MONEYBALL: WHERE IT WORKS & WHERE IT DOESN'T

Ever since the book came out, Moneyball has been the talk of baseball strategists. The thought that there is some secret formula to finding successful players who are flying below the radar makes both fan and baseball executive salivate. So, does the formula work? Does it have any resemblance to reality? If it is so accurate, then why hasn't Billy Beane's team won a World Series yet? 

As I have written in times past, I am a numbers guy. I believe that if you look at statistics in the right way, and that if you include the right amount of data, the numbers will tell you a story that may not be obvious to the casual observer. This is true in finance, in medicine, in every legitimate scientific study, and it is true in baseball too. The fact is that we have always known this. A guy hits .300 or more, and he has proven that he is a good hitter. He hits more than 30 home runs, and we know that he has power. A pitcher with an ERA below 3 does not allow many runs and usually wins. Those are conclusions we have all drawn based on established statistics.

So, how is Moneyball different? It believes that you do not need to spend a lot of money on players, that you can find strong talent by paying attention to statistics that most teams are not looking at and therefore find hidden talent. It also helps you avoid overpaying for players that have "good numbers" but are not helpful in getting a team to win. The statistics are based on some simple principles. Here's an example. The more runs you score, the more likely it is that you will win. The more men you get on base, the more likely it is that you will score. The more likely it is that a hitter will get on base, the bigger the contribution that hitter will make to scoring, and ultimately to winning. That is the reason why walks and OBP are key statistics in evaluating players. Then, using some complex formulas, you use those statistics to determine how much to offer players in contract negotiations, or how high to draft college players. There are more statistics that they take into consideration as part of Oakland's overall system, but you get the point.

(In Photo: Oakland Athletics in 2002) Does it work? It depends on how you define success. If you measure it by the team's ability to win games over the long haul, absolutely! If you look at the Athletics since 2002, the Athletics have won 90 or more games five times and won their division four times. If you measure it by post-season success and World Series Championships, it fails. So where is the disconnect? For one thing, you have to remember that the statistics considered are aggregated over entire seasons and careers. They do not consider the differences in performance during the regular season and the playoffs. Have you ever seen players who perform well in the regular season and then collapse in the playoffs? Billy Beane's system does not account for that. Knowing, also, that players and managers make special preparations to handle opposing players strengths and weaknesses during the playoffs also is not taken into account.

Finally, you have to remember the purpose of the Moneyball system. It is about money. The key measure of success of a team, according to the system, is how much a team pays "per win". This is based on the premise that the team implementing the system does not have a lot of money to spend. Essentially, it is about fielding the best possible team given very limited resources - getting bang for your buck. It is not about fielding the best possible team regardless of budget. While the system shows diminishing returns on excessive spending, we see that there are still returns on that spending. A team with a modest budget will probably get more success than a low budget team, even with this system. It would also indicate that as teams are forced to spend less, through either a luxury tax system or a hard cap, "Moneyball teams" would end up benefiting the most. Either way, we think it is great that statistical analysis is having such an impact on the game and the way it is changing.

--Ike Dimitriadis, BYB Writer
Twitter: @KingAgamemnon
My blog is: Shots from Murderer's Row



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