Tuesday, July 31, 2007

Prospects, Used Cars, and Schuerholz

Ah, July 31st, when a young man's fancy lightly turns to thoughts of deadline deals.

A quintessential deadline deal--contender deals prospects to last-place team for star player--was "completed" Monday, with the Braves sending four young players to the Rangers for Mark Teixeira and Ron Mahay. The general consensus seems to be that the Rangers did pretty well here; Jarrod Saltalamacchia and Elvis Andrus are more likely to be a part of the next Rangers playoff team than Teixeira was, and this was the best offer Jon Daniels received, at least among the publicized ones.

However, at least one analyst says we have to consider John Schuerholz's track record in trading prospects: he has done a good job of trading young'uns at the peak of their value, and watching them flame out elsewhere. Does Schuerholz have inside information on his own minor leaguers that leads him to believe they will not become Major League stars?

At least two well-known recent books have discussed why used automobiles are often lemons. The buyer is suspicious that the car is a lemon, so he is unwilling to pay full value for it. Since this brings the vehicle's market price down substantially, the owner of a well-functioning car will pull out of the deal altogether rather than sell at a loss. Now, the only sellers who can profit from the transaction are those whose cars have significant flaws. Naturally, all the used cars that are actually sold are likely to have issues.

Minor leaguers don't carry such a big information gap. Although the Braves certainly know more about their own prospects than the Rangers do, Texas's front office has surely spent many hours scouting the players they acquired--especially Salty and Andrus--and looking over their statistics for meaningful numbers. If there is a hole in any of their games, the Rangers probably know it. Schuerholz and the rest of the Braves officials may know something Daniels doesn't, but it's not all that likely.

So is this "track record" simply an illusion driven by small sample size and a few memorable instances? Looking closer, the big answer appears to be...I'm not sure.

Yes, this is the man who pawned off Andy Marte and Dan Meyer on unsuspecting rubes. Melvin Nieves probably wasn't a fair return for Fred McGriff, all things considered. Damias Moss (if you count him) was never good to begin with, but his luck ran out after leaving Hotlanta.

However, Schuerholz is not without his flaws--including writing. As GM of the Royals in the '80s, he gave away David Cone, Cecil Fielder, and Ken Phelps for peanuts. He has had few awful trades with the Braves--save for his need to turn a 23-year-old Jermaine Dye into Michael Tucker--but he did give up on Jason Schmidt, Odalis Perez, and Adam Wainwright, among others. It's also hard to argue that he traded "failed" prospects like Wilson Betemit and Bruce Chen at the peak of their value. Same goes for Jason Marquis and Matt Belisle. This is just a cursory glance at his track record, not a comprehensive one, but I don't see a huge trend of former Atlanta prospects flaming out in other organizations.

So where did this reputation come from? I think the spectacular failures of Marte and Meyer are fresh in the minds of even the most level-headed analysts, especially since Tim Hudson and Edgar Renteria have done quite well in Brave uniforms.

It wouldn't surprise me at all to see Pits (Saltalamacchia's name stretches from armpit to armpit on his jersey) become an All-Star catcher, just like it wouldn't surprise me if he has to move to first base and can't hit well enough to stick there. Prospects are like that, Braves or otherwise.

Monday, July 30, 2007

Home Run Derbies and Sophomore Slumps

The "sophomore slump" in sports occurs when the Rookie of the Year winner sees his performance decline in his second season, even though most players improve from year 1 to year 2. Sabermetricians know that this is not a real effect but rather the impact of regression to the mean.

Among all the first-year players in the league, the Rookie of the Year is likely to be one who has played "over his head" with statistics that are better than his inherent level of talent. The next year, he doesn't figure to be as fortunate, and his numbers are likely to decline somewhat. This effect is not limited to rookies; the league leaders in batting average and home runs will usually see those figures decline next year as they regress to the mean.

There is another example of regression to the mean in baseball: the so-called "Home Run Derby curse". I'm not sure if this term existed before Bobby Abreu, but now some players and analysts believe that participation in the Home Run Derby causes that player to suffer a power outage in the second half.

