Monthly Archives: August 2009

Did Minnesota Hire the Right Rambis?

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Kurt Rambis has left the World Champion LA Lakers to be the head coach for the Minnesota Timberwolves.  Marc Stein of ESPN.com reports the following:

Long considered a potential heir apparent to Los Angeles Lakers coach Phil Jackson, Rambis was lured away from Jackson’s staff by a four-year deal believed to be worth in excess of $8 million.

Wolves owner Glen Taylor confirmed ESPN.com’s report in an interview with the St. Paul Pioneer Press late Saturday, telling the newspaper that he expects Rambis to formally sign the contract Monday.

“Kurt, with his experience playing and coaching for a winning organization and working under people like Pat Riley, will bring a lot to our organization,” Taylor told the Pioneer Press. “In meeting with him and talking to him, I know he’s very excited about having an opportunity to help build his own team.”

We don’t know what kind of team Rambis will build in four years.  We do suspect, though, it will be a better team than what he’s inheriting.  Here is what the veteran players Minnesota will employ in 2009-10 did last season (according to the roster reported at ESPN.com, WP48 = Wins Produced per 48 minutes):

Ryan Gomes: 2,614 min., 0.6 Wins Produced, 0.012 WP48

Kevin Love: 2,048 min., 8.9 Wins Produced, 0.208 WP48

Quentin Richardson: 1,894 min., 3.9 Wins Produced, 0.098 WP48

Al Jefferson: 1,836 min., 6.1 Wins Produced, 0.160 WP48

Darius Songaila: 1,521 min., -0.8 Wins Produced, -0.024 WP48

Brian Cardinal: 909 min., -0.6 Wins Produced, -0.033 WP48

Damien Wilkins: 626 min., -0.6 Wins Produced, -0.046 WP48

These seven players are the only players who logged at least 500 minutes last season.  The team also has Chucky Atkins (-0.120 WP48 in 413 minutes), Corey Brewer (0.053 WP48 in 307 minutes), Oleksiy Pecherov (-0.014 WP48 in 277 minutes), and Bobby Brown (-0.045 WP48 in 256 minutes). 

The Wins Produced of all these players only sums to 16.5.  The team has also added Jonny Flynn and Wayne Ellington (and maybe Ricky Rubio) in the draft.  Of these, Flynn is most likely to play significant minutes in 2009-10.  Flynn’s performance in college, though, suggests he may not be very productive next year (although that’s just a suggestion, college performance does not predict perfectly).

All of this suggests that the Timberwolves might benefit more from hiring Rambis the player, rather than Rambis the coach.  Of course, Minnesota would have to turn back time to get Rambis the player.  If they did, though, it would help.  How much would it help? Before we answer this question, let’s ask another:  How many veteran players currently on Minnesota’s roster posted a higher WP48 last year than what Rambis did for his entire career? Continue reading →

Portland Misses and Misses and… Wins?

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Who was the second best team in the Western Conference in 2008-09?  For many NBA fans, the answer to this question would take a bit of thought.  It’s well understood that the Cleveland Cavaliers, Boston Celtics, and Orlando Magic dominated in the East.  And the Lakers led the West.  But after the Lakers, who would be next in the West?

If we focus on won-loss record, second best is a three-way tie between the Denver Nuggets, San Antonio Spurs, and Portland Trail Blazers.  Each of these teams won 54 games.  In evaluating teams, though, we tend to think (at least, this is what I think) that efficiency differential (offensive efficiency minus defensive efficiency) is what matters most.  And when it comes to efficiency differential, the Portland Trail Blazers mark of 5.9 trumps what we saw from San Antonio (4.1 differential) and Denver (3.5 differential). In sum, despite what happened in the playoffs, Portland was the second best team in the Western Conference during the 2008-09 regular season.

Portland’s objective this summer was to close the gap between them and the Lakers.  It appears, though, that this gap has actually gotten bigger. The Lakers were essentially able to exchange Trevor Ariza (a former second round pick of the Knicks) for All-Star Ron Artest (yes, he did make an appearance in this game in 2004).  Meanwhile, the Blazers made every effort to sign Hedo Turkoglu, only to have Turkoglu sign with Toronto at the last moment.  Then the Blazers turned to Paul Millsap, only to see the Utah Jazz match Portland’s offer.  Finally, in an apparent act of desperation, the Blazers finally got Andre Miller to accept their money.  This sequence of events had led Ken Berger of CBS Sportline to list the Blazers as one of the NBA’s losers in the 2009 off-season.  

