Archive for JC’s Book

Florida Marlins 2006 Player Values

Florida Marlins (2006)			
			
Hitters			$Value (in millions)
Miguel Cabrera			$18.70
Hanley Ramirez			$10.03
Dan Uggla			$8.93
Josh Willingham			$8.83
Mike Jacobs			$6.13
Wes Helms			$5.89
Miguel Olivo			$3.46
Jeremy Hermida			$2.78
Alfredo Amezaga			$2.46
Joe Borchard			$2.23
Cody Ross			$1.62
Matt Treanor			$1.06
Reggie Abercrombie		$0.76
Chris Aguila			$0.46
Jason Wood			$0.42
Paul Hoover			$0.07
Robert Andino			-$0.24
Matt Cepicky			-$0.28
Eric Reed			-$0.59
			
Pitchers			$Value (in millions)
Dontrelle Willis		$14.63
Scott Olsen			$11.07
Josh Johnson			$10.94
Anibal Sanchez			$7.49
Ricky Nolasco			$7.18
Brian Moehler			$5.18
Joe Borowski			$4.65
Matt Herges			$4.52
Randy Messenger			$3.28
Taylor Tankersley		$2.94
Logan Kensing			$2.21
Renyel Pinto			$2.15
Sergio Mitre			$1.87
Todd Wellemeyer			$1.61
Chris Resop			$1.43
Jason Vargas			$1.40
Carlos Martinez			$0.95
Franklyn German			$0.71
Jose Garcia			$0.69
Yusmeiro Petit			$0.64
Jeff Fulchino			$0.02

Values from The Baseball Economist.

Defending the Freakonomic Approach in Economics

Steven Levitt points to an article in The New Republic on how freakonomics is ruining the discipline of economics. In this sense, “freakonomics” is not the book, but an approach used by economists to examine topics that may seem a bit atypical to non-economists. Alex Tabarrok reveals a bit more of the article so we can see what the critique is.

A typical conversation around the snack machine at the National Bureau of Economic Research, where many Harvard students had cubicles, went something like: Hey, did you hear that so-and-so found this crazy example of excess tax refunds in western Manitoba in the early ’60s? At which point the other would reply, Uh, no, wow, that’s, uh, great, and then scamper back to his desk to brainstorm for some similar quirk of public policy. At an age when most people brood that life is too random and arbitrary, these people’s biggest complaint was that it wasn’t random and arbitrary enough.

In retrospect, I have come to see this as the moment I realized economics had a cleverness problem. How was it that these students, who had arrived at the country’s premier economics department intending to solve the world’s most intractable problems–poverty, inequality, unemployment–had ended up facing off in what sometimes felt like an academic parlor game?

Well, if you want to talk about frivolous applications of the economic method, I think sabermomics might be near the top of the list. After all, while I suspect most Americans think baseball is more interesting than the big topics, no one (OK, maybe only a few people) would declare baseball more important. However, I’m not planning on shutting down my operation any time soon.

Economists most certainly should study important questions. I’ve done plenty of research on topics that have nothing to do with sports—all with more relevant real-world applications—yet that shouldn’t stop me from studying puzzles that intrigue me as an economist. An unanswered puzzle means there is something about the world that we can’t properly explain. The answer might yield only the acquisition of knowledge about this subject, or it might have indirect applications that can help us solve more important problems.

For example, 50 years ago, the late Simon Rottenberg published a paper “The Baseball Players’ Labor Market” in The Journal of Political Economy. Coincidently, this journal is now edited by Steven Levitt, and it is a mainstream top-tier journal.

Rottenberg was most interested in how baseball’s reserve system, which bound players to teams, affected the allocation of talent across the league. Rottenberg determined that no matter who owns the right to employ a player in baseball, the player will still play for the team that values the player the most. A free agent will sign with that team, or that same team will purchase (possibly via barter) that player from the club who owns the player’s rights. This result, now known in the “invariance principle,” mirrors the results of a much more famous paper published by Ronald Coase four year later. That paper, “The Problem of Social Cost” developed the Coase Theorem, and is rumored to be the most heavily cited paper in social science, and it subsequently won Coase the Nobel Prize.

