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Date: Wednesday, 17 Nov 2010 01:49

So, the Braves didn’t wait long to get the power bat they were looking for, acquiring Marlins slugger Dan Uggla for Omar Infante and Mike Dunn. So, how does the deal break out?

I estimate Uggla’s play to be worth $11 million in 2011, while collecting a salary of $9-$10 million in his final year of arbitration. I estimate Infante to be worth $5.5 million with his salary contractually set at $2.5 million. Dunn is expected to be worth $800,000 with an estimated salary of just over the league minimum of $400,000. The values reveal that the Braves become a better team, but they will be paying for it. Infante will be in the last year of his contract, while Dunn still has five years of service time left.

The Marlins move was preceded by Uggla turning down a four-year, $48 million contract that I thought was a fair offer. The Braves may think that they can use the next year to hammer out a reasonable extension, like they did with Tim Hudson after acquiring him from the A’s, but Uggla does not seem to be willing to take a discount—he’s reportedly asking for five years and $71 million, too steep. Maybe, now that Uggla is reunited with manager Fredi Gonzalez he might be more amenable to a deal, but that’s wishful thinking.

The Marlins get some good value out of a player whom they were going to lose after this season anyway. Infante will immediately fill Uggla’s hole in the lineup, and while I don’t expect him to repeat his 2010, he’ll do a fine job on a reasonable contract. Dunn’s performance projection has wide variance; he could become a regular reliever or never make a big-league roster again. He’s a junk bond that the Marlins are willing to gamble on. When the Marlins open their new stadium in 2012, they’ll have salary room to add a player or two and be on the fringe of contention as they seem to be every year.

Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Monday, 15 Nov 2010 15:35

Frequently, I receive a comment or e-mail that brings up the dollar-value estimates at Fangraphs.com. Fangraphs is a fine site with lots of interesting numbers, but I don’t think the dollar-value estimates listed on the site (or any simple wins-to-dollars conversion) properly value players. Here’s why.

1) The derived estimates are based on the assumption that there is a constant linear relationship between wins and dollars. This assumption is incorrect: there are clear increasing returns to winning. This is the revenue function I estimated for my book, converted to wins instead of runs.
Returns to Winning

2) By dividing the total value of free-agent contracts (Y) by total “wins” added by the signed free agents (X), this method assumes the y-intercept (b) is 0, which biases the estimates. Y = mX + b, when you assume b is zero when it’s not, bad things happen to slope m. The graph below from the popular econometrics textbook Understanding Econometrics: A Practical Guide by A.H. Studenmund demonstrates why this assumption biases the estimates.

Suppressing Y-Intercept

Due to the thinness of the free-agent market and the potential for market mistakes, I prefer a fundamental-value approach to valuing players as opposed to a market-valuation approach. However, if I want to use the free-agent market to value talent, I prefer Anthony Krautmann’s “free-market returns” approach, which can be implemented in ways to avoid the problems mentioned above.

In Chapter 4 of my book, I explain why I prefer the Gerald Scully inspired approach to the free market returns approach. This is not to say that market prices are not useful for valuing free agents. In my book explain where free market returns helped me shape my estimates. Also, here is a working paper in which I discuss the pros and cons of the Scully and Krautmann methods.

Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Thursday, 11 Nov 2010 20:41

Not very, according to my new paper.

HIRED TO BE FIRED: THE PUBLICITY VALUE OF MANAGERS

Abstract
Sports teams frequently fire and hire managers when they experience losing. However, determining managerial responsibility for player performance is difficult to measure. This study examines how major-league baseball players perform under different managers and estimates that managers have little effect on performance. The study further investigates whether or not replacing managers serves as a signal to fans that the team is improving, which boosts attendance. The results indicate that new managers were associated with increased attendance in the 2000s; however, such effects were not present in the 1980s and 1990s.

Here’s an old blog post on some preliminary results from the study. I really wished that I had written a chapter in Hot Stove Economics on this topic, but I just didn’t have the time. I will be presenting this paper at the Southern Economic Association annual meeting later this month.

So, don’t fret Mets fans. I’m not sure it matters all that much whom the front office hires as manager. But a popular hire could at least give a boost to the fan base.

Author: "JC" Tags: "Managing"
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Date: Thursday, 11 Nov 2010 12:12

Here are the most valuable position players in the leagues, according to my estimates. Pitchers here.