But did the Blazers really fail this summer? 

To answer this question, let’s start with where the Lakers and Blazers finished the 2008-09 regular season. 

The Lakers in 2008-09

Here are the top 10 players – in minutes played – for the Lakers last season (WP48 = Wins Produced per 48 minutes):

Pau Gasol: 2,999 min., 15.6 Wins Produced, 0.250 WP48

Kobe Bryant: 2,960 min., 15.0 Wins Produced, 0.244 WP48

Derek Fisher: 2,441 min., 2.6 Wins Produced, 0.051 WP48

Lamar Odom: 2,316 min., 10.6 Wins Produced, 0.220 WP48

Trevor Ariza: 1,998 min., 8.0 Wins Produced, 0.192 WP48

Andrew Bynum: 1,446 min., 4.8 Wins Produced, 0.158 WP48

Sasha Vujacic: 1,293 min., 2.7 Wins Produced, 0.099 WP48

Jordan Farmer: 1,192 min., -0.9 Wins Produced, -0.035 WP48

Luke Walton: 1,166 min., 2.2 Wins Produced, 0.091 WP48

Vladimir Radmanovic: 771 min., 1.5 Wins Produced, 0.094 WP48

Totals for Top 10: 18,582 min., 62.2 Wins Produced, 0.161 WP48

The Lakers won 65 games.  But their efficiency differential of 7.8 (and correspondingly, the team’s Wins Produced) was consistent with a team that won 61 games (wins that can essentially be connected to the ten players listed above).  So the Lakers were not quite as good as their won-loss record indicated.

The Blazers in 2008-09

LaMarcus Aldridge: 3,004 min., 6.7 Wins Produced, 0.107 WP48

Brandon Roy: 2,903 min., 15.3 Wins Produced, 0.253 WP48

Travis Outlaw: 2,246 min., 2.6 Wins Produced, 0.055 WP48

Steve Blake: 2,188 min., 5.3 Wins Produced, 0.117 WP48

Rudy Fernandez: 1,993 min., 6.9 Wins Produced, 0.167 WP48

Joel Przybilla: 1,952 min., 11.7 Wins Produced, 0.288 WP48

Nicolas Batum: 1,454 min., 3.7 Wins Produced, 0.123 WP48

Greg Oden: 1,314 min., 4.2 Wins Produced, 0.154 WP48

Sergio Rodriguez: 1,225 min., 2.2 Wins Produced, 0.087 WP48

Channing Frye: 746 min., -2.3 Wins Produced, -0.146 WP48

Totals for Top 10: 19,025 min., 56.4 Wins Produced, 0.142 WP48

Again, Portland’s Wins Produced for the entire team was 55.1; so the Blazers were about six wins off the pace set by the Lakers.

Evaluating the Changes

Now let’s consider the changes made to each team’s top 10. 

First the Lakers:

The Lakers lose…

Trevor Ariza: 1,998 min., 8.0 Wins Produced, 0.192 WP48

Vladimir Radmanovic: 771 min., 1.5 Wins Produced, 0.094 WP48

Total Loss: 2,769 min., 9.5 Wins Produced, 0.162 WP48

The Lakers add to their top 10…

Ron Artest: 2,452 min., 4.6 Wins Produced, 0.089 WP48

Josh Powell: 703 min., -0.6 Wins Produced, -0.040 WP48 or

D.J. Mbenga: 181 min., -0.2 Wins Produced, -0.066 WP48

Total Gain: 3,155 min., 4.0 Wins Produced, 0.060 WP48 (with Artest and Powell)

Overall Direction: The Lakers appear to be worse.  Artest is simply not as productive as Ariza.  And whether Powell or Mbenga takes the 10th slot, the team is really not helped.

Now the Blazers:

The Blazers lose:

Sergio Rodriguez: 1,225 min., 2.2 Wins Produced, 0.087 WP48

Channing Frye: 746 min., -2.3 Wins Produced, -0.146 WP48

Total Loss: 1,971 min., -0.1 Wins Produced, -0.001 WP48

The Blazers gain:

Andre Miller: 2,976 min., 11.1 Wins Produced, 0.178 WP48

Jerryd Bayless: 655 min., -1.4 Wins Produced, -0.104 WP48

Total Gain: 3,631 min., 9.6 Wins Produced, 0.127 WP48

Overall Direction: The Blazers appear to be better. Miller is clearly an upgrade over Sergio Rodriguez at point guard.  It also helps that Channing Frye went away.

