Archive for August, 2008

More on the Gwinnett Braves Cost Increase

Yesterday, we learned that the Gwinnett Braves stadium is expected to cost $19 million more than the initial projection of $40 million. With the $5 million land purchase, the project is on track to total $64 million. Today, Michael Pearson provides some more detail in the AJC.

Here’s what county officials say goes into the increased cost:

> $7.5 million to extend the concourse all the way around the stadium, put a canopy over part of the stadium and upgrade finishes

> $1.5 million to allow for the use of highly treated wastewater to irrigate fields and flush toilets, saving 5 million to 7 million gallons of drinking water a year

> $6.8 million to put the stadium’s storm water detention pond underground, remove unexpected rock, beef up retaining walls to maximize use of the site and increase the size of sewer pipes to deal with a longer-than-expected run to hook up with county facilities

> $1 million to account for increased material costs

> $2.2 million in management fees and other costs that are charged as a percentage of the overall contract

Where will the County get the extra money?

County officials are proposing to pay for the increased costs with $19 million drawn from the county’s reserve fund, said County Administrator Jock Connell.

If the proposal is approved, the county will have contributed $31 million in property tax funds to buy land for the stadium and help pay for construction costs.

That’s more than two-thirds of the original cost of a project that Connell said at the time was expected to “pay for itself from Day One.”

The $31 million doesn’t include taxpayer contributions from a car rental tax and GVCC funds gathered from a hotel tax. And it’s not as though the County has money to spare.

Still, the price bump comes at a time when county officials are trying to cut costs to deal with millions of dollars in unexpected operating costs.

In recent weeks, the county tax commissioner’s office went to a four-day work week to save on energy costs, the county imposed a hiring freeze for non-emergency workers and public safety employees were asked to try to curtail their use of gasoline by handling some routine police calls over the phone, shut cruisers off for at least 30 minutes per shift and fuel firetrucks on the way back from calls instead of making a special trip.

More cost-cutting could be on the way this fall as county leaders work their way through the 2009 budget.

Police and fire protection are asked to cut back while Liberty Media shareholders get a shiny new concourse?

But, county officials remain optimistic.

Commissioner Bert Nasuti, who came up with the idea of attracting a minor-league team to the county in 2006, said the increased cost is unpleasant, but will bear dividends in the end.

“In the long term, it’s going to generate a lot more money for the county than it’s ever going to cost,” he said.

Nasuti is referring to an “economic impact” study that supposedly states that the project will generate $15 million in annual economic development benefits to the county. This is a study that has not been made public (I requested a copy via Nasuti’s website this morning), and I am certain this is because it violates every principle of economic impact analysis: double-counting, unreasonably large multipliers (in my book, anything over 1 is too large, but I expect this one is greater than 2), including spending by locals, etc. Why am I so certain? Because the academic literature on public spending and development has reached a clear consensus that these projects do not improve development. Here is Dennis Coates, President of the North American Association of Sports Economists, on the subject.

Academic researchers have examined the prospective economic impact studies and found a variety of methodological errors in them, all of which raise doubts about the magnitude of the predicted spending and job increases. Other scholars use data from multiple years before and after stadium construction to measure the impact of the stadium. These ex post studies reject stadium subsidies as an effective tool for generating local economic development.

I also contribute a brief comment to the article.

Kennesaw State University sports economist J.C. Bradbury, who has been critical of the county’s handling of the project, said cost increases are almost guaranteed in stadium projects, particularly publicly funded ones.

“Often times in order to seek political support you go out and fudge on the front side of it,” he said.

Here is a recent article in Miller-McCune about Bent Flyvbjerg, who has studied public spending projects around the world. The one constant he finds is the initial cost estimates typically underestimate the true cost by a significant amount.

by collecting data from 20 nations on five continents, Flyvbjerg had produced the first statistically significant analysis to show what Pickrell had argued with case studies: The vast majority of public works projects go drastically over budget and aren’t as well patronized as proponents claim. He also found that modelers didn’t seem to be improving their estimates over time; the scale of overruns remained relatively constant.

