Bang for their buck

For a while now, I’ve been working on a series of studies to evaluate the performance of baseball executives—primarily general managers. The idea of this particular study is “payroll efficiency,” which is just like it sounds.

To begin, I came up with a statistic called Pay+, which compares a team’s payroll to the major league average. The 2011 Rays had a payroll of $41 million, and the average team was at just under $93 million. So the Rays’ payroll was 44 percent of the league average; therefore, their “Pay+” was 44. The Red Sox’ payroll was roughly $162 million—74 percent above the league average—so their Pay+ is 174. A score of 100, of course, represents a league-average payroll.

Next we figure a team’s expected wins. So, sticking with the ’11 Rays … no team actually wins just 44 percent of the league average; that’d be a 36-126 record. I came up with this formula, which works really well:

(Pay+ minus 100), divided by four
Plus decisions divided by two

Which gives us “expected wins.” Do the math for the Rays ((44-100)/4)+(162/2) and you get 67 expected wins. The Rays actually won 91 games, so they’re +24 wins, tied with Arizona as the most efficient team in baseball.

So that’s the idea. Can the formula be improved? Absolutely. But it seems to work pretty well.

I have complete payroll data for each season of the free agent era, and I’ve identified general managers for each team in that era, so it’s easy enough to figure out who the most (and least) “efficient” GMs have been. Following are some of the extremes, by way of illustration.

Most wins above expectation in a season

A lot of the same GMs show up multiple times near the top of the list—Billy Beane, Andrew Friedman, Hank Peters. The 1993-94 Expos had different GMs, but both teams are in the top 10:

Rank  Year  Team            General Manager           Pay+    ExpW    ActW   Wins+
 1    2001  A's             Billy Beane                53      69     102      33
 2    2002  A's             Billy Beane                59      71     103      32
 3    2001  Mariners        Pat Gillick               119      86     116      30
 4    2008  Rays            Andrew Freidman            49      68      97      29
 5    1994  Expos           Kevin Malone               57      46      74      28
 6    1979  Orioles         Hank Peters                89      77     102      25
 6    1988  A's             Sandy Alderson             94      79     104      25
 6    1993  Expos           Dan Duquette               54      69      94      25
 7    1980  Orioles         Hank Peters                81      76     100      24
 7    2002  Twins           Terry Ryan                 60      70      94      24
 7    2010  Padres          Jed Hoyer                  42      66      90      24
 7    2011  Diamondbacks    Kevin Towers               58      70      94      24
 7    2011  Rays            Andrew Freidman            44      67      91      24

Fewest wins above expectation in a season

The amazing thing about the bottom of this list is how frequently the Mets show up. And each Mets team has a different GM: Frank Cashen (1983), Al Harazin (1993), Steve Phillips (2003), Jim Duquette (2004), and Omar Minaya (2009). All of them are more than 20 wins below expectation. Here are the bottom 10:

Rank  Year  Team            General Manager           Pay+    ExpW    ActW   Wins+
 998  2003  Mets            Steve Phillips            168      97      66     -31
 998  2004  Diamondbacks    Joe Garagiola Jr.         103      82      51     -31
 998  2003  Tigers          Dave Dombrowski            71      74      43     -31
 993  2009  Mets            Omar Minaya               168      98      70     -28
 993  1993  Mets            Al Harazin                124      87      59     -28
 993  2008  Mariners        Bill Bavasi               131      89      61     -28
 993  1983  Mets            Frank Cashen              158      96      68     -28
 992  1992  Dodgers         Fred Claire               135      90      63     -27
 992  1988  Braves          Bobby Cox                 102      81      54     -27
 991  1985  Braves          John Mullen               140      91      66     -25

Most wins above expectation in a career

Beane totally dominates this category. However, over the past five years, he’s been a much more modest +14 (so, just three wins above expectation per year). Jim Campbell’s numbers only cover the last eight years of his long career. I was particularly surprised to see longtime Twins owner (and de facto GM) Calvin Griffith score so well:

 Rank  General Manager       Years   Pay+   ExpW    ActW   Wins+
   1   Billy Beane             14     67   1,017   1,206    189
   2   Terry Ryan              13     62     919   1,023    104
   3   John Schuerholz         26    128   2,251   2,348     97
   4   Hank Peters             16     94   1,240   1,321     81
   5   Andrew Friedman          6     53     416     495     79
   6   Jim Campbell             8     69     559     637     78
   7   Pat Gillick             27    110   2,204   2,276     72
   8   Calvin Griffith          9     49     586     653     67
   8   Joe Burke                6     95     449     516     67
  10   Larry Beinfest           6     55     419     485     66

Fewest wins above expectation in a career

Okay, I need to explain something here: my win expectation formula works for every team except for the Cashman Yankees.

