You can’t use the numbers that way. The estimates are non-linear and the players who play this much tend to be above-average.  Also, I address the non-player assets that contribute to revenues in my previous book.  These are gross MRP estimates: I’m just trying to get in the ballpark.

On Krautmann’s paper. It’s good, and I think that his alternate MRP-estimation technique has merit. However, the Krautmann method has some weaknesses, the main one is that it assumes the free agent market is perfectly competitive. For various reasons, I don’t think it is right to assume that the free agent market represents a perfectly competative labor market, especially among lesser-talented players.  And if you assume that replacement players should be valued at the league minimum, as you do,  then the free-agent market is certainly not competitive. There are some other issues that may cause bias with estimates as well.  I don’t have time to get into them now. But, again I would like to stress that the Krautmann method is useful, and I have used methods similar to his before. I know and like Tony.

And now we get to the heart of the problem with this discussion . Just this past week, I have been writing up the pros and cons of the Scully and Krautmann methods. I don’t have time to stop and explain every time that you think you’ve found a new reason that I might be wrong.  I am writing up all the things that you want to know, and I’m not just whipping it out in a blog post.  I am using the blog to share bits and pieces of what I am doing.  And I hope you can see why am particularly irked when individuals keep inquiring about issues that I already commented on in my previous book.  If you’re not buying my estimates, feel free to move on.

8 * $16.7 million = $133.6 million

And 6 average starting pitchers:

6 * $14 million = $84 million

You have a shortfall in both PA and IP (which need to be filled with additional bench players and relievers, all of which would also have to be average to maintain the assumption of an average team), and you’re up to $217 million in marginal revenue for the average team. Forbes, in their most recent estimate of team revenues, gives us an average revenue value for an MLB team of only $183 million.

Even if we assume that Forbes is shorting MLB team revenue by over $30 million – that would mean that almost all of an MLB team’s revenues derived from player personell, and that a team’s efforts at marketing, scouting, player development, and stadium contruction or renovation are in fact counterproductive.

Well the average performance of a player with > 600 PAs is going to be quite good, because of sampling biases.  Can you either a) share what the average slash line is for players with over 600 PAs (or I guess I can go look this up) or b) share approximately what the MRP of a player with 700 PAs and a .260/.335/.410 line would be?

I just finished readng Krautman 1999 (“What’s wrong with Scully-estimates of a player’s marginal revenue product”) and he seems to share a similar concern with a lot of the rest of us – that MRP estimates derived using Scully’s model are larger than what we would expect given free agent salaries, and that it’s “difficult to believe that a bidding process as competitive as that associated with free agency could result in such large deviations between wages and MRP.” He then proposes a “Free Market Returns” approach that seems more similiar to the WAR-to-dollars conversion that Tom Tango uses than to what you’re doing with MRP.

Is there a reason that you chose the Scully MRP model over the Krautman FMR approach?

Sky,
This isn’t about selling a book, it’s about writing one. I cannot provide specific details because I am currently writing them up. It is many pages worth of material that I cannot share because they are in progress, too long to post here even after I’ve written them, and I do not own the  rights for distribution.

But, the main problem I see in the comments is not about the modifications that I have made to the model.  It is a lack of the general understanding  of the model, and that is available in my book . 

MRP is the additional revenue provided to the team by the player’s play on the field. It is his marginal physical product * marginal revenue.  Again, if you are having trouble with this concept, try Wikipedia. To see how hit applies to baseball, read Scully’s paper.

Think of it this way — the more we buy into your thoughts and think your system has merit, the more likely we are to buy your books.

I’d also REALLY like to know what the margin is in MRP. Can you give an estimated stat line or player name who is marginal in MRP. That is, someone with significant playing time with basically zero MRP?

It does for the Pirates

“2) My model is not wrong”

If every player who was better than Francouer in 2008 was paid a minimum of $4mm- I think the total would exceed MLB’s gross revenues…

I think the problem is that you do not understand the concept of replacement level – and instead simply say stuff like:
“It is a concept that adds nothing to our understanding of player value, and it causes people to believe that marginal players are worth the league minimum. I have explained why this is incorrect, and I have seen no argument to change my thinking on this.”

Anyway, the real question is whether or not Frenchy is realy as bad as he played in 2008. Obviously if they think Frenchy 2008 is the “real” one, who will be appearing in 2009/10… (like when the real Jim Presley apepared in 1988/89) then he’s not only not worth $4mm, he’s someone who should be DFA’d ratehr than be offered arbitration.