This is a lesson in serendipity. While Rottenberg doesn’t get the credit he deserves for his finding—although he didn’t stress its other applications and Coase still deserves his Nobel Prize—it demonstrates the importance of seeking answers to questions that may seem to be trivial and with little obvious direct application. This knowledge from academic pursuits spills over. Some spillovers may be theoretical, others may be involve new empirical techniques, or they may develop a new way to think about an old problem. Failure to answer seemingly trivial questions may actually slow our progress in answering big questions. That the puzzle exists is sufficient motivation to study it.

While there is no doubt that the opportunity cost of freakonomic analysis is the direct study of important questions, but it is not as if no one is aware of this. Believe me, if I thought I had the cure to world-wide poverty, I’d change the focus of my research. Any social scientist would do so. But, in the meantime, I hope economists are not discouraged by freakonomics backlash. It makes the economics discipline more fun and more productive.

Miami and Baltimore Radio Friday, March 30

I have two radio appearances tomorrow.

At 11am I’ll be on “The Boog Sciambi Show” on 790 The Ticket in Miami. Braves fans ought to know Jon “Boog” Sciambi as the Braves new TV analyst on FSN South and SportSouth. I’ve enjoyed his Spring Training coverage quite a bit. You can listen to the show live here.

At 8pm I’ll be on the “Sportsline with Steve Davis” on WBAL 1090-AM in Baltimore. You can listen to the show live here. I don’t know if the opportunity will arise, but I will be happy to answer any call-in questions. ;-)

Division of Labour: The Baseball Economist Review

Bob Lawson offers a kind review of The Baseball Economist at Division of Labour. Here’s an excerpt:

I highly recommend it to anyone interested in the economics of baseball or sabermetrics (the statistical analysis of baseball).

Interview with The Hardball Times

Brian Borawski interviews me about The Baseball Economist in today’s The Hardball Times.

Brian Borawski: When I first read the title of your book, “The Baseball Economist,” I figured that the book was going to deal with a lot of baseball business issues. While it does deal with things like whether baseball is a monopoly or not, it also touches on much more than that. When the book idea was first conceived, what was your overall goal for the book?

J.C. Bradbury:
When I first started out, the business of baseball angle was the first topic of the book I planned to cover. In fact, the last three chapters of the book on the weakness of Major League Baseball’s monopoly power were the first chapters I wrote. However, I quickly realized that I wanted to have some more fun with baseball, and concentrate on questions that are relevant to economics but do not have business implications.

There is a big misconception out there that economics and business are the same things. Economics is a social science with a universal theory of human behavior. If you want to understand business, you have to study economics, but there are many other topics that economists study outside of business. For example, I did my graduate work at George Mason University, which is known for its application of economics to politics—a field known as public choice. Naturally, as a baseball fan, I had lots of questions about the game that I thought economics could help answer. And I’m not the first economist to look at the game like this.

This approach is very similar to the approach taken by sabermetricians, which is something I discovered after meeting Doug Drinen while working at The University of the South. Doug is a mathematician with a background in sabermetrics. He grew up buying the Bill James Abstracts, and has contributed several important studies to the sabermetric world. Right now, most of his work is in football over at Pro Football Reference. We would talk baseball quite frequently, and I learned a lot from him. Several of the chapters in the book had their origins in our lunchtime discussions.

My goal of the book became to highlight topics that I thought economic thinking could contribute something to baseball fans seeking to know more about the game. As a secondary motive, I was hoping to teach a little economics through a fun subject so I decided to minimize the business aspects and concentrate on the fun stuff.

Read More.

Breaking Down the McCann Deal

The big news in Bravesnation is that Atlanta has locked up Brian McCann for the next six years of his career for $27.8 million, with a $12 million club option for a seventh year. Now, the deal really only delays McCann’s free agency by a year, but given the way Brian has played, I think the Braves will be saving some in arbitration.

McCann’s 2006 hitting contribution was worth approximately $10.42 million. This doesn’t even take into account his defense at catcher which only adds to his value. Let’s just use his hitting value as a baseline and then you can lump on a little more (pick any number you like, I don’t care) for defense. Given the rate at which salaries have been rising, and even assuming a slight decline in his play from 2006 I estimate that he will generate a total of $83 million through 2012, when the guaranteed portion of his contract runs out. Now, $83 million – $27.8 million doesn’t make this a $55 million steal for the Braves. McCann’s MLB playing rights are owned by the Braves, which allows the team to play him considerably less than his true worth. They didn’t necessarily have to pay him this much to get that amount of value out of him.

