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December 31, 2012

Why an increase in payroll may not lead to sustained success

Last week, I discussed the issue of teams "going for broke" and how significant increases in payroll may affect overall success (win totals). One of the more interesting findings in that piece dealt with teams who had great success the season before they increased payroll.

I found that from 2001 to 2012 there were 28 teams who won at least 88 games in the year before they increased payroll by at least 20 percent. Of those 28 teams, only 14 teams were able to get back to that 88-win threshold in the subsequent season.

This result sounds surprising when taken at face value. In most cases, the assumption would be that the increase in payroll was an attempt to prevent regression and sustain, or build on, past success.

Based on the results I found in that piece, I concluded that the increase in payroll had no real effect on a team's ability to sustain success.

Over at the Book Blog, Tom Tango pointed out a major flaw in that conclusion, namely the lack of a control group:

Specifically, in one test, he finds a bunch of playoff teams that adds alot of money, and he still finds that a good portions wins fewer games. But, even if they did not add alot of money, they would STILL win fewer games. That’s regression toward the mean at work. If you take a group of teams that win 88+ games, you will find, on average, that they will win less in the next season. This is because teams that win 88+ games are teams that have both more good players than bad players and more good luck than bad luck. The next season, the luck will cancel out, so, all other things equal, are expected to win fewer games.

Tango's response brought me not to a different question, but instead a much better way of answering my original question. Instead of comparing successful teams that then increased payroll to themselves, I included every team that won 88 games from 2001-12 in the sample for a more illuminating comparison.

On average since 2001, the 113 teams that won at least 88 games in one season won 6.6 fewer games in the next season. This result was expected because of regression toward the mean that Tango discussed.

Despite this regression, 63 of the 113 teams (55.7 percent) were able to reach the 88-win threshold again in the subsequent season.

Does an increase in payroll have any effect on reducing the regression toward the mean?

As suggested by Tango, I broke the sample into three subsets:
{exp:list_maker}Teams who increased payroll considerably (15 percent or higher increase)
Teams who increased payroll somewhat (2 to 15 percent increase)
Teams who increased by a negligible or negative amount (Less than two percent increase){/exp:list_maker}I listed the results below.


As you can see, the number of teams in each subset was pretty close to evenly distributed. Quite surprising, though, is the subset of teams that were the most successful in preventing regression toward the mean in the subsequent season.

The control group of teams that did not increase payroll or actually decreased payroll, had the smallest average drop-off in wins from the previous season.

The last column in the table shows the percent of teams in each subset that was able to get back to 88 wins after reaching that plateau in the previous season. The control group also lead in this category with the highest percentage of teams, 58.3 percent, that were able to (sort of) maintain their success.

The results for teams that substantially increased their payroll (by 15 percent or more), surprisingly, were below the average for the entire sample.

Interestingly, improving the structure of the test resulted in the exact same conclusion as the one from the original study. Based on the results found in this study, it seems that increasing payroll has no real effect on a team's ability to sustain success and dodge the regression-toward-the-mean bullet in the subsequent season.

All payroll information comes courtesy of Baseball Prospectus' Compensation Tables.
Posted by: Glenn DuPaul

November 28, 2012

The impact of Marvin Miller

One of my colleagues in Cooperstown asked me on Tuesday: Does Marvin Miller deserve a place in the Hall? I answered without delay. Yes, I would vote for him. In considering all of the history, how could I not?

That is not to say that I am Miller’s biggest fan. He had an arrogant and condescending way of framing his arguments, to the point that I often threw sharp objects at the television during his press conferences throughout the 1970s and early '80s. His manner of talking down to the media, and in turn to the fans, will forever grate at me.

I also didn’t appreciate the way he handled the issue of illegal drug abuse in the early 1980s; his attitude showed only concern for players’ rights. (That always brought to mind Clint Eastwood’s famous line regarding the deranged serial killer in Dirty Harry: “Well, I’m all broken up about that man’s rights.”) Miller showed little regard for the illegality of the drugs and the harm that the drug abusers brought to the on-field quality of the game.

In spite of Miller’s failure on morality and his preponderance of condescension, his effect on the sport has been undeniable. He didn’t create free agency, as some have said, but he negotiated the process after the decision of Peter Seitz that liberated Andy Messersmith and Dave McNally. Free agency, arbitration, the pension plan and other changes that baseball has seen over the past 40 years simply would not have happened without Miller.

When Miller, who passed away Tuesday at the age of 95, became the head of the Players’ Association in 1966, the owners had an unfair grip on the players. Salaries were ridiculously low, players had virtually no basic rights, and the pension plan was wholly inadequate. Those conditions are no longer in place. The process began to change with Miller’s support of Curt Flood during his noble fight for player rights and his battle to defeat the reserve clause. Although Flood lost the case, the written judgment from the Supreme Court stated clearly that baseball owners needed to take a second look at their relationship with players, forewarning that changes would have to be made.