Why does this happen?

Few in the field question the existence of faulty cost and need estimates for public works projects. But the experts fight bitterly over the causes for the consistently inaccurate projections and how to address them. Flyvbjerg’s opinions on the subject can be distilled to a single theme: The politicians are lying to us. The conflict between the rationality of hard numbers and the irrationality of public officials permeates the papers he writes on megaprojects….

As Flyvbjerg views it, the economic incentives for large public construction projects are completely out of whack. Local officials predict low costs and big benefits to persuade skeptical citizens and to compete with other local governments seeking federal funds. Flyvbjerg calls the result survival of the unfittest: Instead of approving the best projects, officials end up funding those that look best on paper. And by the time accurate figures rear their ugly head — and megaprojects routinely last longer than a decade, from conception to completion — the officials who launched them are long gone from office.

“You can’t verify that a forecast was accurate unless you build the project,” [Flyvbjerg’s dissertation adviser Martin] Wachs says. “If they build it and the purpose of misrepresenting the costs was to get it built, what do they care if, 20 years later, someone shows that the forecast was incorrect?”

When the Braves threaten to end the lease in 15 years, which is their right under the existing contract, don’t be surprised if Nasuti is relaxing on a Lake Lanier boat dock in Hall County.

Though the deceit with which Bert Nasuti and his cronies have acted is not uncommon, it is still unacceptable. Costs are already starting to rise, and we should expect further cost increases. The fact that county officials are coming clean so soon indicates to me that they anticipate further increases. I expect that the project is heading for a total cost of $80+ million, and the $100 million mark is not out of the question.

Addendum: As of 10am today, this doesn’t appear to be a popular decision.

GDP Poll

I Told You So

Gwinnett County’s new baseball stadium will cost nearly 50 percent more than originally planned, officials revealed Friday.

The 10,000-seat stadium for the top minor league franchise of the Atlanta Braves will now cost $59 million. County officials initially projected the stadium would cost $40 million….

The Gwinnett County Commission will vote Tuesday on spending $19 million from the county’s reserve fund to pay for the increased costs. The county has already spent $12 million from its recreation fund to pay for the project.

But, Gwinnett County officials are not concerned.

“While it appears somewhat shocking I guess how big the increase is, it is not shocking to us,” said Richard Tucker, chairman of the Gwinnett Convention and Visitors Bureau board. The tourism agency is spearheading the project for the county.

I don’t recall such warnings when the project was announced. But I do remember that it was going “to pay for itself from day one” (no, I’m not going to let Jock Connell forget that he said that). This statement was unbelievable based on the previous cost estimate ($40 million in stadium construction and $5 million for land).

I’m not surprised either, because cost overruns are typical in all government projects. In fact, here’s a list of five predictions I made about the stadium on April 02, 2008.

1. This stadium will cost more than $45 million to build.
2. The total annual value of the naming rights deal will be less than $500,000.
3. Gwinnett County residents will see their taxes go up.
4. In 15 years, the Braves are going to use the out clause—non-binding commercial mediation…are you kidding me?—to seek significant improvements to the stadium.
5. Despite the obvious financial losses, the government officials will claim the project was a success, as will the Gwinnett Daily Pompon.

Prediction 1 has already come true. First, the interest the County has to pay on the debt went up. Now the stadium construction costs have risen 50 percent. I’ll go out on a limb and predict that this won’t be the last cost increase.

Prediction 3 will come true, because the revenues will not be sufficient to cover the cost of the stadium. The county is in such financial straights that it has stooped to desperate measures.

The government is facing tough financial times, implementing a hiring freeze except for public safety officers and asking police and firefighters to be careful about using gasoline. But Nasuti said the reserve fund is created for these kind of investments.

Prediction 5 is partially true. Nasuti is still praising the project, but the GDP hasn’t taken as stand on the subject yet—though, the paper deserves credit for reporting the story.

Commissioner Bert Nasuti, said the changes will be looked back on in coming years as wise investments for a project he said will generate much more revenue for the county than it will cost taxpayers.

