## Payroll and Wins

Over at the Wages of Wins, Stacey Brook discusses the issue of payroll and wins in baseball. I’m surprised at how many problems people are having with an argument that they make in their book: payroll is not the largest determinant of wins. Using data from 1988-2006, Brook reports that payroll differences explain approximately 18% of the variance of wins across teams. This result come from regressing wins on a measure of relative payroll. Now the point is that if 18% is responsible, then 82% of other stuff is playing a bigger role. It seems pretty straight forward, but some people are getting caught up in the argument. Let me clarify a few things.

An R2 of .18 does not mean that there is no correlation between payroll and wins. Quite the opposite. There is strong and statistically significant correlation. In fact, the authors make this quite clear in the book. The coefficient on salary is statisitically significant. However, the point is that sum of other factors appear to be more important. The results indicate it’s quite a stretch to say that success on the field is a product of financial determinism.

Using data on salaries and wins from 1985-2006 I estimated the impact of payroll on wins using linear regression, while correcting for a few problems in the data. I used the percent difference of a team’s salary from the league mean to account for different values of players over time. Also, I used year dummies to capture influence of individual seasons. The result: every 10% above the mean in payroll is worth about 1 win, and salary explains about 17% of wins. These estimates conform to what the WoW authors find: a majority of the explanation is determined by factors other than salary. However, let’s take it a bit further. Having a payroll of one standard deviation (34%) above/below average is associated with 3.4 more/less wins. Is that a lot? Well, let’s see how well it predicts.

Below is a table of the percentage salary differences from the mean by franchise from 1985-2006 (excluding 1994). The table includes the average wins, the regression predicted wins above average (based on the 10% ==> 1 win prediction) and the actual wins above average. To me, the data indicates a trend, but not a strong one. For example, the Royals have spent a little less than average, but they’ve lost a lot more than average. The Braves have spent more than average, but won more above the average than predicted.

Club	Wins	% Diff	Pred.	Actual
ANA	82.05	9.93	0.98	1.05
ARI	80.89	13.30	1.31	-0.11
ATL	87.19	28.36	2.79	6.19
BAL	75.81	10.11	0.99	-5.19
BOS	86.67	33.68	3.31	5.67
CHC	77.38	11.15	1.10	-3.62
CHW	82.86	-7.53	-0.74	1.86
CIN	80.52	-8.62	-0.85	-0.48
CLE	80.33	-8.11	-0.80	-0.67
COL	74.77	-6.66	-0.65	-6.23
DET	73.62	-8.95	-0.88	-7.38
FLA	76.15	-33.16	-3.26	-4.85
HOU	84.24	-4.18	-0.41	3.24
KCR	73.81	-12.41	-1.22	-7.19
MIL	75.43	-24.52	-2.41	-5.57
MIN	79.90	-26.08	-2.56	-1.10
NYM	84.05	27.73	2.72	3.05
NYY	90.24	70.35	6.91	9.24
OAK	86.81	-13.39	-1.32	5.81
PHI	77.48	-5.26	-0.52	-3.52
PIT	74.52	-30.87	-3.03	-6.48
SDP	78.43	-11.21	-1.10	-2.57
SEA	79.90	-7.15	-0.70	-1.10
SFG	84.24	3.87	0.38	3.24
STL	85.71	9.78	0.96	4.71
TBD	64.33	-38.87	-3.82	-16.67
TEX	79.38	-0.27	-0.03	-1.62
TOR	84.00	2.63	0.26	3.00
WSN	77.95	-36.49	-3.58	-3.05

This figure makes a similar point.

There is clearly a positive trend between average payroll and average wins, but it also shows a wide variance in performance outside the prediction. The points are not clustered closely around the line, and that is because other factors are affecting how teams perform. There is plenty of room for other factors to matter. That’s how the Marlins can compete for the Wild Card with \$15 million and the Mets can come in last with a \$90 million payroll. Just compare the Cubs and the A’s in the graph. Does money have an effect on winning? Yes, but that impact isn’t as certain as it’s widely believed to be. That’s the point. Winning isn’t as simple as spending.

