As the philosophy spread, baseball began to shift into two factions. The “old school” of teams who promoted people who had played the game and used traditional scouting to evaluate players and the “new school” of statisticians who looked simply at the numbers those players produced. Even teams from larger markets began using some of these ideas to attempt to save money.
The market differences that exist in Major League Baseball are large and easily visible. There are specific rules in place that won’t allow a team to be moved or created within the vicinity of other teams to protect the market that is already established by the current team. These rules exist to protect the main revenue sources that teams have: the fans. With no salary cap in the league this creates a seemingly uneven field for competition between the teams. Teams that are located in larger cities like New York City have a much larger opportunity to get fans and therefore a much larger opportunity to make money. By using this to their advantage teams like the Yankees have managed to separate themselves from the others by spending more money than others can afford to put a winning team on the field each year. Producing a winning team draws more fans and therefore the cycle logically would keep pushing them further away from the remainder of the league. But that isn’t exactly the way it has worked.
When we start to look at the effects that Beane's philosophy had, the most logical place to start is to look at the win/loss records of the team. In 2001, just a few years after he took over in Oakland, the team finished 102-60, securing themselves a place in the playoffs. Moving forward, in 2004 Oakland played to a record of 91-71, missing the playoffs but still a great record for the year. They continued to implement their new ideas, but in 2007 dropped to a 76-86 record. The Yankees, in those years, continued their pay high style and in 2001 finished 95-65, in 2004 101-61, and in 2007 94-68. The Yankees numbers are more consistent through these years. However, when we look at the payroll difference, the records are a bit less impressive. In 2001 the Yankees had a team payroll to start the year (according to Forbes) of $112.28 million while the As started the season with a salary of $33.8 million (Forbes). That year, the As won more games than the Yankees with less than 1/3 of the payroll. By using his statistical approach to putting a team together Beane had minimized his potential loss while still finding success on the field.
Although the Yankees have had consistent success throughout the years in winning percentage, they haven’t dominated at a rate that matches the amount of money they spend. More importantly, their profit margin is not growing at nearly the rate that it should be for the amount of money spent. The return on their investment is in fact quite a bit smaller than that of Oakland. Oakland puts a team together with the least possible payroll because they are in a very difficult market in which to make large sums of money. The city is not that large and it is economically challenged over all. Due to these circumstances, they have to approach the process of team construction more carefully than many other teams. When Billy Beane took over they began showing improvement, not just on the field but also in the profit margins. The differences in resources are quite evident by simply comparing the team salaries for the year 2010. Forbes magazine put together a database of each team's payroll for the year that shows the New York Yankees as the top spender with $206.3 million in opening day salary
and the Oakland As coming in 28th over all with an opening day payroll of only $51.6 million (Forbes). Based on their salaries, the Yankees should have dominated teams like Oakland and finished with a much better record. But at season end the Yankees only produced 14 more wins than the low paid Oakland team.
Wins and losses are one of the easiest ways to see if a system is working but it fails to tell the whole story. The goal, after all, isn't simply to win games but to produce revenue. To look at comparisons of revenue we have to go back a bit further since current year's revenue totals have not yet been released. In 2004 the New York Yankees had a team payroll, according to The Biz of Baseball, of $184.19 million and the Oakland As of $59.42 million (Biz of Baseball, n. pg.). Forbes lists and publishes team valuations tables that include team revenue. For the 2004 season the Yankees had $238 million and the As, $110 million (Forbes, n. pg.). What those numbers show us is that while the Yankees had much higher gross revenue their return on their investment was only 129% where the A’s return was 185%. That is a huge difference regardless of the overall numbers. What this shows us clearly is that the As in 2004 had a much safer and better return on their investment. The amount of return received with only 32% of the salary is easily viewed here and almost as an exclamation point on the season the Yankees won 101 games, only ten more than Oakland who finished second in their division.
