February 23rd, 2004

Diluting ‘Moneyball’

Aaron Schatz of Football Outsiders has made the move to mainstream media (congratulations Aaron), and his debut is a provocative one: that now that the sabermetric secrets detailed in Michael Lewis’ excellent book, Moneyball have been revealed, that the advantage the Oakland A’s enjoy over other better financed ballclubs will soon disappear.

Though I’m a little late to the game on this, I’m going to join David Pinto and JC at Old Fishinghat (soon to be joining the blogroll) in disagreeing with Aaron’s thesis.

Why? First, while Sabermetrics may be the best predictor of performance on the baseball field, that doesn’t mean that teams will necessarily listen to what the numbbers are telling them, and the New York Yankees’ acquisition of Alex Rodriguez is a prime example of that.

By every reliable measure of statistical analysis, Rodriguez is a better fielding shortstop than Derek Jeter, and it isn’t even close. The logical move for the Yankees to make to maximize their assets would be to move Jeter to third to make way for Rodriguez at shortstop.

But of course, that’s never going to happen. As a result, though the Yankees are a much improved ballclub by dint of the trade, they’re not as effective as they could be — something that’s owed to Jeter’s status as a New York matinee idol more than anything else.

Further, the lessons learned in Moneyball are about more than just statistical analysis — it’s about creating an organization that can change and adapt to shifting circumstances. In short, it’s about culture. And no matter how many teams might say they’re using Sabermetrics to make decisions, that’s a far cry from hardwiring it into the DNA of your organization.

Even in Moneyball, Beane admits to author Michael Lewis that the secret to his success is more than just the inventive use of statistics, it’s about running an organization that’s open to new sources of information, and isn’t afraid of acting on them, even if that information is telling you something that you didn’t believe before.

So while the gap is certainly closing, that doesn’t mean that there won’t be advantages for a smart organization to exploit. And when it comes to Beane, something tells me he won’t be wasting time when it comes to creating new advantages he can use over other ballclubs.

UPDATE: There’s more discussion of this over at Baseball Primer, a forum where Aaron has been answering some of his critics in a way that makes it appear that there’s less daylight between where he and I stand on this.

4 Responses to “Diluting ‘Moneyball’”

  1. Skip Oliva says:

    In antitrust policy, I’ve long criticized the narrow definition of “competition” employed by regulators. They define competition solely in terms of short-term price: If they go down, competition is healthy; if they go up, competition is being restrained. The more accurate capitalist view is that competition is a process of trial-error-and-feedback, learnig what works and what doesn’t and having the flexibility to adjust. That is the essence of the Moneyball theory. Proponents of the more erroneous classic competition theory, like George Steinbrenner, simply view competition as a matter of acquiring the most premium parts. This can work in the short-run, but it fails in the long-run, especially when you’re competing against people who understand competition.

  2. Tom Benjamin says:

    I think there is another element to this that Schatz misses. It is probably wrapped up in what Eric called culture. The issue is not that sabermetrics is a tool to finding undervalued players and it is now a tool available to everyone. The real issue is about finding undervalued players whether they use sabermatrics or not.

    You can’t use sabermetrics in hockey but it is very easy to see that players over age 31 in the NHL are overvalued and players under 25 are severely undervalued. This disparity is built into the CBA.

    Teams in small markets can easily compete because most players in the league are undervalued and the overvalued ones are very, very overvalued.

    If you look at the distribution of talent (or salaries) in any of the major sports most players are below average or undervalued and the famous are seriously overvalued. The perceived difference in talent and the actual payroll differences between teams is always much, much larger than the actual difference.

  3. Skip Oliva says:

    Actually, Tom, the undervalued-overvalued effect can largely be attributed to collective bargaining itself. When you’re forced to negotiate with laborers as a group, the resulting agreement will generally favor the senior workers over the junior ones. In most CBAs this is blatantly obvious, since salaries are tied directly to seniority. The “market competition” of sports can mask this effect in pro leagues, but it still exists.

    Take a teacher’s union for example. A 30-year old Ph.D. in Chemistry with five years practical experience will make less than a 50 year old with a bachelor’s, simply because the older teacher has more seniority, even though he’s probably less valuable a laborer.

  4. Tom Benjamin says:

    I get what you are saying Skip, and I agree. I don’t think the source of it matters though.

    The fact that the CBA distorts the values of players is a good thing for competitive balance.

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