Now, in an effort to offer full disclosure, let me say the following. I have met or corresponded with all of the authors of the book—we are economists working in the same field. The book was largely written before I met the authors, though I did check a fact for them right before the book went to press. I also gave the book a postive review in the International Journal of Sport Finance, as I really do like the book. If I thought they were wrong, I’d tell them. Heck, I’d write up my critique and submit it to the Journal of Sports Economics. I’d love the line on my vita. I’d also like to ask for politeness among those arguing. The tone of the response has been too harsh to be productive. If we are all after the truth, it’s best to keep things civil.

## Haunted: A Review of The Blind Side

Two weeks ago I spent a long weekend on a series of plane flights. On the recommendation of a friend I picked up The Blind Side by Michael Lewis just before I left. I had planned to read the book at some point, but I had too many other unread things in front of me. But, the book got a strong recommendation, so I went ahead. High expectations usually lead to disappointment for me, but this was not the case with The Blind Side. In fact, I find myself thinking about the book almost every day.

The book has two subjects: Michael Oher and left tackles, which come together very quickly. Michael Oher is a poor black kid from a Memphis housing project. Though”Big Mike” towers over nearly everyone around him, he’s shy an introverted. His mother is on crack, his father is dead. The foster care system doesn’t know where he is, and gave up looking. He’s one of many siblings living only on street smarts. As fate would have it, Oher was taken by a friend to Briarcrest Christian School on the other side of Memphis. Though his education was woefully lacking, the school took a chance on him. That’s where Oher meets Sean Tuohy.

Tuohy is a former Ole Miss basketball player who was able to sympathize with this young man, because he too grew up poor. He offered Oher some help, but it was his wife, Leigh Anne, who could get to know Michael better than anyone. A petite blonde who was a sorority girl cheerleader at Ole Miss, and the daughter of a racist father, makes him a part of the family. She defends him, pushes him, and loves him as her child. Oher is still at a huge disadvantage, but the Tuohys do all they can to give him the things most Americans take for granted.

In the early eighties, Lawrence Taylor was terrorizing NFL quarterbacks, and his play revolutionized the way the outside linebacker was used. Taylor’s favorite path to his prey was from behind. With the right-handed quarterback facing the right side of the field, Taylor would come from the left, where the quarterback couldn’t see him: the blind side. Even if Taylor didn’t make it to his destination, the fear of what might be there when Taylor was on the field was enough to cause quarterbacks to make poor decisions. The NFL is a copy-cat league, and soon others were emulating LT. As the Bill Parcell’s defense took over the league, Bill Walsh was spreading his offensive vision. Because Walsh needed the pass more than the run, pass rushers like Taylor could destroy them. Protecting the quarterback from the blind side rush was second in importance only to the quarterback himself. Correspondingly, the man in charge of having his QB’s back has become the second most highly paid football player in the league.

Michael Oher was born to play left tackle in the NFL, as the Tuohys soon find out. The boy who kept out of trouble by thinking he’d be the next Michael Jordan was being recruited by every big college program in the country. Though his grades weren’t good—how could they be?— and it takes some real knowledge of NCAA loopholes to get him into college, he ends up at the Tuohy’s alma mater, Ole Miss.

Whether Michael Oher will be all that he is projected to be has yet to be decided, but he’s at least on the right path. This is amazing considering his upbringing. The writing is up to Lewis’s usual standards, as he chronicles Oher’s journey towards the NFL. The story itself makes the book worth reading, but that’s not what’s keeping me awake at night.

Michael Oher lost a cruel lottery in life, and this kid isn’t alone. There are other kids out there who don’t get adopted by family willing to make him one of their own. Many don’t have the athletic gifts either. Even Michael’s own natural athletic talent would not have been able to get him out of his own situation. There was no one there to make him go to school, protect him from the bad, or comfort him when he failed. Michael Oher is a remarkable fellow, but without the Tuohys he’s probably not on a football field today. Sean and Leigh Anne realize that there are others like Michael out there, and say they want to do it again. This is what haunts me. Could I do that? There are plenty of excuses not to. I’ve got my own family to think of. I’m not as financially secure as they are. I don’t have the understanding that Sean had of a disadvantaged youth. But still I wonder, and this is what haunts me.

