Archive for JC’s Book

Tigers–Marlins Blockbuster Is Win-Win

I’m surprised to see such a strong negative reaction from in the press about the Marlins trading away Miguel Cabrera and Dontrelle Willis. In particular, the former commissioner was a bit too vocal.

“The fans deserve better,” Vincent told West Palm Beach radio station ESPN 760. “I know that they’ve getting some money from the revenue sharing, the luxury tax and I’m very disappointed.

“Look, they let two wonderful players go and the question is, Why? I mean, Cabrera may be one of the most talented young kids in baseball. That’s very hard for the fans to accept.”

I don’t see this as a bad deal for the Marlins. No matter what size of market you play in, this is the type of move that good organizations make, and I think the Marlins are one of the best in the league (see Chapter 7 of my book). You give up two guys who are about to get very expensive, while your team is very young and you don’t plan to contend next year. Hence, you trade them to a contending team as their rights are expiring for a boatload of prospects. Isn’t this the exact type of deal you are supposed to make? One half of this blockbuster (Willis) was acquired as a prospect in a similar deal.

The Marlins continue their public belly-aching about their stadium situation, and for this I have little sympathy, but that is all it is and the media should ignore it. The team isn’t going to leave, and taxpayers are right not to build the team a new stadium.

This isn’t a fire sale, it’s a good baseball decision from a team that won the World Series just five years ago.

Valuing Kaz

Over the weekend, that Astros signed Kaz Matsui to a 3-year, $16.5 million contract
During the past three years he’s averaged $6.6 million per year in value. If we assume that he plays like this for the next three years, then his expected contract value is $19.8 million. (I’m not going to do the age and salary growth adjustments for a three-year deal.)

So, while most of the comments I have seen about this deal are negative, I don’t think it’s such an awful deal. Granted, it would have been nicer to get him for less, but I doubt that was possible.

Bookplates Update

Thanks to all of you who have requested signed bookplates. I put the first round in the mailbox this morning, and you should receive them in the next few days. I am still taking requests: just fill out this form.

I apologize for not being able to comment about the recent free agent signings yet. On top of heavy grading, which I anticipated, my car is in the shop and I have one sick daughter.

Valuing Cordero and Linebrink

The Milwaukee Brewers have lost two members of their bullpen in the free agent market: Francisco Cordero and Scott Linebrink. Both signed four-year deals, with Cordero going to the Reds for $46 million and Linebrink going to the White Sox for $19 million.

Once again, I am astounded at the dollars that teams are handing out to relievers. The contract for Cordero is simply awful. If the Reds are trying to be taken seriously by flashing some dollars, then flashing their money is all they are accomplishing. Cordero is an excellent reliever, but I don’t see how the Reds can justify spending $11.5 million/year for four years on a pitcher about to turn 33 for a team that doesn’t appear to be built for success in this timespan. Adam Dunn and Ken Griffey are gone after 2008 and Arron Harang and Bronson Arroyo are due big raises. I understand that there may be help coming from the farm, but I do not think that expectations are rosy enough to justify spending big money on a closer just yet. If the Reds put that money in other places, I believe the team would be more competitive in the near term.

Even if the Reds could use this final piece, I still think it’s a bad deal. I have Cordero producing $19.6 million over the next four seasons—$26 million more less than he’s being paid. Now, it’s pretty clear that my model isn’t predicting well for “closers.” And while I’m a believer in efficient markets and willing to acknowledge that I might be underestimating closer value, the current closer premium is excessive. And I think that Scott Linebrink’s contract supports my contention.

I have Linebrink’s four-year deal valued at $17.1 million—two million less than the salary he is actually getting, so it’s not too far off from my model. (I don’t like the signing either, because I don’t like signing relievers to long-run deals for other reasons.) However, my model estimates that Cordero is worth only about $2.5 million ($0.6 million/year) more than Linebrink. The main difference between the two pitchers is that Cordero normally pitches in the ninth, while Linebrink pitches in a set-up role. And even if I grant that the later innings have more impact on the outcome of the game than earlier innings, Linebrink’s value ought to be governed by opportunity cost, not where he’s pitched in the past. There are plenty of teams out there that could have picked up Linebrink and made him a closer. Though the White Sox plan to use him in the set-up role, they need to compensate him for the forgone closer dollars he is passing up.

I’m not saying that we can pin down the exact value of relievers here, but it does reveal the difficulty in valuing pitchers according to their roles. Middle relievers and starters limit the need for closers and teams can shift pitcher roles with ease. But, what I am certain of, is that the Reds are going to regret this contract, even if Cordero pitches well. And I think there is a decent chance that he collapses, as relievers often do. He’s got a big contract, and even if the Reds decide to trade him, I will not be surprised if the team has to send along some cash to cover part of his contract.

Valuing Torii Hunter’s Deal

So much for the moratorium on Thanksgiving transactions… I’ve got a few to catch up on, but I’ll start with Torii Hunter. Generally considered to be the best of the three top free agent center fielders—an assessment with which I disagree—Hunter agreed to a five-year, $90 million contract with the LA Angels of Anaheim on Wednesday.