Once again…when we compare each team’s efficiency differential (and Wins Produced), it appeared the Lakers were only about six wins better than the Blazers in 2008-09.  With the moves each team has made, this gap seems to have vanished.  In sum, if all we look at is what the veteran players on each team did last year, the Blazers are at least as good as the Lakers.

On the other hand…

Of course, all good economists have “the other hand” to look at.

It’s important to note that the Lakers did not have services of Andrew Bynum for much of the 2008-09 season.  If Bynum is healthy, he could substantially improve the Lakers. 

On the other hand… the same story could be told about Greg Oden. 

Then again, on the other hand… Phil Jackson does appear to be one of those coaches who can change a player’s productivity. Maybe he can make Ron Artest better.

Then again, on the other hand…. Artest will be 30 years of age in November, so his production is probably going to slip. 

Then again, on the other hand… Andre Miller is already 33 years of age. So how many more years can he be productive? 

Then again, on the other hand… we are completely ignoring the changes made by the Mavericks, Spurs, and Nuggets. These teams, like the Blazers, might also be better.

Wow, that’s quite a few hands.  Let me try and summarize.  Contrary to what Berger argued, I think the moves the Lakers and Blazers have made have actually closed the gap between the two teams.  The Lakers were clearly the best team in the West last year.  It doesn’t appear to me, though, that the Lakers are clearly the best in 2009-10.  So although we can’t guarantee the Blazers will make it to the NBA Finals in 2010 (remember what we found on the other hands), I think Portland fans shouldn’t think their team ranked among the losers this summer.  As for fans of the Lakers… well, Phil Jackson really is a good coach so maybe it will still work out.

- DJ

The WoW Journal Comments Policy

Our research on the NBA was summarized HERE.

The Technical Notes at wagesofwins.com provides substantially more information on the published research behind Wins Produced and Win Score

Wins Produced, Win Score, and PAWSmin are also discussed in the following posts:

Simple Models of Player Performance

Wins Produced vs. Win Score

What Wins Produced Says and What It Does Not Say

Introducing PAWSmin — and a Defense of Box Score Statistics

Finally, A Guide to Evaluating Models contains useful hints on how to interpret and evaluate statistical models.

The Underpaid and Overpaid in 2008-09

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Steve Walters’ brilliant discussion of general managers in baseball provides a nice jumping off point for the annual review of “overpaid” and “underpaid” NBA players.   Such a review begins with observations that are quite similar to what was said last summer.

According to the USA Today, the NBA spent $2.2 billion on player salaries in 2008-09.  With 445 players taking the court, the average salary in the Association was $4.85 million.

Although this is a large sum of money, one suspects it could be even higher.  The NBA has instituted a variety of salary restrictions.  There is the famous salary cap, which limits how much each team can spend on its payroll.  There is also a maximum salary, which is a cap on individual player salaries (and yes, this should be called a salary cap).  Finally there is a cap on rookie pay, which limits how much a first round draft choice can earn on his first contract. All of these restrictions are designed to limit a player’s pay.  And whenever we observe an employer trying to limit an employee’s pay, we suspect that those employees might be exploited.

What does it mean to be exploited?  In 1933, Joan Robinson argued a worker is exploited if he or she is paid a wage less than the revenue being generated.  Given this definitions, if a worker is paid $10 an hour, but only generates $8 of value, then that worker is not exploited.  But if a worker is paid $10 million, but generates $12 million in value, then by definition he or she is exploited.

Given this definition, which players in the NBA are the most exploited? And on the flip side, which players are exploiting the NBA? 

To answer these questions I am going to follow the same methodology I have employed the past two years.  Here is the description of this methodology:

The standard approach is to simply regress team revenue on wins (and other stuff). But I think there’s a problem with this approach for the NBA (a problem I wish to avoid getting in to for a blog entry), so I am going to estimate the value of a win differently.  We know from our research on revenue and attendance [mentioned in The Wages of Wins, which is soon to be published as a paperback :) ] that players primarily generate value in the NBA via their ability to generate wins.  And we also know that a player’s wage is only for the regular season.  Consequently, we could say that the value of one win in the NBA is simply the amount of money the league paid its players divided by how many wins these players produced in the regular season. 