AL
Rank	Player		Team	$-Value (MRP)
1	Jose  Bautista	TOR	$21.11
2	Josh  Hamilton	TEX	$19.43
3	Miguel  Cabrera	DET	$18.65
4	Shin-Soo  Choo	CLE	$18.00
5	Evan  Longoria	TBR	$17.67
6	Robinson  Cano	NYY	$17.03
7	Adrian  Beltre	BOS	$16.01
8	Daric  Barton	OAK	$15.28
9	Carl  Crawford	TBR	$15.11
10	Ichiro  Suzuki	SEA	$13.48
11	Austin  Jackson	DET	$12.48
12	Joe  Mauer	MIN	$12.38
13	Nick  Swisher	NYY	$12.35
14	Nelson  Cruz	TEX	$12.04
15	Vernon  Wells	TOR	$11.98
16	Justin  Morneau	MIN	$11.93
17	Nick  Markakis	BAL	$11.93
18	Billy  Butler	KCR	$11.93
19	Paul  Konerko	CHW	$11.91
20	Torii  Hunter	LAA	$11.83
NL
Rank	Player		Team	$-Value (MRP)
1	Albert  Pujols	STL	$21.61
2	Joey  Votto	CIN	$20.17
3	Matt  Holliday	STL	$18.04
4	Ryan  Zimmerman	WSN	$17.99
5	Adrian  GonzalezSDP	$16.64
6	Jayson  Werth	PHI	$16.13
7	Aubrey  Huff	SFG	$15.95
8	Troy  TulowitzkiCOL	$14.83
9	Carlos  GonzalezCOL	$14.02
10	Jason  Heyward	ATL	$13.97
11	Ryan  Braun	MIL	$13.81
12	Jay  Bruce	CIN	$13.15
13	Kelly  Johnson	ARI	$13.05
14	Chase  Headley	SDP	$12.19
15	Rickie  Weeks	MIL	$12.14
16	Prince  Fielder	MIL	$11.94
17	Hunter  Pence	HOU	$11.80
18	Chris  Young	ARI	$11.76
19	Chase  Utley	PHI	$11.71
20	Angel  Pagan	NYM	$11.70
Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Thursday, 11 Nov 2010 12:11

Here are the most valuable position players in the leagues, according to my estimates. Position players here.

AL
Rank	Player			Team	$-Value (MRP)
1	Cliff  Lee		SEA/TEX	$18.94
2	Felix  Hernandez	SEA	$17.13
3	Justin  Verlander	DET	$15.71
4	Francisco  Liriano	MIN	$14.79
5	Jered  Weaver		LAA	$13.73
6	CC  Sabathia		NYY	$13.57
7	Zack  Greinke		KCR	$13.17
8	Jon  Lester		BOS	$13.06
9	John  Lackey		BOS	$10.94
10	John  Danks		CHW	$10.80
11	Colby  Lewis		TEX	$10.56
12	Carl  Pavano		MIN	$10.43
13	Ricky  Romero		TOR	$10.29
14	Mark  Buehrle		CHW	$10.26
15	Gavin  Floyd		CHW	$10.23
16	Joba  Chamberlain	NYY	$10.18
17	David  Price		TBR	$10.14
18	Joakim  Soria		KCR	$10.03
19	Matt  Thornton		CHW	$10.00
20	C.J.  Wilson		TEX	$9.88
NL
Rank	Player			Team	$-Value (MRP)
1	Roy  Halladay		PHI	$20.77
2	Adam  Wainwright	STL	$16.51
3	Ubaldo  Jimenez		COL	$15.84
4	Josh  Johnson		FLA	$15.67
5	Matt  Belisle		COL	$15.40
6	Carlos  Marmol		CHC	$13.87
7	Tim  Lincecum		SFG	$13.05
8	Brian  Wilson		SFG	$12.65
9	Jonny  Venters		ATL	$12.62
10	Sean  Marshall		CHC	$12.52
11	Chris  Carpenter	STL	$11.91
12	Billy  Wagner		ATL	$11.60
13	Tommy  Hanson		ATL	$11.46
14	Heath  Bell		SDP	$11.42
15	Chad  Billingsley	LAD	$11.29
16	Clayton  Kershaw	LAD	$11.26
17	Anibal  Sanchez		FLA	$11.19
18	Brett  Myers		HOU	$11.12
19	Matt  Cain		SFG	$11.09
20	Hiroki  Kuroda		LAD	$10.75
Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Tuesday, 09 Nov 2010 16:46

Here is a list of some top free agents, and what I project them to be worth in 2011.

– These values are projected based on recent past performance.
– The estimates account for aging and league revenue growth.
– These values are just for 2011. Over a longer term, value will diminish with age, but increase with revenue growth. Revenue growth is stronger than aging decline; therefore, even as players age their value tends to increase. If a player signs a five-year contract, he will typically get more than five-times the value projected in 2011.
– Values assume the player signs with an average team. Players who sign with winning teams are worth considerably more than their value to an average team. Example: Clill Lee is worth nearly $10 million/year more to a top team than an average team.

