Archive for JC’s Book

My Solution to Doping in Sports

If you haven’t been paying attention to the Floyd Landis doping case, you’re missing quite a spectacle. The battle between Landis and the World (U.S.) Anti-Doping Agencies (WADA and USADA) is full of…well, comedy. It would be funny to laugh at it if it didn’t involve the reputation of a man who may be innocent. After winning the Tour de France last year, a drug test following Landis’s amazing Stage 17 win revealed a high testosterone to epitestosterone ratio. Supposedly, further tests have revealed the presence of synthetic testosterone.

But all of this is debatable according to Landis, and it’s hard not to be sympathetic with the cyclist. (Read more about the case at Trust But Verify). The case has been bungled throughout the appeals process, and even the original samples appear to have been mis-handled. Any objectivity the lab testing the samples had was lost long ago, because it has every reason to defend its initial finding. Furthermore, WADA and USADA officials have a lot at stake as well. I won’t detail all of the happenings in the case, but the latest mishaps involves an arbitrator rebuking his fellow arbitrators (you know, those guys who are supposed to objectively decide the case) for leaving him out of a decision that went against Landis and Landis claiming that prosecutors offered a deal to help them get Lance Armstrong. The head of the WADA Richard Pound once commented that with Landis’s identified testosterone levels “you’d think he’d be violating every virgin within 100 miles.” And you thought leaks were bad in the BALCO case?

It’s been nearly a year since the incident, and the circus continues. This case contains numerous examples for economists to use in the classroom: the incentives for competitors to cheat (prisoners dilemma), the incentives of bureaucrats to justify their existence rather than seek the optimal (public choice), and the consequences of setting thresholds for hypothesis testing (the opportunity cost hypothesis rejection cutoffs). There is no way to develop a perfect performance-enhancing (PED) drug testing procedure in any sport. Athletes have every incentive to cheat, and the incentives are not right for monitors. It doesn’t mean we shouldn’t try, but I don’t think the current system is very effective.

I propose that we keep testing, but change the punishment. As a fan, I want to revel in the excitement of the sport in the present rather than wait for results like a high school senior anticipating the arrival of his SAT scores. The cost of using steroids is borne entirely by the participants. (Please, no sob stories about role models.) I don’t face any negative health consequences from PEDs, but the athletes I cheer for do. They ought to be the ones concerned that to succeed they must dope just to keep up with the dopers.

My solution: fine dopers 100% of their winnings and endorsement deals and redistribute the money to athletes who test clean. If you want to dope, go right ahead. And if it brings you glory, you get it. But, the additional fans you bring to the sport and take away from clean athletes, you have to give it all away to the ones you harmed. If you want to play clean, you might lose an edge on the competition, but you are rewarded for staying clean. The results of all of the tests will remain confidential, and the public has no fear that anyone will be stripped of a title. Dopers who win do get fame, but their fortunes will be limited. Garnishing endorsement deals will be difficult to enforce once athletes retire, but the financial payoff from cheating will be much lower than it is now. There is still the problem of labs, but I think they’ll behave better once they are removed from public scrutiny. If a finding is reversed, no one will know they got it wrong in the first place.

How would this work in baseball? This is something I discuss in my book. Basically, I think the players union needs to take charge of drug testing to alleviate the fear that owners will mis-use medical information contained in drug tests (e.g., THC levels), and punish players with fines that will be redistributed to players who test clean.

I’m tired of discussing steroids in sports. I think this solution will allow fans to focus more on the game, knowing that clean athletes are being compensated for their behavior.

Overpaying Roger

Yesterday, the Yankees signed Roger Clemens to a deal with the Yankees for a pro-rated share of $28 million. Depending on how quickly he gets ready, he should make between $18-19 million. Based on his 2006 performance, I estimate he’ll be worth about $11.9 million if he starts 23 games at six innings a piece.

I think it is interesting that the Red Sox supposedly offered him $10 million less and to start pitching later in the season. If he pitched the time frame he pitched last year that would put his value at about $9.8 million, which is similar to the amount my system values him (see The Baseball Economist).