Such an approach makes three assumptions.  I am assuming that all players in the NBA are collectively paid what they are worth (which may be true if the union bargained effectively), players are only paid to produce wins (which is a reasonable assumption given the research cited above), and the value of a win is the same for all teams (okay, not true, but two out of three ain’t too bad).

I have noted in the past that I am not thrilled with this approach.  In fact, last year I stated: “After thinking about it a bit more, I think I can do better.  But I don’t feel like working through my idea for a blog post.”  When I read those sentences this year I wondered why I never bothered to write this “better idea” down someplace.  I am sure it will come back to me someday.  In the meantime, though, we are left with the same old methodology.

We have a measure of how many wins each player created (i.e. Wins Produced).  And if teams spent $2.2 billion on players, and these players produced 1,230 regular season wins, we can argue that each win is worth $1.755 million.   With a value of win in hand, all we need to do is to multiply the value of a win by each player’s Wins Produced.   This calculation gives us a measure of what a team could have paid for a player’s productivity; a measure which can be easily compared to a player’s salary.  Once again, players who produced more than they were paid are, by definition, exploited or underpaid.

So who were the most exploited in 2008-09?  The answer is in Table One.

Table One: The Underpaid in 2008-09

Topping the list of underpaid players is Chris Paul [who also led this list in 2007-08].  According to the USA Today, Paul was paid $4.6 million in 2008-09.  For this money, the New Orleans Hornets received 28.2 wins.  At $1.7 million per win, the Hornets should have paid $49.5 million to Paul; so Paul was underpaid by nearly $45 million (at least, that’s the answer if we accept this particular methodology).  HoopsHype says that Paul is scheduled to make $13.5 million in 2009-10. If this was Paul’s salary in 2008-09 he would have only been underpaid by about $36 million. Such a mark would still lead the list of underpaid players, but the gap between Paul and LeBron James — the number two player on the list — would be much smaller.

When we look over the list of underpaid we see the work of two institutions in the NBA; the rookie salary scale and the limit on how much can be paid to any individual player.  The limit on rookie pay allows teams to dramatically underpay players like Paul, Rajon Rondo, Brandon Roy, David Lee, Kevin Durant, and Al Horford. LeBron, Dwight Howard, and Dwyane Wade are each paid quite a bit, but nowhere near what these players would command if each win cost their employer $1.7 million. And then there are players like Dominic McGuire and Jamario Moon.  These players are underpaid because what they do is underappreciated (or underrated).  If a general manager employs one of the players listed in Table One he is either smart or lucky.

In contrast, if a general manager employs a player listed in Table Two he is not so lucky.

Table Two: The Overpaid in 2008-09

Topping the list is Jermaine O’Neal, who is a repeat winner of the Most Overpaid Player (MOP).  To be fair, this year I set the cut-off at 2,000 minutes played.  O’Neal didn’t play this many minutes in 2007-08, so he would not have been the MOP last year by the 2008-09 standard (that award would have gone to Boris Diaw).  Nevertheless, O’Neal didn’t contribute much in 2007-08.  Despite his high salary and lack of production, both the Toronto Raptors and Miami Heat thought it was a good idea to trade for his services. 

Once upon a time, Jermaine O’Neal was a productive player.  In 2002-03 he posted a 0.194WP48 [Wins Produced per 48 minutes], a mark that is nearly double what we see from an average player.  As recently as 2006-07, he was still above average. Across the last two years, though, O’Neal has struggled; and before the next season he will turn 31.  So it seems likely that the days of a productive O’Neal are over.  His days of getting paid like a star, though, are not.  HoopsHype indicates that O’Neal will get paid nearly $23 million in 2009-10.  This means it’s possible O’Neal will repeat his MOP title in 2009-10.

In fact, this is likely.  HoopsHype reports that Jermaine O’Neal will rank third in the NBA in salary in 2009-10.   Allen Iverson – who was the runner-up for MOP this past year – will take a substantial pay cut if he joins another NBA team.   Al Harrington may be able to repeat his third place MOP ranking, but it’s unlikely that his productivity will fall enough for him to catch O’Neal.  No, if O’Neal manages to log 2,000 minutes again in 2009-10, it looks like this title stays with him.