First	Last		Last Team	2011 Value (in millions)
Adrian	Beltre		BOS		$12.6
Lance	Berkman		NYY		$9.8
Pat	Burrell		SFG		$7.0
David	Bush		MIL		$4.5
Carl	Crawford	TBR		$15.0
Johnny	Damon		DET		$9.5
Jorge	de la Rosa	COL		$6.5
Adam	Dunn		WAS		$10.5
Jon	Garland		SDP		$8.5
Vlad	Guerrero	TEX		$7.5
Orlando	Hudson		MIN		$10.0
Aubrey	Huff		SFG		$11.0
Derek	Jeter		NYY		$9.0
Paul	Konerko		CHW		$9.5
Hiroko	Kuroda		LAD		$8.0
Cliff	Lee		TEX		$18.5
Victor	Martinez	BOS		$10.0
Kevin  	Millwood	BAL		$6.5
Carl	Pavano		MIN		$9.5
Carlos	Pena		TBR		$10.0
Andy	Pettitte	NYY		$6.0
Scott	Podsednik	LAD		$4.0
J.J.	Putz		CHW		$5.0
Chad	Qualls		TBR		$5.0
Manny	Ramirez		CHW		$7.0
Jon	Rauch		MIN		$6.0
Edgar	Renteria	SFG		$5.0
Mariano	Rivera		NYY		$9.5
Rafael	Soriano		TBR		$8.6
Jim	Thome		MIN		$9.5
Juan	Uribe		SFG		$7.0
Jayson	Werth		PHI		$14.0
Jake	Westbrook	STL		$7.0
Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Monday, 08 Nov 2010 12:37

That’s the question Ken Rosenthal tries to answer. The Florida Marlins supposedly offered Dan Uggla a four-year, $48 million extension that he turned down. Like the team, I am a bit surprised that Uggla didn’t accept. I estimate Uggla to be worth approximately $51 million over the next four years ($12.75 million per year). That’s in the same ballpark as the Marlins’ offer, plus Uggla still has another year of arbitration, when he will likely get a little less than his market value.

Rosenthal suggests the following answers.

Uggla, the only second baseman in history with four 30-homer seasons, has slightly lower rate stats than outfielder Jayson Werth over the past three years, but more home runs, extra-base hits and RBI. Werth, a free agent, almost certainly will command more than four years, $48 million.

I have Werth valued at $4–5 million more per year than Uggla. If this is what Uggla is waiting for, he probably shouldn’t hold his breath.

A four-year deal for Uggla would amount to a three-year extension on top of his final year of arbitration, making him a free agent at 34. Uggla likely would seek at least a five-year contract as a free agent after next season, delaying his next deal to 36.

That’s true, but the future market will account for his depreciated value as he ages. Also, he risks having an awful season in 2011 that could raise uncertainty about his future performance. That’s an awfully big gamble to take for a few more million dollars. This contract would be more than triple his current lifetime earning as a baseball player.

While the Yankees, Red Sox and Phillies are among the high-revenue teams that wouldn’t pursue a second baseman in the 2011-12 market, Uggla also could play third base and outfield, increasing his options.

While I don’t think a position switch is necessarily in his future, he would be worth more to a winning club. It may be that he’s willing to hold out for free agency in the hope of grabbing on with a perennial winner that will value him more than a merely-decent club like the Marlins. Or maybe, he wants assurances that if he signs, he won’t be traded to somewhere else in an attempt by the Marlins to capture some of his added value to winning clubs.

Who knows what really is going in in these negotiations, but I think the Marlins have a pretty good offer on the table.

Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Sunday, 07 Nov 2010 13:45

Free agents have now hit the open market. Welcome to the hot stove league!

A year ago, I posted a list of “hot stove myths.” I have since expanded on why these commonly-stated beliefs are mistaken in my new book Hot Stove Economics. As the hot stove season kicks off—and because it seemed to really piss a few people off the last time—I thought I’d repost with a few updates and links to further explanations.

GMs can buy low and sell high — So, let me get this straight: you think you know when a player is playing above or below his true ability—usually due to a small sample or by using a SGT-approved metric instead of a mainstream statistic—but guys who make a living in baseball completely miss it. For this to work, the GM on the other team has to be a colossal moron. GMs have made mistakes in the past and will make mistakes again, but they’re not dumb enough to act on a meaningless hot/cold streak. You can’t sell high or buy low and profit financially because all GMs understand these things. You don’t have to wait for a guy to get hot to sell him, nor dump him before he gets cold. In addition, the key knowledge of when the peak or trough is doesn’t exist, except in the mind of message board posters. Fluctuations in performance create uncertainty, which affect the price that GMs are willing to pay. (See Chapter 6.)

The number of free agents at a position affects the price of free agents at a position — It seems logical that more free agents at a position will mean more options for teams—even union leader Marvin Miller believed this to be the case. Players act as substitutes and thus a team can pit the players against one another to keep salaries down. The problem with this idea is that the free agents have come from somewhere. A high number of players looking for new teams means that there is a corresponding number of openings that teams need to fill. For example, if there are four good shortstops on the market this means that there are also four openings on teams. The increased supply of players is counteracted by the increased demand by teams needing replacements. (In Chapter 5, I look at the free-agent markets leading up to the 2007, 2008, and 2009 seasons to examine how the size of the pool affected salaries of free agents. It turned out that the impact of the size of the talent pool was not statistically significant.)

Every trade has a winner and a loser — Swapping resources only takes place if both parties are made better off. Therefore, when we observe trades taking place, it’s likely that both parties are doing so because they expect to improve their teams (see the weak axiom of revealed preference, or as I call it: “the useful WARP“). Mistakes happen, but as a general rule, all parties to trades are winners. Who says economists aren’t touchy-feely? (See Chapter 1.).