Beyond the Box Score tackled this issue today. Their conclusion--with sufficient sample size warnings--is that participants see their home run output decline slightly in the second half. But this is exactly what we should expect! In order to get an invite to the Derby, you must have a prodigious home run total on July 1. (Or hope that they repeat the 2005 format and you were born in Australia.) If you are among the best of the best, you are likely to slow down in the second half.

I would not be surprised one bit to see that the population of All-Stars declines as a whole in the second half of the season, given that many All-Stars are simply there because they've had the best three months of their life. If you're batting .378 at the break, are you really likely to keep that up?

This kind of "curse" logic is to be expected from an ESPN announcer, but I hope that the guys at Beyond the Box Score know better.

Stoic Fans?

Today, MLB.com published an article that seems to imply that White Sox fans are sticking by the team even in its disappointing season. Are the Sox fans results-disoriented?

Nope.

I'm not singling out Sox fans, because attendance is heavily tied to winning percentage for every team. However, this article ignores two obvious and important points:

- Most seats are sold well in advance, so the owners of tickets for August and September games at U.S. Cellular had reason to believe they would be watching a contender at the time they purchased them.
- It is not at all rare to see more fans support the visiting team at the end of a game at Tropicana Field, especially when the Devil Rays are getting blown out. If this situation were a steak, it would have a thick layer of char on the surface.

I think it's a safe bet that walk-up sales will decline for the Pale Hose as the year goes on, but that wouldn't make for a good story, would it?

Sunday, July 29, 2007

Bowden Learns Nothing

Jim Bowden faced a tough task this past off-season: Build a somewhat respectable lineup out of Ryan Zimmerman and other teams' discarded parts.

To Bowden's credit, he handled this task well. He avoided paying big dollars to any number 3 (or worse) starters, rather than go the K.C. route of paying $11 million for three extra wins he doesn't need anyway. He let Alfonso Soriano walk, rather than sign over the deed to Fort Knox. He fleeced Bill Bavasi out of Chris Snelling and Emiliano Fruto so that Jose Vidro could block Adam Jones instead of Felipe Lopez.

And in his best move, Bowden waited until Dmitri Young and Ronnie Belliard had nowhere else to play, then signed them for a total of $1.25 million in non-guaranteed salaries. These signings carried almost no downside and a significant upside, in the form of a convenient three-step plan:

1. Sign veteran to one-year, make-good deal
2. Veteran makes good
3. Team trades veteran to contending team for prospects, or lets him walk at the end of the year and collects draft pick compensation

The Nats got steps 1 and 2 right, but they seem to have hit a snag. Rather than cashing in their chips, they've now inked Young and Belliard through 2009 for $13.5 million guaranteed. Of these moves, I have one question:

Why!?!

I'm sure the Washington fans have grown to appreciate the presence of Dmitri Young, a recovering alcoholic who last year choked a female police officer and was released from the Tigers--a team badly lacking a left-handed impact bat at first base--under mysterious circumstances. Strictly as a player, though, Young is the kind of guy you should take a flier on, but not commit to long-term, especially when your team has no hope of contending before the end of the contract. Billy Beane passed this exam with Frank Thomas last year; Bowden just flunked it.

Belliard's extension is for a lot less money than Young's, practically a write-off in baseball terms, but I still don't like it. Major league GMs (should?) know that second base is a buyer's market right now. Since the end of the 2006 season:

- Marcus Giles was non-tendered by the Braves and given 1 year and $4 million by the Padres
- Adam Kennedy signed for an average annual value under $4 million
- Belliard's only offer was a minor league deal from the Nationals
- Chase Utley, one of the most valuable players in baseball, signed a seven year extension for $41 million less than a washed-up Barry Zito got from the Giants
- Tad Iguchi was traded for a non-prospect, straight-up, to a contending team desperate for second base help

Then you have 2005's "freely available talent" guys like Brandon Phillips, Dan Uggla, Ty Wigginton, et al. The point is that if you want to find a better second baseman than Belliard for a comparable price, it can be done.