Does this mean the Yankees “overpaid” Clemens, as I insinuated in this post’s title? Not necessarily. There are many things that Roger might bring to the table that my system doesn’t value: star appeal, veteran leadership, unique characteristics of the Yankee market, or how much much George Steinbrenner values attention. However, I do think it’s a sign that the Yankees are hitting the panic button. I don’t think the Red Sox were serious about Roger, and I doubt Houston was willing to go this high. Maybe that’s the premium to get him to play in NYC.

Smoltz Is Worth It

Yesterday, the Atlanta Braves signed John Smoltz to one-year, $14 million extension. The deal includes two years of options. The first is a $12 million player option for 2009 that vests if Smoltz reaches 200 innings in 2008. The second is a club option for 2010 that is worth $13 or $12 million, depending on whether or not Smoltz pitches 200 innings in 2008. It should be noted that he has pitched about 230 innings in each of the two previous seasons.

According to my estimates from The Baseball Economist, Smoltz’s 2006 season was worth about $16.6 million, so this deal seems about right. Yes, there is a chance of injury, but Smoltz has been very durable since his return to the rotation. He is hardly more risky than any replacement the Braves could have found on the free agent market. Indeed, Smoltz probably would have commanded a larger deal as a free agent, and certainly would not have given the injury out-clauses—this is essentially what the option years are—to another club. It was a good move by Schuerholz to take advantage of Smoltz’s desire to pitch for the Braves. Even it Smoltz goes down tomorrow, it was a good gamble.

I have read some comments from fans that even if Smoltz is worth this contract, that’s a lot of payroll to tie up in one player, especially on a team with some holes. The biggest hole on the Braves organization—not just the big club—is pitching. There are very few arms to wait for from the farm. If Smoltz left, the Braves were going to have to go to the free agent market for a replacement. So, why not pick up one of the best pitchers in the game and pay him what he’s worth?

What does this mean for Andruw Jones, who is hitting the free agent market this offseason? Well, I actually think this is good news. It shows that the Braves are able to spend some money again. And even if the new owner is going to put some restrictions on payroll, the Braves need a center fielder. And like Smoltz, Andruw wants to play in Atlanta for Bobby Cox. That is something that no other team can offer, and I think that Schuerholz may be able to get him for less than any other team. The McCann deal signed during Spring Training frees up some payroll that can be used on other players.

As a fan, I am happy to see Smoltz back. I thought that he would leave after this season like Glavine and Maddux. It’s been hard to cheer against the Mets when Glavine is on the mound. I’m glad I won’t have to go through that with another pitcher.

Best Seller List and More

The latest edition of ESPN The Magazine lists The Baseball Economist as the tenth best selling sports book. Thanks to all of you who purchased the book.

I returned from a delightful trip to Wake Forest University where give a talk on the book. The students and faculty were gracious hosts, and I very much enjoyed my visit. They even took me to see the Myrtle Beach Pelicans play the Winston-Salem Warthogs. Thanks to my hosts for making it such a pleasant trip.

Russell Adams writes a nice article in The Wall Street Journal over the weekend (free if you have Congo NetPass) on how major league teams estimate player values. The system that I develop in The Baseball Economist is mentioned briefly, but the article focuses on Vince Gennaro and his new book Diamond Dollars. I am still waiting for my copy to arrive, but I suspect it’s good. I’m a fan of Vince’s work.

It Doesn’t Matter Who Hits Behind Ryan Howard

There has been a lot of discussion this year in Philadelphia about where Ryan Howard ought to hit in the batting order. Last season, the NL MVP batted fourth behind Chase Utley and in front of Pat Burrell. Many fans, sports writers, and even manager Charlie Manuel (whom I remember fondly leading the Triple-A Charlotte Knights) have pondered changing the line-up in order to produce more offense. The most popular idea was to flip-flop Utley and Howard in the order—having Howard bat third and Utley fourth—to allow Utley to “protect” Howard. I also wonder why Philly fans hate Pat Burrell so much. The Braves would be happy to take him off of your hands.

The popular concept of protection is that a good on-deck hitter affects the way the pitcher throws to the batter. The traditional argument says that pitchers cannot “pitch around” batters, because if he walks the batter he’ll have to face a good batter with a man on. But, the argument isn’t done yet. This allows a protected batter to see better pitches to hit—the pitcher can’t nibble around the edge of the strike zone for fear of inducing a walk—and thus increase his ability to hit for power.