Players peak at 27 and old players are worthlessMy estimates indicate that players peak at 29–30. And just because a guy is past his peak doesn’t mean he’s not valuable. The aging process is gradual, more like the Minneapolis Metrodome than an Egyptian pyramid. If a guy was good last year, even if he’s in his mid-30s, he’ll probably be good next year. Now, the older he gets the more dangerous long-run contracts get, but one- and two-year deals are fine. (See Chapter 3 for a discussion of the flaws in the studies that produced this myth and an explanation my study.)

Other myths in Hot Stove Economics:
Some Players are Clutch — Sorry, folks. Clutch performance is not an identifiable skill that should be valued.
Replacement Players are Cheap and Abundant — Why do you think that a third of the league is composed of “below replacement” players?
Player Salaries Raise Prices at the Gate — The causation is backwards. Sports are normal goods. Prices have risen with consumer demand in a wealthy economy, which has made players more valuable.
College Players are Better Draft Bets than High School Players — The college talent pool may be more certain, but it’s also shallower than the high school ranks.

Author: "JC" Tags: "Hot Stove Economics"
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Date: Tuesday, 02 Nov 2010 15:30

Congrats to the San Francisco Giants on winning the 2010 World Series. While the winner normally gets a few days to bask in the after-glow of its victory, fans of the loser quickly look to next year, when the runner-up can make tweaks to push the team over the top. The Texas Rangers have a few offseason issues, but right now I want to focus on their aging designated hitter/ outfielder.

There is no sugar-coating it. Vlad Guerrero had an awful World Series (.071 AVG, .125 OBP, .071 SLG), and the rest of his post-season wasn’t much better…well, actually it was, but a .615 OPS in the ALDS and ALCS wasn’t up to Guerrero’s expectations. It’s too bad, because Guerrero had a nice regular season, and was a big part of why the Rangers won their division. After a subpar season with the Angels, the Rangers took a chance that Vlad would bounce back and be a productive hitter in their lineup, offering him a one-year $5.5 million contract, with a second year option for $9 million or pay a $1 million buyout.

How did this deal shake out? I estimate his 2010 regular-season was worth approximately $8.75 million to an average team, and to a winning team like the Rangers he was certainly worth more. At most, the Rangers will end up paying him $6.5 million for his 2010 services; so, he was a bargain this season. But the real question comes as to what the Rangers should do with his option. $8.75 is only a little less than $9 million. From these numbers, picking up the option ranges from a neutral to a bad idea, but I need to make a few corrections.

First, Vlad is getting older, and he really can’t play the field much at all (as he demonstrated in the World Series). He’s been almost a full-time DH since 2008. But, as he showed this season, he can still hit. Even if we just looked at his 2010 second-half (and I wouldn’t recommend doing so), he had an OPS+ of 107. Yes, he’s getting older, but even into their late-30s, good players continue to be good players.

Also, what about his playoff performance? How much does that tell us about his future performance? Not much information can be drawn from 62 plate appearances. In 2009, he batted a spectacular .370/.393/.593 over 27 plate appearances in the postseason. Were people willing to believe that he would be playing near his peak in 2010 based on this small sample? I doubt it. Several hundred plate appearances over the course of the regular season provide far more information about a player’s ability than a small sample from the playoffs.

I estimate that based on his last three years of performance, adjusting for aging and league revenue growth, Guerrero projects to be worth $7.5 million in 2011. To pick up their option, the Rangers would have to spend $8 million more than they would have to pay him if they declined (triggering a $1 million buyout). On top of this, the Rangers are a winning team, so his play is likely worth more than the option to the team. However, Guerrero isn’t the Rangers’ only option. If they want to re-sign Cliff Lee, or go after free agents like Jayson Werth or Carl Crawford, they may prefer not to pick up the option.

Guerrero may be declining, but baseball talent is quite scarce and valuable. I won’t be surprised if the Rangers pick up his option; and, if they decline, I expect he will sign a comparable deal with another team.

Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Wednesday, 27 Oct 2010 20:41

Phillies fan Joe Munley sent me the following question:

With the Phils season now over I’m trying to evaluate where we stand for next year. Jayson Werth, the only power, right handed hitter in the lineup is a free agent and has hired Scott Boras as his agent. The word on the street up here is that the Phils won’t be brining him back since he’s 31 and they have Dominick Brown waiting in the wings. Based on your model for valuing players what do think Werth’s true value really is and would it actually make sense for the Phillies to re-sign him?

Jayson Werth is a great example of how unique player careers can be. He was first-round draft pick who struggled upon entering the league and was plagued by a wrist injury. He’s been traded multiple times and was released by the Dodgers after the 2006 season. In Philadelphia, he played his way from an outfield sub, to a platoon player, to an everyday player and All-Star. He just had his best season at age 31, in a walk year.