Those Yankee payrolls have been double the MLB average—well, actually, way more than double. Cashman’s average Pay+ is 224; that is, his average team is paid 124 percent more than the league average. The 2005 Yankees had a Pay+ of 284 (184 percent above average). It’s absurd, and it produces completely unrealistic results. Those 2005 Yankees are expected to win 127 games. This year’s Yankees are expected to win 111. That’s silly; no team realistically can go into the season expecting to win more than about 105 games.

To fix this problem, I imposed a cap on the system, the “Cashman cap,” which maxes out win expectation at 105. Even with the cap, Cashman scores at -100 for his career, but at least it brings him down to a somewhat realistic level. Anyway, I don’t think Cashman can truly be evaluated in the same way as other GMs, in terms of payroll efficiency.

With that one caveat, the bottom 10:

 Rank  General Manager       Years   Pay+   ExpW    ActW   Wins+
  146  Brian Cashman           13    224   1,355   1,255   -100
  145  Bill Bavasi             11    111     889     793    -96
  144  Buzzie Bavasi            8    136     693     604    -89
  143  Bobby Cox                5    105     409     323    -86
  142  Jim Hendry               9    132     801     733    -68
  141  Steve Phillips           6    152     563     502    -61
  140  Chuck LaMar              8     63     573     518    -55
  139  Lou Gorman              12    114   1,014     963    -51
  138  Harding Peterson        10    119     827     778    -49
  137  Al Harazin               2    132     178     131    -47

Leaving aside the Cashman Yankees, here are the only other teams with at least 100 expected wins (in other words, the highest non-Cashman payrolls in the free agency era). Cashman’s teams own the top 11 spots.

 Rank  Year  Team       General Manager       Pay+  ExpW  ActW  Wins+
  12   1978  Yankees    Cedric Tallis          188   104   100    -4
  13   2011  Phillies   Ruben Amaro Jr.        186   103   102    -1
  14   1977  Phillies   Paul Owens             186   103   101    -2
  15   1977  Yankees    Gabe Paul              185   102   100    -2
  15   1996  Yankees    Bob Watson             183   102    92   -10
  15   1997  Yankees    Bob Watson             182   102    96    -6
  15   1998  Orioles    Pat Gillick            182   102    79   -23
  15   2004  Red Sox    Theo Epstein           184   102    98    -4
  21   1998  Yankees    Bob Watson             182   101   114    13
  21   2010  Red Sox    Theo Epstein           179   101    89   -12
  23   1976  Red Sox    Dick O'Connell         175   100    83   -17
  23   1979  Phillies   Paul Owens             174   100    84   -16
  23   1982  Angels     Buzzie Bavasi          176   100    93    -7
  23   2011  Red Sox    Theo Epstein           174   100    90   -10

On the opposite end, the teams with the fewest expected wins (non-strike seasons only) are the ones you’d expect: the 1999 and 2006-08 Marlins, the 2003 and ’07 Rays, the 1999-2000 Twins, and the ’98-’99 Expos. All these teams were expected to lose around 100 games.

Basically, the system doesn’t expect any team to win or lose many more than 100. I think that’s about right—teams can obviously be more extreme than that, but going into a given season, nobody is projected to be that more extreme than about 100-62 or 62-100.

Payroll efficiency is a blunt instrument. It doesn’t consider individual transactions, or which GM was responsible for acquiring which players, or a host of other factors. But the system does help identify which GMs have generally gotten the biggest bang for their buck. It passes the “smell test,” too: Billy Beane, Andrew Friedman, John Schuerholz—these are well-respected GMs, and they score very well by this method. On the flip side, Bill Bavasi, Jim Hendry, and Steve Phillips are generally regarded as poor GMs, and the system confirms this. This study also makes me curious to learn more about Hank Peters and Jim Campbell—for instance, should they be considered for the Hall of Fame?

In future articles, I’ll continue my attempt to systematically evaluate baseball executives.