Moneyball: Efficient?
Issue   |   Wed, 04/30/2014 - 00:30

Individual superstars matter less in baseball than in most other team sports. As opposed to basketball, where the addition of a single star player can alter the fortunes of an entire franchise, stud ballplayers impact their teams’ title chances much less.

Teams feel pressure from players, coaches, fans and the media to retain and obtain superstars, who are often overpriced or past their prime. The Detroit Tigers recently extended Miguel Cabrera’s contract for eight additional years and $248 million — with two years remaining on the eight-year $152 million contract he signed in 2008. The Tigers will be paying Cabrera into his late-thirties, and big, heavy players such as Cabrera almost universally age poorly.

The Tigers wanted to prevent Cabrera from reaching open market free agency and, in doing so, cost themselves two years of data that would better indicate Cabrera’s future performance down the road. However, booming income from new broadcast deals is leading to price inflation across the league — meaning that the value of Cabrera’s deal should increase as the average contract becomes more expensive. Nonetheless, as good as Cabrera curently is, the back end of his contract will be a substantial burden on the Tigers.

Baseball is littered with examples of teams overpaying for players. For teams without financial means approaching the level of the Tigers, Yankees and Dodgers (who are quickly out-Yankeeing the Yankees), the effects of these decisions can be crippling. Teams with a lot of money invested in aging players are restricted in trades and free agency.

Smart smaller market teams thus turn to other means of building a competitive roster. The most effective of these is the process of identifying market inefficiencies. After years of decrepitude, the Tampa Bay Rays became successful through the development and signing of young players to cheap, long-term deals. The Rays found that the baseball market overvalued established veteran production over unproven youngsters. However, despite lacking intangible experience, rookies often were able to replicate or exceed the performance of veterans at a fraction of the cost.

Today, players who provide league-average production are termed replacement-level. Any amount of production above replacement level (measured by Wins Above Replacement (WAR)) has a certain value dictated by the free agent market. While free agents receive X for a certain amount of production, young players are paid a much lower fixed salary.

The Rays found inefficiency in the way the market valued experienced and inexperienced players. Now, cost-controlled young players are coveted and recoup a lot of value in trades. In order to gain an advantage on the rest of the league, franchises can find and exploit inefficiencies before other teams begin to catch on.

Billy Beane, made famous by Michael Lewis’s “Moneyball” (and Brad Pitt), is the most obvious example of taking advantage of inefficiency. Beane was the first general manager in baseball to adopt statistical analysis as a means for determining player value. At the time, teams judged players based on scouts’ reports, and Beane discovered that scouts favored certain traits and overlooked others. He then targeted these characteristics — such as the ability to draw a walk or even just looking unathletic — and cheaply acquired players who exhibited them and were thus shunted by the baseball world.

The buttoned-up Ivy League stats guys contrasted heavily with the “baseball men” who made up a club of former players and managers. The Ivy Leaguers’ findings often contradicted baseball convention and miffed baseball purists. There was a constant clash between the two groups, but the effectiveness of Beane’s methods eventually won out.

Baseball is unique in that almost every aspect is quantifiable. Every pitch can be mapped, every ball off the bat categorized and every out charted. The individual player’s independent impact on a game can be identified quite easily — much more so than in most team sports. The most useful statistics describe this impact while ignoring white noise. For example, runs scored is helpful in telling how often a player scores. Runs batted in (RBI) shows how often a player drives in runs. However, it is important to remember that players need someone to drive them in. An inferior player at the top of a stacked lineup will score more runs than a better player in a worse offense. If there is no one to get on base in front him, a player’s RBI will be artificially low. Similarly, earned runs average (ERA) benefits pitchers in favorable ballparks with good defenses.

It’s important for the statistics to describe what the player is controlling, not what he benefits from. On-base percentage measures how often a player reaches base (including walks), which is more useful in normalizing runs scored than the actual number of runs scored is. The ISO stat isolates power by measuring the difference between slugging percentage and batting average. Fielding independent pitching (FIP) improves on ERA by attempting to neutralize ballpark factors and other variables outside the pitcher’s control. Some of these stats use simple formulas, while others ­— such as FIP — are more complex.

Most baseball insiders now believe that a true measure of player performance derives from a combination of statistical analysis and player scouting. In order to gain insight into a player’s less quantifiable facets, such as defense and base running, the data often needs more context.

Recent developments in the tools used to measure player performance reflect this. Every major league ballpark tracks every pitch thrown in every game. These pitches are stored and labeled for analysis. Balls in play are labeled by hit type (fly ball, line drive, ground ball, etc.).

Earlier this year, MLB’s Advanced Media department unveiled a new player tracking system. Cameras were to be installed in every ballpark measure speed and distance covered. The cameras plot player routes to balls in play as well as the most optimal (direct) route. They can also record movement around the base paths. Teams will have a sea of information to further inform their personnel decisions.

It seems as though the biggest market inefficiency currently lies in each franchise’s front office. General managers are relatively inexpensive (Theo Epstein, considered one of the brightest young GMs, signed with the Cubs for five years at $3 million per year) but have a massive impact on their franchise’s direction. A wave of young and analytical GMs has permeated baseball — a wave that includes several Amherst alums. These GMs are often able to take advantage of the less advanced front offices.

Front offices should be constantly seeking out and exploiting new inefficiencies, which requires unconventional and often controversial thinking. Teams such as the Pirates and Rays have shown how effective defensive shifts can be. In the future, with better tracking data, teams could look to position their best defenders in areas most likely to see action. A defensive star might play one at-bat in right field against a pull-heavy lefty and the next in left against a pull-hitting righty. When implementing a defensive shift, why not put your Gold Glove shortstop in the hole and hide your slow second baseman where the ball is unlikely to be hit?

The knowledge of how a defender reacts to different plays should impact how a team is set up. Diminishing the rigidity of positions would meet with heavy criticism from baseball purists, but could have a large impact on a team’s chances of winning.