I’m not sure whether the injury caused Werth to reevaluate his commitment to the game, he got better coaching, or he just finally figured things out; but, whatever he did, he has become a much better ballplayer in Philly. With the Blue Jays and Dodgers, he posted a .245/.333/.420 (AVG/OBP/SLG) line. With the Phillies, he’s batted .282/.380/.506. So, when projecting Werth going forward, I believe his Philadelphia performance is most relevant. Werth is also an above average defender and can steal bases.

If Werth was younger, a six- to eight-year deal might be feasible, but at age 32, I think five years is about as long as any team will be willing to go with him. And just because he’s baseball-old doesn’t mean he’s getting ready to head to the bench. Aging tends to be gradual. I’ve estimated that hitters tend to peak around 29-30. If Werth signed a five-year deal, by my estimates he’d be expected to decline by an average of 1.25% per year over the contract term. This lost value from aging will be counterbalanced some by the expected growth in league revenue. Even though his performance will still be diminishing, that diminished performance will be worth more in the future than it is today.

After combining all these factors, I estimate that Werth’s play would be worth approximately $80 — $85 million ($16 — $17 million per year) over a five-year contract to an average team, and worth even more to a contender. Is this something the Phillies are willing to shell out? I doubt it considering all the chatter seems to indicate that he is gone. But someone is going to give Werth a lot of money, possibly paying him more next year than he has received in his entire career up to now.

Author: "JC" Tags: "General, Hot Stove Economics"
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Date: Monday, 25 Oct 2010 16:58

That’s the question Stephen Dubner asked me for a Freakonomics Quorum. Here’s a tease:

I see the problem here as one of gathering information about what each party desires in order to foster agreement where there are strong incentives to hold out. I’d prefer to adjust the bargaining framework rather than directly attempt to reconcile revenue expectations that are largely invisible to the other side and the public.

You can read the rest of my answer, as well as the answers from Dave Berri and Maury Brown, at Freakonomics. Thanks to Stephen for asking my opinion.

Author: "JC" Tags: "General, Hot Stove Economics, Media"
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Date: Monday, 25 Oct 2010 16:21

Even when the current World Series match-up of Giants versus Rangers was just a possibility, I began to hear chatter to the effect of “Bud Selig and Fox are going to hate having two small-market clubs in the World Series.” But, I don’t think Major League Baseball or its broadcast partner are all that upset.

First, while Dallas and San Francisco may not have the historical cachet as big markets, they are not small markets. According to Nielsen, Dallas and San Francisco are the fifth and sixth largest television markets in the country. I didn’t hear similar complaints when eighth-ranked Boston was in the Series. Sure, Yankees-Dodgers would have a lot more households, but unless you want to radically alter the competitive balance of the league to guarantee these markets a place in the Series, a 5-6 match-up is an above-average pairing of media markets.

Second, I don’t think Selig has a preference for which teams make it to the World Series, except for the Brewers. The broadcast contract the League signed with Fox is already in effect. MLB’s television revenue stream is set. And having two new markets host the championship games gets two large and enthusiastic fanbases out spend more money on tickets and merchandise. What about future World Series? If Yankees-Phillies had drawn more fans, then maybe MLB would get more in its next contract. But, this requires quite a bit of naivety on the broadcasters’ part. When looking at the revenue-generating prospects of a World Series, I doubt that television executives blindly look at the the ratings without putting them in context. The rules of baseball make it likely that many “small-market” clubs will get to and advance into the playoffs. Another year of Phillies-Yankees wasn’t going to do much to fool anybody.

Author: "JC" Tags: "Business"
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Date: Friday, 22 Oct 2010 11:39

Effects of varying recovery periods on muscle enzymes, soreness, and performance in baseball pitchers, by Potteiger, Blessing, and Wilson, Journal of Athletic Training, 1992; 27(1): 27–31.

From the Abstract

Results indicate that muscle damage, as evidenced by CK release, occurs in response to baseball pitching. However CK values, muscle soreness, and pitch velocity are not significantly affected by changes in the amount of recovery time typically scheduled between games.

The authors look at a sample of pitchers and how they recover after pitching different lengths of time. The results show a few things. First, the pattern of recovery indicates most healing occurs soon after pitching, and that further recovery occurs at a diminishing rate. After three days of rest, the measures of skeletal muscle damage were back to baseline values. Second, performance on two days of rest is only slightly worse than, and not statistically distinguishable from, performance on four days of rest. This is good news for the Phillies and Roy Oswalt. The results are also consistent with my analysis (with Sean Forman) of major-league pitchers.

You can get the gist of the results from the graphs in the pages below. The study is short, interesting, and it’s not even new. There a lot of studies in the fields of sports medicine, exercise physiology, and sports science that look at popular sabermetric questions. If you have a sabermetric question, it won’t hurt to do a PubMed search on the topic.


Author: "JC" Tags: "General, Pitching"
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Date: Thursday, 21 Oct 2010 19:11

Brandon Inge and the Detroit Tigers have agreed to an extension that will guarantee the third baseman $11.5 million over the next two seasons. The contract includes a club option for a third year at $6 million, with a $500,000 buyout.

Over the term of his contract, I have him valued between $7-$8 million per season. Good deal for the Tigers, and it provides some security for a veteran nearing the end of his career.

