Monday, December 31, 2007

Moneyball Fallacy

Is it possible to rid the world of the pernicious misreading of Moneyball that Billy Beane's "paradigm shifting strategy" somehow permanently minimizes the profound discrepancy between large- and small-market teams?

Beane developed a different method of evaluating players that, so long as the Oakland A's were the only team using the method, provided the A's with some advantage that might offset the revenue advantage of the Yankees, Red Sox, &c. Once Beane's approach was adopted by other teams, he lost the advantage.

If the Red Sox and the A's use basically the same approach to evaluating player A and Boston has more money to spend, Boston's deep pockets means that the Red Sox are going to get and keep the player. (See Kevin Youkilis.) When the evaluations strategies are the same, revenue goes back to being the key factor.


Todd said...

I totally agree. MLB needs a fix and Moneyball is just a short-term stop-gap.

"44" said...

I read Moneyball when it was published a few years ago. My recollection is not that BBeane thought he'd discovered one statistical marker that would keep a small-market club like OAK perpetually competitive. Instead, Moneyball means collecting and applying information in unconventional ways to keep a club one step ahead of the market.

Realizing OAK's limited resources, BBeane sought to allocate them in a manner that would produce the best results w/in his budget. He sought undervalued assets in the market, those qualities that made players and teams more likely to succeed but that were available inexpensively.

Home runs, for instance, were tied to "star power" and big money contracts. But homers, he determined, had less to do w/ winning baseball than the ability to get on base consistently. Playing Moneyball meant letting other teams chase expensive sluggers while OAK acquired OBP-machines on the cheap.

Similarly, BBeane concluded that the market tended to overvalue raw tools vis-a-vis developed skills. Analyzing draft history, he saw that "toolsy" high school players were far less likely to become productive major leaguers than less flashy but more polished college draftees. OAK took advantage of this information about the market by focusing its draft strategy on collegians, who joined the franchise already well developed and were thus more likely to reach the big leagues quickly.

That BOS and other wealthy clubs began putting a premium on OBP and paying bigger bonuses to collegians than high schoolers means the market has corrected itself. That's not a repudiation of the Moneyball theory. It's just an indication that BBeane needs to continue to mine his data to find other opportunities in the market.

BBeane and OAK will always face an up-hill battle to be competitive w/ clubs that can carry much higher payrolls. While they've regressed a bit in recent years, overall they've done a great job in acquiring and developing talent. They have a good idea of when to sign guys and when to let them go -- see THudson, MMulder and BZito in recent years. While they will have to adjust constantly to conditions in the market, there's ample reason to belive that BBeane and OAK will continue to succeed w/ the Moneyball approach.

Sean Roche said...

I don't think that Beane misunderstood the significance of his approach. I think Moneyball makes clear that Beane knew he'd lose his advantage once other teams caught on.

The problem is with other people, notably sportswriters, misapplying the lessons of Moneyball.