A few days ago, I estimated Hunter’s 2007 worth to be between $12 and $13 million, based on his recent performance and not accounting for aging or expected salary growth. However, that estimate was only for comparison to Aaron Rowand and Andruw Jones. Now that we know the length of the deal, I want to update the anticipated salary projection for Hunter. The projection is based on annual salary growth and aging. The estimate of a player’s starting value is based on the previous three seasons of hitting performance, with a simple adjustment for position that does not account for quality of defense.

For a five-year deal, my model estimates that Hunter should receive $90.4 million; thus, this deal was right on the mark. :-) [UPDATE: I found a mistake in calculating my initial estimate. The correct estimate is $88.7 million—still, not far off from the actual contract.]

Addendum: I’ve had a few questions about the methodology. I am being brief, because the model is complex. The model I am using here is the model I develop in Chapter 13 of my book—in which I go into precise detail—with modifications for the other factors listed above.

2007 Awards

Here are my 2007 top-fives based on marginal revenue product estimates.

AL Cy Young

Player		Team            	MRP
C.C. Sabathia	Cleveland Indians    	$18.04
Roy Halladay	Toronto Blue Jays    	$16.13
Joe Blanton	Oakland Athletics    	$15.76
Josh Beckett	Boston Red Sox        	$15.42
John Lackey	LA Angels of Anaheim    $14.91

NL Cy Young

Player		Team            	MRP
Brandon Webb	Arizona Diamondbacks    $17.75
Jake Peavy	San Diego Padres    	$15.60
Tim Hudson	Atlanta Braves        	$15.22
Aaron Harang	Cincinnati Reds        	$14.83
John Smoltz	Atlanta Braves        	$13.73

AL MVP

Player		Team            	MRP
Alex Rodriguez	New York Yankees    	$28.28
Magglio Ordonez	Detroit Tigers        	$23.79
Vlad Guerrero	LA Angels of Anaheim    $20.55
David Ortiz	Boston Red Sox        	$20.49
Carlos Pena	Tampa Bay Devil Rays    $20.32

NL MVP

Player		Team           	 	MRP
David Wright	New York Mets        	$24.10
Hanley Ramirez	Florida Marlins        	$23.55
Albert Pujols	St. Louis Cardinals    	$23.52
Miguel Cabrera	Florida Marlins        	$22.66
Chipper Jones	Atlanta Braves        	$22.44

Estimates for position players include an adjustment for position. No time for commentary as I head out the door.

Happy Thanksgiving.

JC on Baseball Prospectus Radio

Will Carroll of Baseball Prospectus has posted an interview with me regarding (mostly) the Orioles managerial change and Leo Mazzone. If you didn’t know I was from the South, you will after you hear my accent.

Mp3 of the interview

Thanks to Will for doing the interview. I enjoyed it.

How Not to Run a Baseball Franchise

The Baltimore Orioles have just fired their manager, Sam Perlozzo, after holding the position for a little more than one full season. Perlozzo took over the team on an interim basis in August 2005, and was awarded the permanent position after the season.

Perlozzo took over a team that hadn’t had a winning season since 1997 and didn’t appear to be close to getting its act back together. In 2006 the team won only 70 games, four fewer than the previous season. This season the Orioles are on pace to win 68 games. However, the team’s run differential indicates the Orioles are playing better than their record: their Pythagorean record has them on pace for 77 wins. 77 wins isn’t a good team, but I’m not sure much of this is Perlozzo’s fault. (I want to acknowledge that some people have argued that deviations in wins from Pythagorean projections measure some level of managerial skill. I am not convinced of this.)

Perlozzo took over a pretty poor club and has not had much time to right the ship. Furthermore, Perlozzo’s good buddy Leo Mazzone seems to have improved the pitching staff after a tough first season. I suspect Mazzone will not stick around, because the main reason he came to Baltimore was to work with his good friend Perlozzo. I don’t understand the need for such a hasty decision. Unless the manager is actively doing damage, managerial stability has some value.

Perlozzo might be a rotten manager, I really don’t know, but considering Joe Girardi as a replacement shows that the O’s lack decision-makers who understand the game. Speaking of actively doing damage, Girardi was fired by the Marlins, despite the fact that he won the manager of the year award, because he couldn’t get along with the owner and GM. Girardi won the award is that the Marlins were not expected to win many games, yet the team was competitive most of the season. The voters surmised Girardi must be the reason, but the voters missed that the Marlins success had much more to do with the front office than its manager. Without Girardi, the Marlins are on a pace to win about the same number of games they won last year. In my book, I find Florida to be the best managed organization in baseball before Girardi even showed up. The Marlins were happy to let Girardi go because they knew he had little to do with the team’s success. Looks like the O’s are going after the next hot thing without really thinking about it.