But that isn't the most important mistake here. Blowing $13.5 million isn't a big deal for a playoff contender, but that phrase describes the Nationals about as well as does "magic picture that if you stare at it long enough, you see something." The prospects or draft picks the Nationals could have received had the potential to be a part of the next Washington playoff squad. Young and Belliard will not be.

Trading $13.5 million and future playoff chances for a couple of meaningless wins in the present is just dumb. I hope Young and Belliard bring some fans into the new D.C. ballpark, because the Nats' place in the standings certainly will not.

Saturday, July 28, 2007

Bad Coco

In the wake of today's blown save and loss for Francisco Cordero, critics are quick to point out his crazy-looking splits: 8.62 ERA on the road, 0.33 at home. The solution is clear: Rest Cordero's arm when the team goes on road trips, so he can give them 80 home innings per year.

The Brewers are a smart organization, so why don't they try this? Probably because each member of their front office passed Stats 101. It's well-known that when you deal with a small sample size, you often get results that are nowhere near the true mean. This is why opinion polls seek answers from more than 20 people. Unfortunately, relief pitchers often force us to work with small samples. This can lead to silly conclusions, like the assumption that Brad Lidge somehow lost the ability to pitch last year, or that Jose Valverde would be perpetually unable to close. Or that Francisco Cordero can't pitch on the road.

Let's look at his base skills entering today, ignoring the hits and runs columns:

Home: 27 IP, 11 BB, 38 K, 0 HR
Road: 15 IP, 3 BB, 19 K, 1 HR

Yeah, I think he'll be fine.

Friday, July 20, 2007

What Do Baseball Stats and Temperature Scales Have in Common?

If you're like me, you have a hyperactive mind, one that makes unnatural analogies and connections. That may not make me a hit at parties, but it does provide me with a unique perspective on some things.

For example, the average student thinks about absolute zero and the Kelvin temperature scale long enough to pass a test, then files them away in the back of his mind. I took a different tack, asking why we don't measure everyday temperatures in Kelvin. The answer is fairly intuitive once you think about it: the Fahrenheit (and to a lesser extent, Celsius) scale makes it far easier to interpret a weather forecast.

100 degrees Fahrenheit is considered hot weather for most of us, and 0 degrees very cold. We understand this because 100 is a relatively high number and 0 a low one. Now imagine that instead of 100 and 0, the forecasts read 310 K and 255 K. Those are both fairly high numbers, and the difference between 310 and 255 sounds a lot less significant than the gap from 100 to 0. Day-to-day temperatures, when expressed in Kelvin, will all look closely grouped together, minimizing the appearance of change. Meanwhile, all the Kelvin temperatures between 0 and 200 are completely useless because we will never encounter them. All this makes the Kelvin scale a very poor choice for comparing weather conditions.

By now, you're surely asking what all this has to do with baseball. The answer is that we have many Kelvin scales in baseball stats, where zero (absolutely no production) is a useless baseline because no one ever approaches it. These include batting average, runs, and even OPS. We practically never encounter a batting average below .200 or an OPS below .600. Why confuse the issue by utilizing a scale with so much wasted space, and where most of the players are closely grouped together?

This is especially relevant because we already have a baseball equivalent of the Fahrenheit scale. It's called VORP, and it expresses each player's value in terms of how many runs he has contributed to his team. In measuring on-field production, runs are probably the easiest possible baseline to understand and interpret. Instead of needing a graphing calculator to make sense of Barry Bonds' 1.421 OPS or .362 batting average in 2004, we can say he was worth 132 runs. No more, no less.

Are sportswriters happy that they have this catch-all (except defense) metric at their disposal?
No, they bitch and moan about how much better the world was when they were younger, before technology came along and ruined everything. I suggest that for the next year, Murray Chass and his followers use the Kelvin scale when deciding how warmly to dress for a day at the ballpark, and see if it improves their experience.

Joe Morgan is Results-Disoriented

I give him a lot of flak, but Joe Morgan proved that doesn't let actual outcomes affect his judgment. A+, would read again.