However, I believe one crucial element has been left out of the analysis. Pitchers can alter more than just pitching inside and outside of the zone. Pitchers also regulate their effort from one batter to the next, conserving energy to put on a fastball or hiding a wicked out-pitch for just the right occasion. In a situation where a good on-deck hitter follows the batter, the pitcher has likely saved up his best just for this moment. Even if the pitcher is less likely to walk the batter, the batter isn’t necessarily going to be more productive at the plate.

This is something that Doug Drinen and I addressed in a study on protection (here is an old post on the subject), and I use this study to examine the issue in Chapter 2 of The Baseball Economist (“The Legendary Power of the On-Deck Hitter”). Using play-by-play data and a host of empirical techniques to control for many factors we found that a better on-deck does lower probability that the batter walks, which is the first step in demonstrating protection. However, this does not translate into more productive at-bats. As the on-deck batter improves, the probability that the batter gets hit, extra-base, and hits a home run declines—the exact opposite of the protection hypothesis. But, the magnitude of the effect is so small that it’s best to say that there is no such thing as protection.

Now, when Doug and I wrote this study, we were very proud of the granulated data we used. After all, how can you get more specific than play-by-play? Well, how about pitch-by-pitch data? Steven Levitt at Freakonomics points to a new study by Ken Kovash that breaks the game down even more than we did. He finds that good on-deck hitters induce pitchers to throw more strikes and more fastballs—fastballs are easier to throw for strikes than breaking balls and change-ups. This fits with our finding that the quality if the on-deck hitter impacts walks. However, I’m curious as to how this effect translates into overall success of the batter. One thing that Ken does not report—I’m hoping that he will report it when his schedule clears up—is how the on-deck batter affects the speed of the pitch. Doug and I could only hypothesize as to why the on-deck hitter does not lower the output of the current batter. If the answer is more pitcher effort, we ought to see pitchers putting a little more mustard on their pitches with a good batter on deck.

The moral of the story is this: a good on-deck hitter lowers the likelihood of a batter walking, but it does not translate into more offensive production.

PFR: The Baseball Economist Review

My good friend and intellectual collaborator Doug Drinen, posts his review of The Baseball Economist. Granted, it’s a biased review—he’s a friend and we co-authored some of the studies that I discuss in the book—but Doug probably knows more about the book than anyone since he watched it develop.

Most of you are probably not aware that I used to be as intensely into baseball analysis as I currently am into football. I wrote for a few sabermetric sites and publications and I like to think I came up with a few nifty little studies along the way and contributed a bit to the field. But it’s now clear that my biggest contribution (by far) was that I introduced John-Charles Bradbury to the existence of sabermetrics.

I could drone on about how much of a hero I am for leading J.C. out of the wilderness of RBIs and pitchers’ wins, but I’ll spare you. It is worth mentioning, though, that the fact that J.C. didn’t encounter sabermetrics until relatively late in life probably prevented him from becoming Just Another Sabermetrician. Rather than viewing things through a traditional sabermetric lens — as those of us who grew up with Bill James tend to do — he started to look at them in light of his training as a professional economist. When combined with the tools of sabermetrics, it leads to a fresh perspective.

I owe a lot to Doug for his contributions, as he tempered my thinking on many issues. And I’ll never forget watching the Aaron F’n Boone game with him. “What the hell are you doing, Grady? Take Pedro out!”

I am occasionally asked about using my approach in other sports. I point them directly to Pro-Football-Reference.com and his blog. I’m hoping that his work there will result in a book on football in the near future. If I were a literary agent looking for prospects, Doug would be near the top of my list of targets.

AJC: Five Myths about Baseball

In today’s Atlanta Journal-Constitution I list five myths about baseball—all of which are discussed in The Baseball Economist. The AJC didn’t put in online, but it does appear in the San Diego Union-Tribune. It may be syndicated in other papers as well.

Here are the myths:

1.) The disparity in market size explains most of why the Yankees are better than the Brewers.

2.) Steroids are the main reason home runs are up in baseball.