Aside from my own personal explorations, the book heightened my hatred of the NCAA. It’s time to cut this phony bologna that big-time NCAA athletics are about “student athletes.” That’s beyond bullshit, and the organization ought to be ashamed of itself. To read of the NCAA investigation of the Tuohys was maddening. They were investigated for guiding Michael to their alma mater. Because they were his guardians they could shower him with the comforts of life that their other children enjoyed—the most important being a loving family. Yet, the NCAA is concerned that this might be a recruiting violation. Soon there might be other rich folks scooping poor kids out of the ghetto to get their schools to a BCS bowl. SO WHAT?!!!! Is that really so bad? Shouldn’t the NCAA be encouraging this type of behavior, even though Lewis makes it pretty clear that recruiting was not on Sean Tuohy’s mind when he invited him into his home? Nah, that’s just their lot in life.

Why do we tolerate the scholar-athlete charade of the NCAA? Let the Michael Ohers of the world play football. Screw grades, screw class, and screw scholarships—pay these kids the money they are generating for these schools. It’s an outrage that this system operates as it does. I have hope that a few brave governors will one day join together and throw the NCAA out of their schools, pay their athletes…and maybe even have a football playoff. Americans wants to watch gifted kids play football, so let these kids do it and get paid for doing it. Sports economists have preached monopsony exploitation angle for years, but it just doesn’t sell. Michael Lewis humanizes the damage done by the NCAA. It might be the book’s single greatest attribute.

So, if you can’t tell, I liked the book. I suggest picking it up. Although, like me, you’ll probably end up watching a lot more Ole Miss football games with your eyes on the left side of the offensive line.

## RIP: Johnny Sain

Former Brave and Leo Mazzone mentor, Johnny Sain, died yesterday. I hope it is a comfort to know that he died as someone who mattered. My thoughts and prayers go out to the family

Addendum: Jeff Merron has some great interviews with Sain’s friends—Jim Bouton, Hal Naragon, Denny McClain, Mickey Lolich, and Leo Mazzone—over at The Southpaw.

## Kick Butt

I recently received a copy of the book Kick Butt, by my Sewanee colleague Don Huber. It’s a novel about a fictional athletic director at a college in the south. I haven’t had a chance to read it yet, but from glancing through it, Huber doesn’t present a sugar-coated portrait of big-time college athletics.

Don is an interesting fellow. He teaches Classics and used to earn a living as a songwriter in Nashville. If you’re looking for some holiday sports reading, you might want to check it out.

## Baseball Awards

Again, I find myself having to apologize for not posting. I actually had planned to be writing a lot this week, but a few things just fell in my lap. I’ve got a book review or two on the way, and I’m going to do some more season-in-review stuff soon. I promise.

So, for those of you who are checking in, I’m going to dole out my 2006 awards (see the Internet Baseball Awards at Baseball Prospectus).

NL
MVP: Albert Pujols – just ahead of Brandon Webb and Ryan Howard.
Cy Young: Brandon Webb – the second most valuable player in the majors.
ROY: Josh Johnson – edges out teammate Hanley Ramirez.
MOY: Tie, Everyone not named Joe Girardi – if you’re going to butt heads with your GM, make sure he’s not Larry Beinfest.
GMOY: Larry Beinfest – one of the best, who hasn’t gotten much credit for his work with a tiny budget.

AL
MVP: Travis Hafner – How good was Travis Hafner? So good that he beat out David Ortiz with 123 fewer plate appearances. And he didn’t even make the All-Star team.
Cy Young: Johan Santana – just edges out John Lackey.
ROY: Justin Verlander – the popular choice, Francisco Liriano, come in second.
MOY: Jim Leyland
GMOY: Tie, Terry Ryan and Mark Shapiro – Both put together good teams on small budgets. The Twins keep doing what they do. Cleveland played much better than their record. I’m looking out for a monster 2007 Indians squad.