Tuesday, July 17, 2007

Unenforced Rules

Bill James, in a recent interview, compared steroid use in baseball to abuse of the traveling rule in basketball. James, who probably aced the analogies section of his SAT, argues that it's unfair to expect the players to follow rules that are never enforced.

I don't chime in much on the PED issue, because I'm not well-versed on the subject, but James is clearly correct here. How often do you see pitchers argue that they don't get a call on a chest-high pitch, even though it is clearly a rulebook strike? How about second basemen complaining when runners slide five feet out of the baseline to take them out on a double play? Rafael Betancourt takes more than 12 seconds to throw on virtually every pitch, yet it was a national story when he was finally penalized once for doing so--by the ump calling an automatic ball. Take that, you scoundrel!

Think about the last 20 times you've watched a football game and seen a wide receiver trap (rather than catch) a pass while sliding or diving for it. What did they all have in common? The receiver acted like he caught the ball every time. Why shouldn't he? If he convinces the refs, he gains some "free" yards for his team or forces the opponents to use one of their challenges to overturn the call. If he fails, there's no loss; the team gets the same incompletion either way. Just as in many situations in sports, there's absolutely no incentive for him to play honestly.

What incentive did players have not to juice? Essentially none, except for the side effects. One of the lessons of the Freakonomics/Sabernomics era is that incentives are affecting people's decisions everywhere around us, not just in the fantasy world of Econ professors. If a player is allowed to gain a competitive advantage with no repercussions, why should we expect him not to do so?

If the players really had such easy access to PEDs in the 1990s, I'm surprised such a small fraction of them actually used. Perhaps those who chose not to considered the health costs of using steroids, but maybe they just weren't comfortable "cheating" to get ahead. I doubt the same players refuse to take out the pivot man on a double play, or occasionally fib about catching a line drive that they actually trapped. Hank Aaron once had a home run taken away because he stepped far out of the batter's box to hit it. I find it hard to believe that he only did this once in his career, but I don't see him offering to take the dubious homers off his stat sheet.

Sure, PED use is immoral. But if everyone else at your company was bending the rules to get ahead, and you knew you would not be punished for joining them, would you really sit back and get passed over for promotion after promotion? If so, you're probably a better person than me, but you might well be the lowest paid employee at your office. It's just one of the many trade-offs we all encounter in life.

Sunday, July 08, 2007

The Economics of Hometown Discounts

How much of a "hometown discount" is Mark Buehrle really giving if he agrees to a four-year, $56 million contract with some no-trade protection? How much should he be willing to give?

The answer to the second question is inexact, but it's greater than zero. Most people aren't taking some important factors into consideration when evaluating the potential deal. Let's set aside what Buehrle is really worth and focus on the discount. Why are the White Sox justified in asking Buehrle to take less money to extend his contract now?

Risk Management

This past offseason, the Cardinals gave Chris Carpenter--already signed through 2008 at a favorable price--another $49 million for his 2009-11 seasons, plus an option for 2012. Joe Sheehan and I both called the move more risky than good. I'm not letting results dictate the merits of the decision, but Carpenter's injury this year was an illustration of an important concept: to minimize risk, you ideally want to wait as long as you can to make a decision, especially with pitchers and long-term deals. There's no way Carpenter receives that extension or anything close to it if they negotiated today.

What does this mean for Buehrle? Sure, he probably won't get hurt in the second half, but the risk is still significant. He should be willing to take less money to account for this.

Cost Certainty

Teams are not the only ones trying to minimize risk. Every year, young stud players sign through their arbitration years for less money than they'd be expected to make with normal career paths. This is a move that makes perfect sense for both sides: the player is financially set for life with one contract regardless of how he performs, while the team is expected to save money in the long run. In a way, the team is acting like an insurance company, agreeing to "cover" the player in case of a catastrophic injury or strongly diminished skills.

Sometimes, this leads to players being ridiculously underpaid. Check out the salaries for guys like Grady Sizemore, Travis Hafner, Victor Martinez, and Jhonny Peralta. Of course, for every Sizemore there's an Eric Hinske who has worn out his welcome by the end of his contract. Still, all of these signings made sense for the players at the time. It's a lot easier to set up your life knowing you have $15 million coming your way, rather than wondering if you'll ever make more than the Major League minimum.