One season, of course, doesn’t tell the whole story. It’s simply a snapshot of the big picture. To look a bit deeper into the issue we can look at the same revenue verses team salary comparisons in other years. In 2007, again from the Forbes database, New York had a payroll of $189.25 million on opening day and revenue listed at $302 million (Forbes, n. pg.) which comes to a rate of return of 159% much better than in 2004. In the same year, Oakland opened, according to Forbes, with a payroll of $79.36 million and had their revenue reported as $146 million, (Forbes, n. pg.) a rate of return of 183%. Nearly as good as the 2004 season. By looking at these seasons it appears quite clear that other factors, such as team debt, removed the “money ball” philosophy of team construction outperforms the “spend big” philosophy where it really matters, in the revenues column.
As the rest of baseball works to implement the new ideas that Billy Beane brought to the table they are more difficult to put into practice. Valuation of skills has shifted drastically over the last few years and in large part because of the success that Oakland had in the first part of the decade. The more teams that start using this philosophy the more difficult it becomes to find the skills that are still undervalued and can help you to win games. Michael Lewis compared what Beane was doing to the stock traders who went after derivative stocks in the 1990s to create huge returns (Lewis, 237). In the same way as in the stock market, the price of investments shift and as more people catch on to what is being done, the more difficult it becomes to implement the strategy. Also, just as in the stock market, no one skill or stock will stay undervalued forever, eventually it will come back to its true value.
The advantage that the Yankees have held since the early years of Major League Baseball seems to be getting smaller. Simply being able to out-spend the competition is no longer enough to guarantee success. As teams like the Boston Red Sox also adopt Beane's philosophy and have a budget near that of New York it presents an even larger challenge for other teams to compete with. The advantage that these large budget teams now have is the ability to drive up the price on skills to a point that the smaller budget teams can no longer afford. The constant challenge presented to teams of being able to put together a winning ball club at an affordable price involves being able to not just analyze which skills are currently of benefit but which ones are available at a price a team is willing to pay. At the time when the book Moneyball was written the main skill looked at by Beane and his staff was the OPS, on base plus slugging percentage (Lewis). Now it seems to change every year due to more teams implementing these philosophies. According to Cameron the current trend with teams using the “money ball” philosophies is to go for defensive skill over offensive (Cameron).
The current state of the United States economics forces businesses to look more closely at their risk management practices. Businesses of all types are looking back at their strategies and assessing their effectiveness. In the world of professional baseball this is just as true as in any other professional realm. Teams are looking at their spending habits and deciding if they have been using their money efficiently. As they look over their reports, there is little doubt that in addition to looking at the effectiveness of their spending they are going to look specifically at areas where they can reduce costs. Cuts have been and will continue to be made in many areas of the operations that make up the team. One of those areas will inevitably be in player salaries. As teams begin to attempt to reduce costs for players the strategies introduced by Beane will become more widely used. The revenue differences mentioned earlier aren't exclusive information. They are available to the public and it is certain that executives from all teams that make up Major League Baseball have looked at similar numbers. The broader realization of the efficiency of the system will feed its spread throughout the league.
Although teams like the Yankees will most likely continue to push the prices of various skills higher year after year, the effectiveness of their strategy will lessen over time. The Yankees' dominance over the last century is without question. They posses the most World Series titles of any team and have managed to build a fan base that stretches well beyond the borders of New York. Many other teams have attempted to win in the same way as the Yankees, by buying the biggest names available no matter the cost, but most have failed and have lost most of the invested money doing so. The system introduced by Beane is one that all teams can implement and the financial risks involved are minimal. Teams using these ideas are showing success that was previously viewed by many as impossible. Just as the American dream is based on the idea that any one has the opportunity to become a success, the “money ball” philosophies create that reality in the world of baseball.
The spread of its uses will be accelerated by the recession and over time it will be implemented and used by the vast majority if not all of the teams in Major League Baseball. In years to come Beane's ideas will become known as one of the major turning points of the game. Perhaps not as visible as Babe Ruth's home run records, but just as important.