Beyond 2010, though, a new name will emerge.  O’Neal will probably take a pay cut after this season.  This means a player like Andrea Bargnani, Al Thornton, or Spencer Hawes could rise up and take a future MOP title.  Once again, though, that probably won’t happen until 2011. 

Let me close by noting that this is the end of the underrated, overrated, underpaid, and overpaid columns for this year.  So look for something different in the next column.  Not sure what that topic will be, although I am sure it will have to be something different.

- DJ

The WoW Journal Comments Policy

Our research on the NBA was summarized HERE.

The Technical Notes at wagesofwins.com provides substantially more information on the published research behind Wins Produced and Win Score

Wins Produced, Win Score, and PAWSmin are also discussed in the following posts:

Simple Models of Player Performance

Wins Produced vs. Win Score

What Wins Produced Says and What It Does Not Say

Introducing PAWSmin — and a Defense of Box Score Statistics

Finally, A Guide to Evaluating Models contains useful hints on how to interpret and evaluate statistical models.

Why Smart GMs Do Stupid Things

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Today’s column is another brilliant offering from Steve Walters, a Professor of Economics at Loyola University Maryland.  Steve grew up in Massachusetts – otherwise known as the “Cradle of GMs” – and is thus a member of Red Sox, Celtics, Patriots, and Bruins Nation. He has published academic research on sports and economics, worked as a consultant in baseball, and has written for The Sporting News.

 

Frank Costanza:  “What the hell did you trade Jay Buhner for?! He had 30 home runs and over 100 RBIs last year. He’s got a rocket for an arm. You don’t know what the hell you’re doin’!”

George Steinbrenner:  “Well, Buhner was a good prospect, no question about it. But my baseball people loved Ken Phelps’ bat. They kept saying ‘Ken Phelps, Ken Phelps.’”

– Seinfeld, “The Caddy” (season 7, 1996)

OK, we all “go Costanza” from time to time.  It’s part of the joy of being a fan to second guess team management (usually at high volume) and fantasize about what we’d do if we sat in the General Manager’s chair.

In our heart of hearts, though, we know this is foolishness.  The pool of talent attracted to the sports business is incredibly rich and deep.  Clawing your way to the top of any team’s organizational chart must be an epic struggle involving long days, endless study, and relentless pressure for results.  It’s reasonable to assume that those who survive this brutal competition are the best and brightest, their big brains crammed with relevant knowledge and experience and their motivation levels off the charts.  If there’s an efficient market for executive talent anywhere, it must be in sports.

Except… there sure seems to be a lot of evidence that some of the industry’s highest-paid execs, well, “don’t know what the hell they’re doin’.”

Now, understand, I do not mean that GMs aren’t smart, knowledgeable, and motivated.  I’ve never met a GM who wasn’t supremely talented (and as a consultant I’ve worked for a couple, and as a feature writer for The Sporting News a few years ago I’ve gotten to chat with many more in clubhouses and press boxes).  I am emphatically not suggesting that the average fan – and certainly not Frank Costanza – could improve upon the average GM’s performance.

What I do mean is that there are some flaws in the market for sports management talent – and especially in the GM market.  As a result, some who are elevated to top jobs aren’t ready for prime time.  Often, the “tools” that get someone the job are useless for executing it; other skills, undeveloped in the rise up the ladder, become far more important on the top rung.  Some have ‘em, some don’t.

Let me offer three observations about how this market works (or doesn’t), with some sketchy economic analysis of why and a few relevant illustrations.

1.  It’s not what you know, but who you know.

This is an exaggeration, of course.  No one who has risen to a position of any responsibility in the sports business lacks experience and knowledge.  But with a vast pool of such competitors seeking advancement, the decision about exactly who to advance will often hinge on (a) a mentoring relationship with someone well-connected in the business, or (b) membership in a successful organization.

It grieves me to say that.  As an economist, I generally tout the “meritocratic” nature of the market system.  Profit-seeking owners have an incentive to use the best info available to hire people who are most qualified (and, so, maximize the chances that they’ll achieve their objectives, whether championships or high profits).  Giving preferences to those who are “wired in” runs counter to that goal.