3.) MLB owners pay players well above their true financial worth.

4.) A good on-deck hitter “protects” the batter in front of him and increases his hitting power.

5.) Baseball’s antitrust exemption allows MLB to act like a monopoly compared with other professional sports leagues.

To learn why these are myths, see the article or, even better, read the book. :-)

Borders: Q&A and Book Excerpt

The Baseball Economist is featured in Borders April newsletter. Here is a sample of the Q&A with me on the advantages of market size in baseball.

— — —
Are the final standings a product of pure financial determinism, or do small cities have a fighting chance?

JCB: While it is true that the big-market Yankees have been one of the most successful franchises and the small-market Brewers one of the worst in recent baseball history, these teams differ in more than just the sizes of their fan bases. Over a 10-year span from 1995–2004, I calculate that every 1.6 million residents of a city translates into one additional win for the team in that market. Given the disparity in market sizes between New York and Milwaukee, the Yankees were expected to win about 11 more games a season than the Brewers. That is not chump change; however, the actual disparity between these franchises was a whopping 26 games. Market size explained a minority of the difference (about 40 percent) between these organizations, which means that a majority of the blame must be placed somewhere else: the ineptitude and skill displayed by the front offices of these teams.
— — —

Also, the newsletter includes an excerpt from Chapter 1 of the book, Accidents Happen…but More So in the American League.

Steroids and Home Runs in The New York Times

To many baseball fans the game has been ruined — hallowed records toppled, managers playing less small ball as they wait for that three-run homer. But the blame shouldn’t be placed on pills, needles and balms. The true culprit is…

For the answer, see my op-ed in today’s New York Times. It’s based on Chapter 8 (“The Evolution of Baseball Talent”) of The Baseball Economist.

Addendum: The response I have received to this article is overwhelming. If you have sent me an e-mail regarding it, it is very likely that you will not get a response; I just don’t have enough time. I have done my best to answer many of these questions and concerns in the comments below, because most of the e-mails I am receiving argue similar points. Also, several critics have pointed out that I have left out other potential causal factors out of the op-ed. This is true, but unfortunately necessary, because there is only so much I can say in 610 words. However, I devote a full chapter to the topic in my book, where I address these concerns. I want every one to know that I appreciate almost all of your correspondence (excepting a few rude e-mails) regarding your concerns. I think it’s important to explore this line of inquiry. I appreciate the positive e-mails as well. :-)

Baltimore Orioles 2006 Player Values

Baltimore Orioles (2006)			
			
Hitters			$Value (in millions)
Miguel Tejada			$11.51
Ramon Hernandez			$6.86
Kevin Millar			$6.44
Nick Markakis			$6.22
Melvin Mora			$6.10
Brian Roberts			$6.08
Corey Patterson			$4.31
Jay Gibbons			$4.25
Jeff Conine			$3.43
Javy Lopez			$2.30
Chris Gomez			$1.95
Brandon Fahey			$0.98
David Newhan			$0.70
Fernando Tatis			$0.70
Jeff Fiorentino			$0.37
Luis Matos			$0.31
Howie Clark			-$0.01
Luis Terrero			-$0.07
Danny Ardoin			-$0.19
Chris Widger			-$0.20
Eddie Rogers			-$0.22
Raul Chavez			-$0.24
			
Pitchers			$Value (in millions)
Erik Bedard			$14.45
Daniel Cabrera			$11.81
Rodrigo Lopez			$8.62
Adam Loewen			$8.32
Kris Benson			$6.91
LaTroy Hawkins			$3.81
Chris Britton			$3.70
Chris Ray			$3.35
Todd Williams			$2.57
Bruce Chen			$2.14
Kurt Birkins			$1.80
Sendy Rleal			$1.33
John Halama			$0.90
Jim Brower			$0.80
Julio Manon			$0.72
James Hoey			$0.56
Brian Burres			$0.45
Winston Abreu			$0.45
Eddy Rodriguez			$0.15
Tim Byrdak			$0.06
Russ Ortiz			$0.00
Jim Johnson			-$0.02
Eric DuBose			-$0.09
Hayden Penn			-$0.24

Values from The Baseball Economist.