I actually have some personal experience with this which I will share. Soon after the Orioles hired Mazzone, I received many media inquiries. A few of the journalists who contacted me said that the Orioles had mentioned my study to them as evidence of what a great pitching coach Mazzone is. Now, I’m happy that the O’s felt this way, but I thought it was odd that they were basing their decisions off of a study I posted on the internet without even contacting me. Wouldn’t you want to talk to me first if you were thinking of making this move because of brief study I posted? I didn’t even get an e-mail. My consulting fees are far less than what it costs to buy out a coach. I don’t mean to suggest that my study was the main reason they made their decision—I have no doubt that Perlozzo’s influence was much stronger than mine, and it’s not like it was a secret that Mazzone was good at his job—but I found the mention a bit odd.

So, when the O’s decided to can a manager in the midst of a losing streak, I was not surprised. Another short-sighted decision by an franchise that continues to blunder it’s way to the bottom of the division. I wonder if they would be willing to take Willie Harris for Daniel Cabrera.

What A Waste!

One of the parts of baseball that I really do not enjoy is arguing with umpires. I understand that in the heat of the moment disagreements take place and that players and managers will naturally express their displeasure with incorrect (or perceived-to-be incorrect) calls on the field. This happens in all sports. But no other sport tolerates the level of disagreement that baseball does. This past weekend, two ugly incidents occurred. And sadly you can easily view both of them via YouTube.

The first is Cubs manager Lou Pinella making a total ass of himself by berating an umpire who probably got the call right. And even if he didn’t, it’s not like he was clearly wrong. Pinella kicks dirt, his hat, and the umpire (inadvertently). For the last of these he was suspended by the the league. Later Pinella would admit that the call didn’t matter. He was just blowing off steam.

Here is Mississippi Braves manager Phil Wellman demonstrating to his players that “make up” includes acting like child and attempting to publicly humiliate the umpires by mocking them.

That Wellman is still employed by the Braves is an embarrassment to the organization. He should be fired immediately. Now, you may wonder if firing a minor league manager for a tirade is consistent when their major league skipper Bobby Cox is on the verge of breaking the league ejection record. Well, I’m not going to defend Cox—however, I do believe his ejections are product of the system that encourages arguing—but, what he does is very different. Cox does not kick dirt or dismantle bases. He makes his point, defends his players, and gets off the field. Wellman, like Pinella, is putting on a show for the crowd: “look at me, and let’s all laugh at the umps together!” Can we get back to the baseball game, please!

I will admit this is somewhat amusing, but there are many substitutes for this type of behavior that don’t interrupt a baseball game: America’s Funniest Home Videos, Cops, and home movies of my three-year-old when she doesn’t get her way. I would prefer not to witness this, and especially not have to explain it to my children. Most kids get “don’t do crack”, tantrums they can identify with.

But isn’t there a strategic element to all of this? Maybe the umpires will know that if they call the game against you they will get an earful; therefore, they are partial to a particular team. That managers think this is a possibility is part of the problem. Managers know that they have to complain or risk being out-complained by the other manager. The end result is that we get a lot of arguing but it doesn’t affect the outcome of the game. In The Baseball Economist I look at how managers may influence ball-strike calls on the field in Questec and non-Questec monitored ballparks and find that managers have very little effect on swaying umpires. In order to gain an advantage, or prevent the opposing manager from gaining an advantage, managers expend energy that will gain them nothing in the end. This is what economists call rent-seeking behavior.

The solution to all of this bad behavior is a low-tolerance policy and increased punishments. Umpires should give immediate warnings and quickly toss an offending party. Once a manager or player is tossed, he is escorted from the field by security immediately. Tantrums or refusing to leave the field will result in multiple-game suspensions and hefty fines. This type of behavior is not tolerated in basketball or football, why should it be any different in baseball.

Complaints about bad umpiring should be handled off the field. Umpires should be heavily-monitored and graded by Questec systems in every ballpark. If mangers and players feel that an umpire is acting wrongly—and many umpires are in need of some discipline—the league should take action off the field. All of this on-field posturing is wasted effort. The league wants to shorten games, so let’s get rid of this aspect of the game.

The Baseball Economist in Village Voice

Allen Barra uses my estimate of Roger Clemens’s worth to rationalize his signing by the Yankees.

Professor J.C. Bradbury of Kennesaw State University in Georgia tells the Voice that Roger Clemens isn’t worth it. In his new book, The Baseball Economist, Bradbury calculates the value of a win in terms of revenue created. He then credits each player for his contributions to those wins in monetary terms—sort of like Bill James’s theory of “Win Shares” converted to dollar signs. It’s complicated, but then so are both baseball and economics. The bottom line for Bradbury, economically speaking, is that Clemens’s worth is about $11 to $12 million, or about a third less than the Yankees will be paying him to start perhaps 20 games in what’s left of the season. (Actually, the cost to the Yankees is greater than Clemens’s reported $18.6 million salary. They’ll also be kicking in more than $7 million to Major League Baseball’s luxury tax fund.)

How is this rational? Read on.