In the real world, however, owners face an information problem:  lots of job candidates, on paper and in interviews, will appear promising – but their real value going forward is uncertain.  At the least, a strong recommendation from a “trusted source” can be a tie-breaker.  Alternatively, coming from a team with a winning record – even if the applicant’s contribution to that record is uncertain or un-measurable – can tip the scales.

The best recent example of a well-connected incompetent might be Bill Bavasi, one of two sons of the late Buzzie Bavasi (who GM’d three teams from the ‘50s to the ‘80s) to enjoy long careers in baseball thanks to “the network.”  Indeed, Buzzie himself got into the business thanks to connections:  his college room-mate just happened to be the son of baseball’s commissioner at the time.  Daddy gave Bill his first job with the Angels; in 1994, he was in the right place at the right time and became GM when the mercurial Whitey Herzog exited.  After three last-place finishes in six years, Bill was fired, but in 2003 he resurfaced as GM of the Mariners – he’s got the good blood lines, after all – and presided over four more last-place finishes in five years.  He’s now an assistant to Cincinnati’s GM; look out, Reds fans.

It’s also possible to ride a “hot hand” or a winning rep into a top job.  J.P. Ricciardi, for example, was a lieutenant to Oakland’s Billy Beane when hired to revive the under-achieving Toronto Blue Jays after the 2001 season.  Beane’s Athletics had just won 102 games on a shoe-string budget; his brilliance would soon be chronicled in Michael Lewis’s MoneyBall.  Surely Ricciardi was a rising star – except that his Jays have continued to under-achieve.  In part, this has been because…

2.  The Peter Principle is alive and well in pro sports.

Dr. Laurence Peter’s somewhat tongue-in-cheek argument that “in a hierarchy every employee tends to rise to the level of his incompetence” (or, alternatively, something that works will be used in more challenging applications until it fails) applies with great force in the GM market.

Obviously, GMs must evaluate talent, so most have played the game, scouted it for many years, or both.  Players and scouts can judge the horseflesh; they can distinguish a curve ball with big-league potential from one without it, or eyeball an infielder’s hands and footwork and judge whether he’ll hold his own on a major league field.

The problem is that once you’re a GM, you not only have to judge talent, but value it economically – i.e., “put a dollar on the muscle.”  This is the domain of subtle trade-offs.  Here, it won’t be enough just to say “X has better bat-speed than Y” or “Z needs to come up with an out pitch.”  Putting together a roster that will contend is to scouting as college calculus is to third-grade arithmetic.

One of the most famous trades in baseball history exchanged a power-hitting right-fielder (Rocky Colavito) for a high-average shortstop (Harvey Kuenn).  It was endlessly controversial because it involved trade-offs that those unguided by quantitative analysis were completely unprepared to judge:  What’s the defensive value of a corner outfielder vs. a middle infielder?  How do some homers compare to many more singles and doubles?  Making deals without knowing the answers to these and other key relative-value questions is like playing Russian roulette with your team’s destiny.

And in the modern, free-agent era, you have the complication of money:  Most GMs are (unwisely) given a fixed payroll budget and told to figure out how to get as many wins as possible from it.  The number of trade-offs they have to evaluate thus grows exponentially.  Plus, their expenditures will, in part, result from their own negotiating skill – or lack of it.  There’s nothing about playing the game or scouting that makes one a savvy negotiator.  I recently heard (from a trusted source) that when a certain pitcher was on the market a few years ago his best offer was a three-year, $18 million contract – until a GM desperate to shore up his rotation offered four years, $42 million.  Sold!  And many millions squandered that could have been used to sign other useful talent.

Ricciardi’s track record as a scout and junior exec may have been stellar, but as a GM he’s been mediocre at best – especially on the economic front.  A supportive owner allowed him to run the Jays’ payroll up from $51 million in 2003 to almost $100 million last year (though with a weak looney and a recession this year, it’s back down to $80 million); the result has been one second-place finish, four thirds, two fourths (counting this year), and a last.  Per Forbes magazine’s estimates, the Jays have shown red ink in three of Ricciardi’s seven years at the helm – which is actually pretty hard to do, given MLB’s generous revenue-sharing system and, for a few years, large subsidies for “currency equalization.”