Author: "JC" Tags: "Hot Stove Economics"
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Date: Thursday, 21 Oct 2010 11:32

Two years ago, I reported that Gwinnett County Commissioner Kevin Kenerly owned a parcel of land near the new Gwinnett Stadium, yet he did not make this public nor did he recuse himself from votes relating to the project. Yesterday, Commissioner Kenerly was indicted for allegedly having much more than a minor conflict of interest in several County land purchases (the stadium plot was not part of this investigation).

A Gwinnett County grand jury on Wednesday indicted the county’s longest-serving commissioner, Kevin Kenerly, on charges of bribery and failure to disclose a financial interest in two properties the county rezoned.

If convicted of all counts, Kenerly faces up to 22 years in prison.

The indictment says that Kenerly “directly or indirectly” accepted or agreed to accept 20 payments of $50,000 — totaling $1 million — as bribes for arranging for the county commission to buy a piece of unnamed real estate. The deal benefited developer David Jenkins and settled a lawsuit, although specifics about the purchase were not mentioned in the indictment.

Kenerly also was indicted on two misdemeanor charges for failure to disclose a partnership with D.G. Jenkins Development Corporation, which successfully sought county rezoning on two properties.

“I am going to plead not guilty and I am confident when the jury hears the facts, I will be cleared,” Kenerly told the AJC in a statement after the hearing.

Chairman of the Board of Commissioners Charles Bannister was also questioned by the grand jury. He was not charged, but he abruptly resigned following his testimony.

Author: "JC" Tags: "General"
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Date: Wednesday, 20 Oct 2010 11:31

That’s a question that I commented on in today’s Wall Street Journal.

[Cliff Lee] would be worth $21 million or $22 million a year from an average major-league team, according to J.C. Bradbury, author of the book “The Baseball Economist” and a professor at Kennesaw State University in Georgia.

But over his eight career postseason starts, Mr. Lee is 7-0 with a 1.26 ERA, placing him among the most dominant October pitchers in major-league history.

So a big-market team that enters each season presuming it will reach the playoffs would be willing to dig deeper into its pockets to pay Mr. Lee, said Dr. Bradbury and Dan Rascher, a sports economist at the University of San Francisco.

Major League Baseball’s revenue grow by a rough average of 9% each year. Assuming that players’ salaries rise at the same rate, Dr. Bradbury said, Mr. Lee could command as much as $32 million in annual salary over a five-year contract from an elite franchise.

This estimate is based on Lee’s past performance during the regular season. His post-season performance might make him a little more valuable to an acquiring team due to his added star potential, but the main reason he’s going to get a big paycheck is that for the past three years he’s been good no matter when he’s pitched. The first number is based on his addition to an average club, the latter includes his added value to a winning club like the Yankees. The estimates are derived from the same method that I use in Chapter 7 of Hot Stove Economics to project C.C. Sabathia‘s worth at the time he signed his free-agent deal with the Yankees.

Many people feel that New York is Lee’s most likely destination; however, the Yankees face the hurdle of the luxury tax, excuse me “Competitive Balance” Tax.

If they do, the tax’s rate will be 40%. For every $20 million the Yankees might pay Mr. Lee, then, they’d actually be spending $28 million.

“Let’s say another team wants him and isn’t going to have to pay the luxury tax,” Dr. Bradbury said. “If they offer him a $22 million-a-year deal, they’re really paying less money out of their pocket than the Yankees. The Yankees [might] say, ‘To give you $22 million, we’re going to have to spend $30 million off our budget, so it’s not worth it.’ “

Author: "JC" Tags: "Hot Stove Economics"
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Date: Monday, 18 Oct 2010 18:29

I used to be a fan of the four-man rotation in the post-season, but I have changed my mind. One of the key events that altered my opinion was last year when Joe Girardi successfully rode the three-man playoff rotation of C.C. Sabathia, A.J. Burnett, and Andy Pettitte all the way to a World Series title. At the time, I was skeptical that this was the right move, but I was impressed at how well it worked, which is why I am surprised that the Yankees are going with a four-man rotation in the ALCS.

Sometimes bad decisions turn out just fine, so I wasn’t completely convinced that the Yankees did the right thing in 2009. I was soon persuaded that the three-man rotation was the way to go in the post-season after a conducting a study with Sean Forman on the impact of pitches thrown and rest days on performance. In our analysis of games from 1988 — 2009, estimates showed that days of rest had very little impact on performance. On average, every rest day lowered a pitcher’s ERA by about 0.015; however, the estimate was not statistically different from there being no effect. It seems that most of the recovery benefits that pitchers receive occur in the three days of rest between starts. And though we found the impact of pitches thrown was small, one day of rest was worth throwing about two fewer pitches less than average in the previous game. If you want to get improved performance from managing pitcher workloads, fewer pitches is better than more rest. And the broader lesson is that small deviations in pitches thrown and rest days don’t seem to have much effect.