Anyway, back to a more relevant example. After the 2002 season, the Braves offered Greg Maddux arbitration in order to get draft pick compensation, "knowing" he would reject it and sign elsewhere. Maddux ended up accepting the offer, winding up with one year and $14.75 million when he probably could have gotten something like 4 years/$48 million on the open market. A year later, Maddux signed for two years and $15 million guaranteed, leaving a fortune on the table.

Buehrle is unlikely to be this stupid at the end of the year, but like Maddux he might misjudge the direction of the market and expect to find a pot of gold at the end of the rainbow. Crazy market or no, there are no guarantees that an $80 million contract will still be waiting for his signature in November.

Draft Pick Compensation

Let's say Mark Buehrle has a twin brother who will also be a free agent this winter and is his equal as a pitcher. If the Sox let Mark go and sign Romulus Buehrle, what happens?

Aside from an interesting Thanksgiving in the Buehrle household--can you imagine how awkward things must have been for the Weavers after Jered cost Jeff his job with the Angels?--
the Sox would give up their second-round draft pick (because they will certainly pick in the top 15) and receive two picks, one in the supplemental round and the other probably in the late first round since Buehrle will likely sign with a contender.

That's a hell of a trade, one draft pick for two higher ones. What are the better picks worth? Given the price of mediocre veterans in today's environment and how underpaid draft picks are, I think the value of this trade-up is in the neighborhood of $4-5 million. The White Sox front office probably has a better handle on this number than I do.

If the Sox can replace Mark Buehrle with an identical pitcher and gain a $4-5 million profit by doing so, this necessarily means that they should be willing to pay that much less to sign Buehrle.

Other Factors


Buehrle's familiarity with U.S. Celluar Field, his American league opponents, etc. may help his stats, although it is hard to determine if this is really the case. He does have a lower career ERA at home than on the road despite pitching in a bandbox. If pitching for the White Sox will give him more wins and a lower ERA over the next four years--and remember that we're not sure this is true--then that will positively impact his next contract and should be factored into his current deal.

I don't buy too much into the media's depiction of how hard it is to play well in New York, but it is certainly true that if you don't perform after signing a big money deal to pitch for a team like the Yankees, the fans will make things less pleasant for you. Ask Carl Pavano how his quality of life has been since he came to the Bronx. Meanwhile, fans tend to stand by their aging former stars; Craig Biggio still gets a big pop at home games. This is a negative externality cost of signing elsewhere, making Chicago more attractive.

Conclusion

The $56 million offer is not nearly as bad for Buehrle as you might believe. He shouldn't necessarily take it, but it's a fair deal.

Mark Buehrle

Mark Buehrle is in the middle of negotiating an extension with the White Sox, and the media are all over how the deal includes a "hometown discount" at four years/$56 million, and the Sox should be happy to take it. The MLB Trade Rumors blog even went so far as to say:

"The fact remains that the team rejected a heavily discounted contract to retain their 28 year-old ace. It's damn near inexcusable to me, and I'm not even a Sox fan."

After last year's free agent spending spree, it's easy to lose sight of the value of a dollar in baseball. Looking back, how many of last offseason's marquee contracts have pleased the teams that signed them?

Alfonso Soriano? He's been fine, but no sane general manager today would cough up $136 million for a corner outfielder with a .900 OPS. Hell, Pat Burrell has been at .890 and .892 the past two years and he's not even starting. Soriano and his agent should thank their lucky stars that the Cubs had an epic 2006 collapse and wanted a quick fix.

Barry Zito? Hell, no.

Vernon Wells? Get real.

Dice-K? The Red Sox would probably sign him with 20/20 hindsight, but I doubt they'd be ecstatic about the deal they're getting.

Carlos Lee? See the Soriano entry, except that Lee has never had a season with a .900 OPS and in the field, he makes a good DH.

