What are Managers Worth?

This was the question asked to me by Darren Everson of the Wall Street Journal for a story he was doing on Joe Torre’s $4.3 million per year contract. It’s a question that has interested me, and other economists, for some time. There are many inputs into winning, such as playing talent, medical treatment, coaching, and roster management. Managers have a large say in coaching and roster management, but separating these contributions from others is difficult. A manager who has good players may look good, a manager with bad players may look bad. But, do good teams win because of or despite their skippers?

Currently, I am working on a project to evaluate manager contributions. It’s a long way from completion, but I’ll report some preliminary findings. I looked at how hitters performed under different managers while controlling several relevant factors, such as inherent talent, aging, and ballpark effects. For Joe Torre, the main subject of Everson’s article, I did not find an impact that was significantly significant. In fact, no manager stood out as being particularly good or bad when it came to hitting. The best managers were Don Baylor, Dick Williams, and Davey Johnson. The worst were Bob Boone, Terry Collins, and Hal McRae. But, even at the extremes the impacts were not statistically significant.

Thus, Everson quotes my conclusion in the story.

“I think managers are a bit overrated in terms of the impact that they have on their players,” says J.C. Bradbury, an economist and associate professor at Kennesaw State University and author of “The Baseball Economist.” To make a team better, he says, “get better players.”

This does not mean that managers don’t serve an important function on teams. I think it is quite clear that managers are needed; however, if no manager is superior to any other, then why spend big money on manager with a good reputation like Torre?

A team might choose to spend big bucks on a manager is to signal to fans that the team is making a serious commitment to winning, which causes fans to pay attention and come to games. Managers like Lou Piniella, Dusty Baker, and Joe Torre are household names whose reputations as well-known public figures may combat fan outrage over a team’s previously poor performance. Also, these managers may also be adept at working with the media (Piniella and Baker have done a good bit of media work) and might be able to manage PR in a way that keeps more fans in tough times. This certainly can affect a team’s bottom line. Managers might also be able to recruit better players through free agency for less. My guess is that some players would be willing to take a little less to play for Torre.

4 Responses “What are Managers Worth?”

  1. David Gassko says:

    Hey JC,

    Sounds a lot like my study. How is it different?

    David

  2. JC says:

    I have not seen your study. Where is it?

  3. David Gassko says:

    The Hardball Times Annual 2008. I can send you the article if you’d like (but really you should buy the Annual!). It’s referenced repeatedly in the WSJ article you linked to.

  4. JC says:

    The study is mentioned in the article, but the article does not say that the study is in the Annual. I will take a look at it.