In the case of Sabathia and Hughes, they should be good to go in Games 4 and 5. In Game 1, Sabathia threw 93 pitches, for the season he averaged 105 pitches per start. Twelve pitches fewer than average translates to an improved ERA by 0.08 runs. And in his previous five and ten starts (where we found stronger effects than the previous game) his average pitches thrown was right on his season average.

In Game 2, Hughes threw 88 pitches, for the season he averaged 102 pitches per start. Like Sabathia, he pitched about the same number of pitches in his last five and ten starts, which included two one-inning relief stints on regular starters rest. According to our estimates, the reduction in pitches thrown lowers his expected ERA by approximately 0.10.

While I don’t expect Sabathia or Hughes necessarily to benefit from having a lighter load in Game 1, I believe each pitcher should pitch about like he has all season if they were to go on short rest. Now maybe the strain of the post-season and the quality of opponent puts a little extra strain on each pitch, but the loads these pitchers are bearing hasn’t been exceptionally high.

Of course, there may be factors affecting the Yankees decision that aren’t public, but if things don’t go well for the Yankees tonight, I won’t be surprised to see Girardi hand the ball to Sabathia in Game 4. Even if the Yankees do win, I think Girardi would be wise to move Sabathia up. The Yankee rotation has struggled as a whole lately, but I don’t think more rest offers much help. I think a tired trio of Sabathia, Hughes, and Pettitte is preferable to allowing Burnett to make a start.

Author: "JC" Tags: "General, Pitching"
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Date: Wednesday, 13 Oct 2010 16:54

Today Tomorrow Today, unless all indications are way off, Fredi Gonzalez will be named the next manager of the Atlanta Braves. Is this a good move? Well, I don’t think it’s a horrible move, like Peter Hjort does. The post is a little vague, but in the comments he points to some examples of poor management by Gonzalez. But still , I’m not too worried. I think the choice reflects the fact that it will be hard to step into Bobby Cox’s shoes, and it’s clear that the front office wants to replace Bobby with a manger familiar with Bobby’s style and clubhouse culture. Gonzalez likely won’t have the autonomy and input that Bobby had, but he won’t be rocking the boat of a team that played well for the most part this year.

In my opinion, mangers don’t have much impact on how their teams perform. They handle the press, they keep order in the clubhouse, and make a few on-field decisions here and there—most of which are non-controversial. The most important thing is to keep the core of this team focused like it always has been. This is a team that was united for Bobby: a manager who loses this clubhouse would face a serious revolt. That’s the biggest danger with this club.

What are some positives that Fredi brings, maybe ones that Bobby didn’t have? Well, he attended SABR 40 in Atlanta this year. I read an article in which someone talked about why he was there (which I cannot find now, link would be appreciated) and he stated that he was looking to hear new ideas. Not sure if he found any (and he missed my presentation with Sean Forman!) but it’s nice to know he’s on the lookout.

I also have personal anecdote about Fredi. In one of my classes, I have the students read Moneyball for an assignment and write a paper about it. Several years ago, a student approached me and asked if she would mind if she got some advice from an acquaintance of hers who worked in baseball. It turns out that the acquaintance was Gonzalez. He worked out at the gym where she worked, and he was happy to talk with an undergraduate student about a school project. I don’t remember the specifics of her paper or the comments that Gonzalez gave her, but he didn’t rail against the book or offer over-the-top praise—after all it’s just a book. Overall, I was impressed that a sitting manager would take the time to discuss a school project with a virtual stranger. Whether that makes him a good manager, I don’t know, but I certainly consider it a positive.

Fredi will have a clubhouse behind him the moment he steps onto the field, which is something that few new managers can do. Let’s hope he keeps their trust and doesn’t screw this up. Welcome back to Atlanta, Fredi.

Author: "JC" Tags: "General"
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Date: Tuesday, 12 Oct 2010 14:01

Last night, the Braves 2010 season came to an end, along with Bobby Cox’s managerial career. I was a good fan this year, living on the hope that good things can happen, even as the odds tilted more and more against the team. Around the seventh inning of last night’s game, I had a moment of clarity: this team has no shot and never did. Sure, the team could lucky-bounce its way into the NLCS and maybe even the World Series, but that was highly unlikely. And deep down, I’d known this team was dead the moment that Martin Prado went down. Even before then, this team wasn’t capable of playing like a 91-win team in the post-season. When Melky Cabrera mercifully ended the season, I was angry and disappointed, but strangely relieved. The 2010 Braves died slowly, but they gave it all they had—not for themselves, but for Bobby. This has been one of my absolute favorite seasons to watch Braves baseball, but it was time to go. Their work was done. In a season that I watched my father die a slow and predictable death, it was strange parallel path to recognize in the the late innings of last night’s game.