Each strike that was voted upon by the players and enacted by Miller (or in the case of 1976, the owners’ lockout) was designed with a specific goal of improvement for the players, whether it was the pension, free agency, or free agent compensation. The union won almost every time, largely through the negotiating skills of Miller. As a result, the players’ union has become the most powerful union in America. It all started with Miller. If a Hall of Famer is to be measured based on his impact on the game, then no one can be more deserving of the Hall of Fame than Mr. Miller.

Although Miller’s mission was clearly geared to advancing the players’ cause, which he did brilliantly, he also helped bring about a change to baseball’s postseason. In negotiating the free agent system that basically remains in place today, Miller helped create baseball news throughout the winter. With every major free agent signing, baseball publicity was produced during the dead of winter. This served two purposes: giving diehards a steady supply of baseball news during a tough time of year and helping to keep baseball pertinent year round. In turn, these developments likely had the effect of creating further interest in the game and lifting attendance.

So yes, Miller helped the players, but he also created a different dynamic that promoted the game. Put simply, it’s more fun to be a fan in the wintertime now than it was back in the 1960s. Credit Miller.

On the whole, baseball is better off today than it was 40 years ago. The sport is in the news 12 months a year, the players are doing fabulously, and the owners are making gads of money. Miller didn’t create all of the improvement by himself, but he spearheaded the movement at a critical time in the game’s history. So yes, if I had a vote (and that is a scary thought), the eminent Marvin Miller would be enshrined in Cooperstown as soon as possible.

And I think someday he will be.
Posted by: Bruce Markusen

January 23, 2012

Carmona points out an MLB inequity

Goodbye Fausto! Hello Roberto!

As reported last week, 28-year-old Fausto Carmona is Roberto Hernandez Heredia and perhaps 31 years old.

There are implications here for Carmona-Heredia, for the Indians and, most importantly, for professional baseball and the uneven way it deals with international players.

Since being released on bail, The Sinkerballer Formally Known as Fausto has been apologetic but tight-lipped. He reportedly paid for a false identity that may have incorrectly represented his age. He may have been making periodic payments to maintain the false identity. He eventually balked at paying and somebody talked, leading to his arrest.

He is not the first Latin-American player to take this route. (Last year's most publicized example was Leo Nunez.)

So Heredia lied. But did he do anything wrong to the game of baseball? Does lying about your age and name affect anything about playing the game?

It does not.

While the lies are certainly deplorable, they do not affect the player's ability on the field. People will say that, because his age is uncertain, it could be advantageous for him to have people think he is younger. It could lead to larger bonuses and salaries. He’ll appear more successful since his ability will be compared to that of players younger than him.

But these are issue of deceit based on the current economic model and do not affect the play on the field.

If the same player was actually three years YOUNGER, would we be willing to rectify the situation financially? What happened, as before, is a player found a way to take advantage of the economic system in baseball. For him to be successful, he still had to demonstrate ability and skill.

In doing so, he allegedly broke laws in at least two countries* but he never de-skilled the game. While the misreported younger age would have been helpful during his development, the lying did not give him specific extra ability, or his ability to ignore Lake Erie Midges that Joba Chamberlain could not. Carmona’s lies do not hurt the on-field play of baseball.

* I have no idea if Canada would say anything about a player such as Carmona entering the country with false paperwork. I’m not even sure Canada would prosecute, but I am fairly certain that it is against Canadian law.

When looking at a situation like Carmona’s, I look directly at those running Major League Baseball and the teams. Lying about one’s identity is so advantageous for a specific set of players that it outweighs the risk of punishment. Instead of demonizing players like Carmona and Nunez, it is time to look at the system.

In Japan, younger players are able to develop in a system that gives them the ability to play in their homeland with the possibility of moving to the major leagues in America. In Latin America, players feel the need to break the law to be part of the system. So in one week, Yu Darvish, who has never pitched in even the minor leagues in America, got a $60 million contract after a team paid $51.7 million for the right to give him that contract. During that same week, we learned that, once again a player lied about his identity in an effort to get a portion of that amount of money.

In the end, both players will succeed or fail based on what they do on the field. How they got the opportunity doesn’t affect their ability on the field.

Major League Baseball needs to address the differences. If baseball officials are going to continue to encourage teams to deal individually with international players, they need to address the extreme differences in the system. It is not an easy task. How can baseball expect players not to take the route of Carmona and Nunez when the Darvish situation points out the inequity?

As for the Indians:

While Carmona has not lived up to the promise he flashed in 2007, he has shown, when healthy, to be able to provide a decent set of 30-plus starts and 200-plus innings each year.

In conjunction with this news, it appears the Indians finally pulled the trigger on obtaining Kevin Slowey. The Indians have been interested in him anyway, so this was not in direct relation to Carmona’s issues, but the trade was probably hastened. Carmona will likely end up on the restricted list, leaving the Indians with a hole in the rotation but with an extra $7 million. The Indians gave up Zach Putman, a young pitcher who may have competed for a bullpen position this year.