Works Cited
Cameron, D. The new “moneyball” approach. Retrieved from Fangraphs.com 28 December 2009. http://www.fangraphs.com/blogs/index.php/the-new-moneyball-approach/
“Forbes’ MLB Revenue List Draws Ire from Some Teams.” Sports Buisness Daily. Street & Smith’s Sports Group, 18 May 1999. Web. 21Sept.2010. <http://www.sportsbusinessdaily.com/article/24735>.
Grabiner, David. “The Sabermeteric Manifesto.” baseball1.com. N.p., 12 Jan. 2010. Web. 21 Sept. 2010. <http://baseball1.com/bb-data/grabiner/manifesto.html>.
Lewis, Michael. Moneyball. New York City, NY: W. W. Norton & Company, Inc., 2004. Print.
“MLB Team Valuations 2010.” Forbes.com. Forbes.com Inc., n.d. Web. 21 Sept. 2010. <http://www.forbes.com/lists/results.jhtmlpassListId=33&passYear=2005&passListType=Misc&searchParameter1=unset&searchParameter2=unset&resultsStart=1&resultsHowMany=30&resultsSortProperties=-numberfield2%2C%2Bnumberfield1 &resultsSortCategoryName=Current+Va>.
Smith, K. Number cruncher: When it comes to baseball statistics Bill James wrote the books. Globe Newspaper Company 30 March 2006 http://www.boston.com/sports/baseball/redsox/articles/2006/03/30/numbers_cruncher/
Monday, January 31, 2011
Factors of Production: Land
In looking into how each of the factors of production relate to the industry of Major League Baseball, land is one of the most important. Without land you can't have ball parks. Without ball parks you can't play games, and without games you don't have a league. The amount of land each team needs depends on many different things. Each team exists in a unique market and has to make choices based on their particular situation.
In the last couple of seasons much has been said about he need of the Florida Marlins to build a new stadium and they are finally doing so. By building a new stadium with a retractable roof the hope is that it will increase the number of fans that attend their home games thus increasing revenue. Before they finally got approval and funding sorted out to build their new park they had to ask themselves a lot of different questions. First where to build the stadium. The Marlins, like all Major League teams, are located within a large city. Property in cities like Miami, FL. doesn't come cheap and just because you have the money doesn't always mean that the land is available. For this reason they are building their new park further away from the downtown and tourist heavy areas in Miami. They are gambling that enough people will be willing to drive away from the tourist heavy areas to come watch a baseball game.
After finding the space with which to build the park they have to ask themselves how many people do they think will be willing to come to games. They have to make certain to put enough seats in the stadium to accommodate all the fans willing to pay for tickets but not so many that they can't sell seats. Cleveland faced the later problem with their Cleveland Municipal Stadium. They had room to seat more fans than any other park in MLB but couldn't sell enough seats to pay for upkeep. Each team has to look at their situation and decide not just how many seats to put in but how much to sell them for in order to pay for upkeep and make a profit. This prediction is a matter of guessing how much the demand will be for those seats based on how many seats are being supplied. If you have more seats then you can sell each ticket for less money but with less seats you can increase the price a bit and make more per seat. Establishing where the perfect balance lies is an ongoing process that each team faces year to year and game to game.
Parking lots, practice areas and office spaces all have to be accounted for as well. With out gaining access to large amounts of land in highly urbanized areas no team would be able to get their product to their customers, the fans. The main source of revenue for most every team is based on attendance and without not just the park to play the games in but the land needed to grant access to the games making any profit would be impossible. So when thinking about buying ticket to a game keep in mind that each ticket you buy is in part helping to pay for the land needed to put that game on.
In the last couple of seasons much has been said about he need of the Florida Marlins to build a new stadium and they are finally doing so. By building a new stadium with a retractable roof the hope is that it will increase the number of fans that attend their home games thus increasing revenue. Before they finally got approval and funding sorted out to build their new park they had to ask themselves a lot of different questions. First where to build the stadium. The Marlins, like all Major League teams, are located within a large city. Property in cities like Miami, FL. doesn't come cheap and just because you have the money doesn't always mean that the land is available. For this reason they are building their new park further away from the downtown and tourist heavy areas in Miami. They are gambling that enough people will be willing to drive away from the tourist heavy areas to come watch a baseball game.