Why was Bobby Cox such a good manager? Bobby is not just intelligent, but he likes people and understands them. I can think of exactly three players who didn’t get along with Bobby: Kenny Lofton, Tim Spooneybarger, and Yunel Escobar. There were probably more, but Bobby made sure that such problems didn’t spill out into public. Bobby was once a player, and not a great one. I think one of the reasons he wore spikes was to remind players that he was once were they are: he had walked, and continued to walk, in their shoes. He gave it all he had on the field, and he had never liked being showed up for lacking ability he didn’t have. Bobby had a positive role model, and an anti-role model. He took after Ralph Houck and was careful to avoid doing anything like Billy Martin had done. Bobby understood that to win with the players he had, he had to get the most out of all of them. That meant not just having good players play well, but have the bad ones play as well as they could, too. If a star got an ego and started problems with lesser players in the clubhouse, Bobby didn’t see it as player versus player, but as all players getting worse. He treated all players equally. The rules applied to everyone, and the team would win and lose together. If you didn’t like it, you were going to have problems. Probably the greatest testament to Cox’s ability to handle people is the fact that Gary Sheffield played for the Braves for two seasons, and he didn’t have a single problem. Controversy followed Sheffield throughout his career, but there was none of it in Atlanta.

Bobby also had an eye for talent and was amazingly patient. He would allow young kids to play everyday, and early failures were tolerated as growing pains. Being a general manager helped his patience. He returned to the Braves dugout in 1990s, he would be managing teams that he had built. He watched for long-run success and wasn’t going make snap judgements based on small samples. Sometimes his fondness, or lack of fondness, for a player would get him into trouble. But, I’m a big believer that sometimes the overall qualities that give us our strengths and weaknesses aren’t easily modified. The same stubbornness that allowed him to write Jeff Francoeur in the lineup everyday for far too long was the same thing that allowed him to stick by John Smoltz in 1991 when every one was demanding he be sent back to the minors. You can’t have one without the other.

How good was he has a manager? I recently examined how his players performed with and without Bobby as their manager. I found that the hitters were no worse, and that pitchers were much better (decreased their ERAs by approximately 0.25) when they played for Bobby.

I also have a personal observation of Bobby that made a lasting impression. At SABR 40 this year in Atlanta, Bobby graciously agreed to appear on a morning panel on the Braves rise from worst to first. It was the first session of the day, I think it was at 8am. The night before, the Braves had played a game against the Giants in the sweltering August summer heat and humidity of Atlanta. Late that day he would participate in the festivities surrounding Tom Glavine‘s number retirement, and he had a night game to manage after that. Bobby could have bagged the event and no one would have complained. The panel still had several former players, and we all know Bobby had a lot going on. Not only did he show up, he was in a suit and tie. He was as professional and polite as anyone could be. He answered every question, he signed autographs, and he never looked at his watch. At that moment, I understood why Bobby’s players love him so much.

Bobby Cox is a class act, and I will miss him. Good luck in your retirement, Bobby, and thanks for everything.

Author: "JC" Tags: "Braves, General"
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Date: Friday, 08 Oct 2010 13:36

Last night during Game 1 of the Braves-Giants NLDS, San Francisco fans jeered Atlanta Braves rookie Jason Heyward with the chant “Posey’s Better!” in reference to San Francisco’s Buster Posey being the superior rookie. Frankly, I thought it was kind of rude. Georgia gives you Posey, and you give us Rice-A-Roni. Thanks. There is no doubt that Posey is a phenomenal young baseball player, but let’s not sell Heyward short.

Instead of taunts, let’s look at the performances of the two players this season to see what they provided for their respective big-league this season.

Player 		Positions 	PA 	Batting Runs 	Def. Runs Saved
Buster Posey	C(73%)/1B	443	15.7		5
Jason Heyward	RF		623	26.6		10

With the bat, Heyward produced more runs; with his glove he saved more runs; and he played 40% more than Posey. Simply put, Jason Heyward gave more value to his team than Buster Posey did in 2010, and it wasn’t really close. Using the method that I explain in my new book, I estimated that Heyward’s performance was worth approximately $14 million compared to Posey’s $9 million. Given that there has been so much discussion about who should be the NL Rookie of the Year, how is it that Heyward has such a big lead?

Then main difference between the two players is that Heyward played more. While the J-Hey Kid was taking an early lead in the Rookie of the Year sweepstakes, Posey was in Triple-A Fresno. And the value of runs is increasing, not linear, so the marginal runs added by Heyward were more valuable. Whether that’s Posey’s fault or nor, it’s still value that Posey didn’t contribute.

You might argue that Posey played the tougher position of catcher. Well, he did, part of the time. About three-fourths of his defensive innings were played at catcher, a tougher position than right field. But when he was first called up, he played first base, a less valuable position than right field. And while right field may be relatively less important than catcher, Jason Heyward played it excellently saving ten runs more than the average right fielder. Buster Posey wasn’t as good between his two positions.

Now, past aside, is Buster Posey better than Jason Heyward? An affirmative answer is certainly defensible. But, if you’re going to be jerks about it, this is the kind of analysis that you’re going to get from a bitter Braves fan. So, don’t be surprised if Turner Field welcomes Gerald Demp “Buster” Posey back to Georgia with a classic “GER-ald…GER-ald.” Nah, we’re too nice for that.

Author: "JC" Tags: "Braves, General, Hot Stove Economics"
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