McCann would have earned a little more than $400,000 in 2007 before heading into arbitration for the next four seasons. For 2007 he gets $1.5 million ($1 million signing bonus + $500,000 salary), which is more than the team would have otherwise paid McCann. In The Baseball Economist, I find that arbitration-eligible players tend to earn about 77% less than their value. Based on a simple projection of McCann through these years, the Braves could expect to pay him a total of $13 million just for his hitting. This is less than what his contract pays him for this time period ($16.3 million), but remember my numbers are leaving out his defensive value that, even by conservative estimates, will eclipse the amount he will be paid.

In the only guaranteed free agent year the Braves purchased, McCann ought to be worth $16.5 million on the open market. Even if McCann achieves all of the incentives to push his salary from $8.5 million to $11.5 million, the team still comes out ahead. I am even more intrigued with the option year that the club gets in the deal. If they chose, the team can keep McCann around in 2013 for a paltry $13.5 million, which is about $4 million less than what I estimate he’ll be worth on the open market.

This leads to another question. Why would McCann sign a contract that tilts so heavily in the Braves’ favor that I’ve yet to see anyone criticize this deal? Brian McCann is a rich man because he can play baseball. If an injury ever takes baseball away from him, he’ll be falling back on some skills that aren’t nearly as valuable. Especially for a catcher, I think it’s a good idea to get this kind of guaranteed money when you can. The Braves are happy because their revenue-generation options are much more diversified. This contract could end up being a bad one if McCann declines or gets hurt, but the team is bound to balance out the bad breaks with good breaks. It’s harder for McCann to insure against his potential loss.

I also wonder how this deal affects several other players in the organization.

Jeff Francoeur: Brian’s contract has put the focus on his good buddy. Rumor has it that Frenchy received a similar long-term offer from the Braves and thought it was worth half of what he wanted. I’m curious whether or not the Braves offered Francoeur more or less than McCann. While Jeff gets a lot more press, McCann is already a superior player and has the better potential to develop. Francoeur is the most popular player on the team, combining his hometown roots, charm, and good looks to garner more cheers at the ballpark than any other Brave. There’s a reason Delta chose him to be their new spokesmodel…I mean spokesman.

But over the long haul, McCann’s value ought to exceed Francoeur’s. Fans will begin to notice more good things from McCann than Francoeur, and they will forget about “the natural.” The Braves are right to play hardball here. If he wants a bigger deal, then he needs to step up beyond the hype. And if he does so, the Braves will gladly up their offer. I also worry about how the McCann-Francoeur relationship. Paying either one of these guys more than the other may cause some bad feelings. Most competitive people are competitive in everything.

John Smoltz: Speaking of competitive personalities, let’s talk about the club’s senior player. The McCann deal should be a cost-saver, so that gives the Braves more money to sign one of their top two free agents. The Braves are in a situation where they almost have to sign Smoltz. There is little starting pitching help coming up from the minors to take over, so no matter what the Braves will have to sign a free agent pitcher next year. Most people feel Smoltz will stick around, but I don’t know. He saw his good buddies Tom Glavine and Greg Maddux leave for big deals, and I can see that eat at him. Plus, with his divorce and recent confrontation with Schuerholz, I wouldn’t be surprised if he just thought a change of scenery would be a good thing. My gut tells me he goes, even though this deal ought to give the Braves more wiggle room and the team will want him back.

Andruw Jones: The other big free agent on the Braves is someone most think is a goner. Like I said with Smoltz, the McCann deal frees up money. Andruw may talk big, but he loves playing for the Braves and Bobby Cox. He’s not going to sign for cheap, but I think he may be willing to take less from the Braves than from other teams. And if Francoeur doesn’t progress much this year, Schuerholz may feel he needs to keep some pop in the outfield.