It’s worth noting that Ricciardi has squandered millions of his owners’ money in two ways.  Sure, he’s wasted truckloads on some thoroughly mediocre players (and I leave it to Jays fans to supply the full list), but he’s also failed to deal players when their value in Toronto has fallen far below that elsewhere.

In other words, Ricciardi – and he’s far from alone here – is ignorant of two basic facts of economic life in baseball.  As my colleague John Burger and I showed in a 2003 article in the Journal of Sports Economics, players are worth much more (in terms of the revenue they will generate for their teams) in large markets than they are in small ones, and more to contenders than to also-rans.

This year, the Jays rode a few surprising performances to contention in the early going, but eventually settled back to their customary second-division status.  As a result, the expected revenue contributions of all their players went down sharply, and this should have made Ricciardi an eager dealer at baseball’s just-concluded trading deadline.  His roster was stocked with veterans getting big-market, contender-status salaries who will recoup a fraction of their costs as the Jays chug to the finish line.  The best strategy in such circumstances (well and frequently executed by Billy Beane) is to move this high-priced talent to markets where it is most highly valued in exchange for prospects who are cheaper (and so generate no red ink) and give the team a chance to contend in future.

But while Ricciardi loudly offered his white elephants for bids – especially his top pitcher, Roy Halladay – he could off-load only one of them, oft-injured third baseman Scott Rolen.  Fans generally applauded this inability to close deals, in the evident belief that any money thus squandered would come out of ownership’s hide, not theirs.  True enough – but the millions wasted in this way will not be available to sign or develop talent that may make fans much happier in the long run.  And, so far at least, Ricciardi’s lack of judgment and/or negotiating skill does not appear to be endangering his job – which reflects the fact that in baseball, at least…

3.  Nice guys finish last, but get their contracts renewed.

Baseball (like all major sports) is a monopoly.  This helps insulate it from the consequences of big mistakes – but also breeds a certain “clubbishness” and, even, a tolerance for bias.

Historically, of course, the best evidence of the latter is the fact that sports were racially segregated for so long.  In a more competitive environment, perhaps owners would have broken the “gentleman’s agreement” (and how’s that for an ironic name?) that kept talented (and cheap!) African-American players out of organized baseball from 1888 ‘til 1946.  But even today, owners seem indifferent to the possibility that women – who now hold exactly zero of the GM positions in major sports – just might “have the essentials” to judge talent, evaluate trade-offs, negotiate deals, and build profitable winners.

In a club, the members often value congeniality.  Life is easier for everybody if the other members are “nice” – i.e., have few rough edges or annoying personality traits, no matter what else they bring to the table.  In baseball, you can establish your congeniality in many ways:  e.g., compliance with an interventionist owner, glibness with the press and public, or slickness in handling underlings.

Such traits might actually help a GM succeed, of course.  What is unclear is how they stack up next to other “tools” — analytic insight, negotiating savvy, willingness to take risks – and why they seem to be central elements in some teams’ employment decisions.

Consider the case of Paul DePodesta, another of Billy Beane’s lieutenants who won the Dodgers’ GM job in the Spring of 2004.  DePodesta had not only earned a Harvard economics degree (which means he knows something about evaluating trade-offs) but also served an apprenticeship with a winning organization; he was a key figure in MoneyBall.  But even as his Dodgers marched to the playoffs in ’04, he was (shudder) unpopular:  old-school Dodgers execs resented this egghead in their midst, and he failed to cultivate the LA press.  In short, he wasn’t a suitable member of the club, and absent a sympathetic support system, a disappointing ’05 season got him canned.

In my experience, a GM’s failure to stroke a club’s bureaucracy or the media (some of whom are not above swapping favorable mention in print or on air for access to news) can be fatal to a career, despite his team’s record or its bottom-line.  Being well-liked by all and sundry, on the other hand, can lead to multiple opportunities to screw up a franchise.  Again, part of this goes back to observation #1 and the info problem faced by owners:  If it’s hard to judge someone’s underlying ability as an exec, it seems rational to factor in how well-liked he is by those he’s worked with.  In MoneyBall parlance, though, this is like drafting a prospect who “looks good in jeans” but might not be able to actually play the game.

In sum, despite the competitiveness of this labor market, there’s ample reason to believe that Frank Costanza had a point.  So if the front office of your favorite team seems dysfunctional and inefficient, maybe that’s because it is.

- Steve Walters

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