After finding the space with which to build the park they have to ask themselves how many people do they think will be willing to come to games. They have to make certain to put enough seats in the stadium to accommodate all the fans willing to pay for tickets but not so many that they can't sell seats. Cleveland faced the later problem with their Cleveland Municipal Stadium. They had room to seat more fans than any other park in MLB but couldn't sell enough seats to pay for upkeep. Each team has to look at their situation and decide not just how many seats to put in but how much to sell them for in order to pay for upkeep and make a profit. This prediction is a matter of guessing how much the demand will be for those seats based on how many seats are being supplied. If you have more seats then you can sell each ticket for less money but with less seats you can increase the price a bit and make more per seat. Establishing where the perfect balance lies is an ongoing process that each team faces year to year and game to game.
Parking lots, practice areas and office spaces all have to be accounted for as well. With out gaining access to large amounts of land in highly urbanized areas no team would be able to get their product to their customers, the fans. The main source of revenue for most every team is based on attendance and without not just the park to play the games in but the land needed to grant access to the games making any profit would be impossible. So when thinking about buying ticket to a game keep in mind that each ticket you buy is in part helping to pay for the land needed to put that game on.
Sunday, January 30, 2011
Introduction
I am an economics major in college currently and a huge baseball fan. I have used baseball to help teach me many of the details and concepts covered in my economics courses thus far and have managed to gain a much better understanding of the game because of this. Looking at economic theory presents many questions about why industries and businesses choose to do things the way they do. I have looked to baseball often to try and find some of these answers.
I have found it to be an excellent resource for further understanding because of the fact that so much of it is made public. From stadium expenses to payroll and revenue nearly everything done on the business side of the game is made available with a little searching. If your are compelled you can find information about all of it. Through the amount of information that can be gained so easily you can begin to explore and further understand many of the choices that are made by different teams and the league itself.
I don't claim to be an expert on the subject, just a student. However I have found it fascinating how easily the basic principals of economics can be seen and explained by simply looking at the game and how it is run.
My intention is beginning this blog is multi-purposed. I hope to perhaps help others gain a better understanding of economic theory and laws by explaining how they apply to baseball. Second I hope that perhaps publishing some of my thoughts and opinions on these matters will put me in touch with others who can help me learn from their experience or shed more light on issues that I am still learning.
I also realize that there are other webpages available that offer tons of information about the various aspects of business topics in professional sports. I hope only to contribute to what is already available and offer my opinions.
I hope that people enjoy what I have to say. I will be working on a series of articles on the factors of production and their relationship to the game and hopefully getting them posted quickly. Thanks.
I have found it to be an excellent resource for further understanding because of the fact that so much of it is made public. From stadium expenses to payroll and revenue nearly everything done on the business side of the game is made available with a little searching. If your are compelled you can find information about all of it. Through the amount of information that can be gained so easily you can begin to explore and further understand many of the choices that are made by different teams and the league itself.
I don't claim to be an expert on the subject, just a student. However I have found it fascinating how easily the basic principals of economics can be seen and explained by simply looking at the game and how it is run.
My intention is beginning this blog is multi-purposed. I hope to perhaps help others gain a better understanding of economic theory and laws by explaining how they apply to baseball. Second I hope that perhaps publishing some of my thoughts and opinions on these matters will put me in touch with others who can help me learn from their experience or shed more light on issues that I am still learning.
I also realize that there are other webpages available that offer tons of information about the various aspects of business topics in professional sports. I hope only to contribute to what is already available and offer my opinions.
I hope that people enjoy what I have to say. I will be working on a series of articles on the factors of production and their relationship to the game and hopefully getting them posted quickly. Thanks.
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