I won't even get into megabusts Kei Igawa, Jason Schmidt, Juan Pierre, or Vicente Padilla. The point here is that the typical big free agent contract returns poor value on the dollar. This has been true basically every year except maybe 2003, when the market deflated for one season and stars like Miguel Tejada and Vladimir Guerrero signed for below-market prices.

What about Buehrle, specifically? He resembles Zito in many ways: He's been one of the very best pitchers in baseball over the past seven years, but he's a finesse pitcher whose strikeout and groundball rates have both declined substantially over the past few years. In other words, there are a lot of indications he won't age well.

Whatever team signs Buehrle's next contract needs to realize that they're paying for what he will become, not what he has been. Brian Sabean flunked the test with $126 million at stake. Will Kenny Williams pass?

In my next entry, we'll go into the economics of hometown discounts, and why they aren't as good a deal for the team as you may think.

Friday, July 06, 2007

Bat Throwing

In Little League, there's a widespread rule that if you throw your bat, you're out of the game. It doesn't matter what you were aiming at, what you hit, or any of that jazz. You throw, you're gone.

When I was ten, I thought this rule was stupid. Twelve years older and wiser, now I understand why it exists. To not have this rule is like assigning a bigger penalty for murder than attempted murder. Why should someone be rewarded just because his shot missed the victim's heart by a few inches?

If you saw tonight's Twins/White Sox game, you probably know why I'm writing this. Jim Thome lost his grip on his bat on the first pitch of a plate appearance, sending the bat flying. Apparently he learned nothing from this, as two pitches later, he lost the bat again, this time injuring Twins catcher Mike Redmond (remember him?) and the home plate ump.

I'm not sure punishing Thome is the right move, as this was clearly an accident, but it makes sense to me that if a player loses his grip on a bat, he should be required to either get a new bat or add some pine tar to the current one. This injury was a fluke, but we see plenty of bats get thrown into the stands every year. Fans down the baselines are prepared for line drives coming at them, but not for flying bats.

If a player loses his grip on a bat once, it greatly increases the probability he will lose his grip again later. MLB needs to do whatever it can to cut down on the injuries that result from these instances. This rule would be a good start.

Wednesday, July 04, 2007

Colorblind

Ever talk with a poker player at the end of a session where he's gone from being stuck $1000 to just $50 down? He'll probably be ecstatic about the recovery. Meanwhile, a player who won $1000 and lost most of it back will probably grumble about not quitting sooner. If you had to guess who was ahead and who behind for the night, you wouldn't know it from their moods.

How about a baseball team that's playoff-bound but has lost its last six games? Everyone immediately begins asking what's wrong with them, as if they have severe problems that need to be fixed immediately or the team is doomed. Meanwhile, a below-.500 team that's on a winning streak often looks indestructible.

It's just a fact of life that people are obsessed with how things have gone lately, which often clouds their judgment about how much progress has really been made. It's hard to realize in the middle of a losing streak, but the real barometer of your achievement is its absolute size, not how you got there.

I think about this with regard to MLB's push to get more African-Americans in the game. Right now, the percentage of Blacks among USA-born baseball players is basically the same as that of the overall US population (12%). If this percentage had made a slow push in the 60 years since Jackie Robinson's debut, gaining a little at a time until now, the NAACP would probably be pleased with the overall results, though justifiably mad that it took so long to get there. Instead, they're upset. While the participation of Asians and Hispanics in MLB has risen in the past thirty years, African-Americans have come down from a peak of nearly 30% of MLB's players to under 10%. In a sense, Blacks--like the 2006 Tigers--have had a very good season but have ended it on a big cold streak.

We all remember the '06 Tigers, right? They were left for dead in the playoffs after closing the season 19-31, even though they still had one of MLB's best records for the season. Eight games later, they had blasted the competition and won the AL Pennant. Everyone focused on 19-31 and forgot about 95-67.

If the percentage of Blacks in MLB is consistent with the national population, then that's not the problem, even if that number has come down from its peak. On the other hand, it certainly is true that inner-city children have less exposure to baseball than rich suburbanites. If the real issue is equal opportunity, then MLB should focus on providing opportunities to the less fortunate regardless of skin tone, instead of letting color and recent performance blind them.