The Indians have other options for the rotation. David Huff and Jeanmar Gomez will be among those who compete with Slowey for spots behind Justin Masterson, Ubaldo Jimenez, Josh Tomlin and Derek Lowe. In the end, the Indians' depth should be able to cover for Carmona's absence with limited hardship.
Posted by: Mat Kovach

January 12, 2012

On Ryan Madson: Parsing Boras’ comments

Philadelphia general manager Ruben Amaro, Jr. and super-agent Scott Boras are having a skirmish of words regarding the Phillies' non-signing of closer Ryan Madson. Boras seems to be saying the Phillies reneged on their offer of $44 million over four years, while Amaro says, "there never was an agreement."

Obviously, since Madson is now a Cincinnati Red, Amaro is correct that there never was an agreement—at least not one so formal that it led to a signed contract. However, there may have been a verbal agreement, a handshake deal, a nod-and-wink, nudge-nudge, say-no-more pact that simply needed to be put to paper and submitted to Major League Baseball's offices for confirmation.

Or there may not have been. If we read exactly what Boras said, it becomes clear that he did not say that he and the Phillies had agreed to a four-year, $44 million contract.

Boras first stated, "We never rejected any offer from Philadelphia at four years and $44 million. We advised Philadelphia that we would agree to such a proposal." He followed that comment up with, "We agreed to a four-year, $44 million offer, and Philadelphia decided to sign someone else."

Let's take a look at the first sentence. While he and Madson never rejected the contract in dispute, Boras didn't say the Phillies made such an offer. You can't reject an offer that isn't made, so Boras may not be lying. Also, "never rejected" is not the same as "accepted."

His second sentence says they would have taken such a deal. Hey, so would I, but no one made me such an offer and, again, maybe the Phillies didn't make one to Boras for Madson's services.

The last sentence uses "we" vaguely. Which "we" agreed to the four-year, $44 million contract he mentions? It could be that "we" is Boras and Madson. Perhaps those two men decided between themselves that such an offer would be acceptable. Good for them, but if the Phillies never tendered such a deal, there was nothing for Boras to accept.

Scott Boras obviously is a phenomenally successful agent. He has made his clients billions of dollars and himself a nice cut of those salaries. He produces gold-lettered, platinum-laced, diamond-encrusted binders to demonstrate how clients such as Alex Rodriguez and Prince Fielder are the greatest athletes in the history of the universe and should be paid like minor deities. Boras does his job extraordinarily well.

But his success does not come from blunt directness. It comes from deception, obfuscation and borderline flat-out lying. Boras knows where that borderline is, and he has no fear of going up to it and nudging his toes right up against that line. It's what he gets paid so well to do.
Posted by: Greg Simons

December 29, 2011

2011 A’s vs. 1997 Marlins

In 1997, the Florida (now Miami) Marlins won the World Series, bringing joy and enthusiasm to the team and its fan base. Days later, the destruction of the team began as management shipped off nearly every high-priced veteran it could to save money.

The excuse was that the team couldn't afford such a large payroll without a larger fan base, and more fans would come only if the team got a new stadium. Well, it took nearly 15 years, but that new stadium is finally a reality, and it looks to be a stunning ballpark, though the structural integrity and financing of the facility have been called into question.

In 2011, the Oakland A's went 74-88. There were no victory parades, but the team's teardown has been as thorough as the Marlins' was 14 years ago.

Starting pitchers Trevor Cahill and Gio Gonzalez have been shipped off to the Diamondbacks and Nationals, respectively, in return for a gaggle of hot prospects. Middle reliever Craig Breslow joined Cahill in the move to Arizona, while closer Andrew Bailey and outfielder Ryan Sweeney were just sent to Boston for three more promising youngsters.

Josh Willingham, David DeJesus, Coco Crisp and Hideki Matsui—all solid, if unispiring, offensive contributors—will not be returning to Oakland. The roster has been stripped so bare that at one point Sweeney was listed on the A's official Web site depth chart as the starting outfielder at all three positions.

Like the Marlins, the A's say they need a new ballpark to compete. And with the Angels signing Albert Pujols and C.J. Wilson, and the Rangers coming off back-to-back World Series appearances and acquiring the rights to Yu Darvish, they certainly need something to keep pace.

Rumors abound that the team soon will be allowed to move to San Jose, though Bud Selig's Blue Ribbon Committee that has been studying the issue for a few years now has not made any formal proposals. Given how long the Marlins waited for a new facility, A's fans shouldn't hold their breath.

When the Marlins tore things down, they shaved massive financial commitments from their books, but at least they had a title to show for their investment. The A's are dealing away young, cheap, cost-controlled talent for even younger, even cheaper, cost-controlled potential. And they have nothing to show for their efforts other than the possibility of being the cheapest, most anonymous ball team since the 1998 Marlins.

Things were awful in South Florida in '98, as the team fell from 92 victories the season before to a mere 54 wins. The A's starting point is 74 wins. An equal 38-game dropoff would yield a 36-126 record that would make the 1962 Mets look like world beaters.

Oakland is unlikely to be quite that bad in 2012 and beyond, but it's going to be horrendously ugly for the next few years. It may even be so bad that this monstrosity will look good by comparison.
Posted by: Greg Simons


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