Jarrod Saltalamacchia: The prized catching prospect appears to be blocked with McCann entrenched behind the plate. I think it’s too early for the Braves to do anything. His stock is low right now after a rough Double-A season. He’s young and in no rush to get to the big leagues. I see the Braves keeping him at catcher until he’s hitting call-up numbers in Triple-A. Then a decision needs to be made on a trade or position switch. And who knows, if McCann goes down it’s nice to have a back-up plan.

Book Signing Report

I’d like to thank those of you who came out to my first ever book signing on Wednesday night. It was a success! It was nice to meet new people and see old friends. I appreciate the support from all of those who attended in person and in spirit. :-)

Here are a few photos.

Book Signing

Book Signing

These are the only two I have in which I’m not ruining the picture with a silly face.

If you would like a signed copy, but could not attend the event, there are signed copies available at several Barnes & Noble stores (Buckhead, The Avenues on Dallas Highway, and Barrett Parkway) and at the Borders on Barrett Parkway.

Deadspin on the Marlins

Yesterday, Deadspin ran its preview of the Florida Marlins. I enjoy reading Deadspin commentary, but I have to say I disagree with analysis of the organization by guest contributor Dan Lewis.

The moral of the story: The Marlins are probably going to suck, but could accidentally make the playoffs.

Lewis is involved with a lot of cool sports stuff on the net, but I think he’s underestimating the Marlins a bit. It’s possible that I’m misinterpreting his humor as actual digs at the Marlins, but I’ll use his commentary as my foil for today’s book promotion because I think discounting the Marlins is all too common. While we often hear about the ability of the Oakland A’s and Minnesota Twins to win on a small budget, the Marlins are rarely mentioned in the conversation.

When thinking about the Marlins organization, it’s easy to be distracted by their antagonistic relationship with the Miami community. I don’t admire this aspect of the franchise, but I am amazed at the efficiency with which the Marlins operate. In The Baseball Economist, I develop a organizational-rating method that reveals the Marlins as MLB’s best-managed franchise in baseball. Over the past four seasons the Marlins have won an average of 84 games with an average payroll of only $41 million, which is about 40% less than the MLB average payroll. Over this same period, this is 5 games more than Lewis’s beloved New York Mets, who averaged a payroll of $104 million—that’s about 40% more than the MLB average. Maybe the Mets should use their budget to target Marlins executives instead of free agents.

The moral of the story: the Marlins winning ways are no accident. This is a well-run organization that knows how to manage its resources. That this front office doesn’t get more attention for its excellence is surprising.

Can Tony La Russa Get Out of This One?

Tony La Russa was arrested for a DUI in Florida this morning.

La Russa’s SUV was stopped at a light that, according to police, went through two cycles of green. A driver behind La Russa had to go around his vehicle, police said.

Police found La Russa slumped over in the driver’s seat of the running SUV. The manager of the world champion Cardinals had his foot on the brake and did not respond to knocks on the window, police said. He finally woke up and parked the car.

Police said they noticed the smell of alcohol on his breath, and a field sobriety test was conducted.

The 62-year-old LaRussa was sent to the Palm Beach County Jail around 4 a.m., according to the jail’s Web site. La Russa provided breath samples, which measured at a .093 blood alcohol level, police said. The legal limit for drivers in Florida is 0.08.

While 0.93 is low for a DUI—I am NOT excusing is, just pointing it out—his behavior seems to be consistent with someone who should have known not to get behind the wheel.

I wonder if TLR will have the same influence with the court as he does with umpires. In Chapter 4 of The Baseball Economist, I examine the influence of different managers on ball and strike calls, inside and outside of Questec-monitored parks. The idea is that without Questec ball and strike monitoring, managers can exhibit more influence over umpires. I find that while most managers don’t have much persuasive power over umps, La Russa raises the strikeout-to-walk ratio of his pitchers outside of Questec parks. Maybe it’s his lawyering skills; he needs them now.

Reminder: Atlanta Book Signing TONIGHT!!!

I just wanted to post a reminder that I will be signing The Baseball Economist at the Buckhead Barnes & Noble TODAY (March 21) starting at 7:30pm. The program includes a brief talk, Q&A with the audience, and signing books. I’ll do my best to mingle, and I might be up for a beer after the event.

I look forward to chatting with those of you who attend. If you live in the Atlanta area, please stop by and say hi. :-)