“We’ve got only one opportunity to build it right,” he said.

We’ll learn about prediction 2 in the coming months and prediction 4 in 15 years.

If you see a public safety officer filling up at a local Gwinnett gas station, be sure to yell “Go Braves!”

You Can’t Blame Frenchy for the Braves Woes…Or Can You?

From David Pinto.

One thing that amazed me during the writing was how much Jeff Francoeur hurt the Braves this season. The Braves have only been outscored 612-590; they should be around a .500 team, not a .435 team. With any kind of decent power from Francoeur, the Braves likely add 30 runs. With all the one-run losses, those 30 runs could be huge. Instead of looking to build a team for next year, they’d likely be in the Marlins spot, on the edge of the playoff race.

Here is a link to his article in Sporting News. Thanks to Tom for the pointer.

The Trade-and-Sign Gambit: A Failing Strategy

What is these players have in common: Gary Sheffield, J.D. Drew, Tim Hudson, and Mark Teixeira?

They were all acquired by the Braves via trade, with two or less years remaining until they became agents. Also, in each case the Braves gave up prospects who were currently or would eventually play in the major leagues. For two years of Sheffield, the Braves traded Brian Jordan, Odalis Perez, and Andrew Brown. For Drew (and Eli Marrero) , the Braves traded Jason Marquis, Ray King, and Adam Wainwright. For one year of Hudson, the Braves traded Juan Cruz, Dan Meyer, and Charles Thomas. For Teixeira (and Ron Mahay) the Braves traded Jarrod Saltalamacchia, Beau Jones, Elvis Andrus, Matt Harrison, and Neftali Feliz.

That list includes many high-level prospects, but the acquired players are all quite good. But there is another angle on these deals that I think is interesting. In all cases, the Braves attempted to use their exclusive negotiation window to sign the acquired player to a long-term extension. In three cases, the Braves were rebuffed and the player left as a free agent. Here is a summary of what happened to each player.

Gary Sheffield

Although they are trimming their payroll, the Braves have stated a desire to re-sign Sheffield. But their bid of about $10 million per season is well below what the Yankees reportedly are offering. (AJC, 11/30/2003)

Sheffield would eventually sign a three-year, $39 million deal with the Yankees; thus, the Braves were offering nearly 25% less than his eventual market value.

J.D. Drew

The Los Angeles Dodgers have agreed to a $55 million, five-year deal with with Drew, who hit .305 with 31 homers and 93 RBIs for the Braves last season. …The Braves wanted to re-sign Drew, but Boras didn’t even respond to the team’s initial contract offer of what was believed to be about $25 million for three seasons. (AJC, 12/24/2004)

Drew reached a five-year, $55 million deal with the Dodgers, from which he would opt out after three seasons. For the three years that he was in Los Angeles, he received $31 million. The Braves offer for this same time period was about 20% less than what he got. After opting out of his deal with the Dodgers, Drew received a substantial raise by signing a five-year, $70 million contract with the Boston Red Sox.

Mark Teixeira

“Teixeira said he had been “open” to hearing offers from the Braves all season, but got none. Wren said the Braves didn’t believe they could re-sign him after making an “aggressive” offer during spring training and having it rejected.

The GM said the offer would have made Teixeira one of the game’s highest- paid players. (AJC, 7/30/2008)

Now, we don’t know exactly what the Braves offered Teixeira, but “one of the game’s highest-paid players” is an empty PR statement that we all should ignore. A deal that averages what he turned down from the Rangers—$144 million over eight years, which translates to $18 million per year—would have made him sixth-highest paid players in baseball. The Braves had to be aware that a similar offer wouldn’t get the job done. This is also significantly less than the $20+ million/year deal that he is currently seeking. I estimated that he would be worth $24 million per year in a six year deal.

If the Braves offered him $19 million per year, that would fit with the Braves’ deficits in offers to Sheffield and Drew. That’s a lot of money, and it’s hard for anyone to sympathize with a player who receives a salary of that magnitude. However, someone will be reaping the financial returns of his good play. Is it so wrong that a player wants the revenue he is generating, especially after he played baseball for six years for a salary that was far below what he was generating in income to club that owns his rights? If you favor limiting player salaries because they are too high, then you need to ask yourself why you favor making owners, who are far wealthier than players, even richer.

Tim Hudson

The only player in the group whom the Braves have held onto is Tim Hudson. One factor that may have swayed Hudson, was his connection to the area. He grew up in nearby Columbus, Georgia, where he followed the Braves. J.D. Drew grew up in Valdosta, Georgia, but Valdosta is a solid four hours from Atlanta, and could easily secede to Florida and no one would notice. Tex went to Georgia Tech; but so did my sister, and she lives in San Francisco. As far as I know, Gary Sheffield doesn’t much like anything, and I suspect he doesn’t care much about geography. It seems that the hometown discount was the deciding factor…or was it?

The Braves signed Hudson to a four-year $47 million extension, which averages out to $11.75 million per year. Since that time he has been worth about $10.5 million per year in revenue, according to my estimates that are based on his play on the field. The estimates take into account both the growth in league revenue and playing time.

Why didn’t the Braves sign these players?

The reason that a team negotiates a contract before it is up is to take advantage of a player’s willingness to forgo risk. Most humans will sacrifice a higher probabilistic income for a guaranteed lower income. The Braves used this tendency to sign Brian McCann to a long-term contract that bought out years of potentially high-salary arbitration awards and free agency. Why didn’t this strategy work with three of the four players who turned the Braves down?

I believe the answer is because these players share two important characteristics: they were already quite wealthy, and they were close to becoming free agents. Gary Sheffield had accrued $93 million in salary from his baseball employers. J.D. Drew had received $17 million. Mark Teixeira will have banked $35 million before he hits the free agent market this offseason. By comparison, McCann’s $750,000 signing bonus and approximately $500,000 in major-league salary that McCann had received over the previous 1.5 seasons made him a pauper. What if he was seriously injured in a play at the plate in 2007? $1.25 million isn’t chump change, but it’s nothing compared to what he could expect to receive in the future and he’s not set for life.

The problem is that the Braves went after these players too late. These guys were already wealthy, and didn’t mind bearing a little risk in order to make a good bit more money during free agency, which was just around the corner. And for all three players it looks to have been the smart move—Teixeira’s fate is still uncertain, but he’s probably only improved his market value this season.

But what about Tim Hudson? Yes, he signed the contract; however, it seems that the Braves offered him his free-agent market value. No deal. If anything, the Braves overpaid Hudson despite the fact that Hudson has been a good pitcher (I like Hudson).

In conclusion, if the Braves have been actively trading for soon-to-be free agents in order to obtain an exclusive negotiating window, it hasn’t worked. The reasons why the strategy has failed are that players reached a point in their careers where they were willing to take on a little risk to shoot for a high return.

I grant that it is easy to criticize these deals in hindsight, and I admit that this problem wasn’t easy to spot at the time that these deals were being discussed. However, the experiences should serve as a lesson for all organizations why an exclusive negotiating window just before free agency isn’t all that valuable.

Is Hank Aaron Leaving Atlanta for Chicago?

John Manasso writes on Hank Aaron’s role in Sports Properties Acquisitions Corp (SPAC), which is one of the final groups bidding to purchase the Chicago Cubs. The story was originally written for Atlanta Business Chronicle, but Sporting News Today also picked up the story, which you can read here for free as long as you register.

It’s hard to imagine the Braves without Hank Aaron, but it is a very real possibility. At the end of the story, I comment on Aaron’s potential role in the deal, as well as discuss why the Cubs and Wrigley Field are being sold separately.

Clearing Some Things Up

My previous post on rebuilding the Braves has caused a bit of a stir. I want to clarify a few things.

— I do not think the Braves are in for a long rebuilding process. I suggest trading away players who may not be around for the long-term. I did not suggest trading away Yunel Escobar nor Jair Jurrjens because they are under the Braves control for five more years. As a fan, I sure hope, and expect, that the Braves will be competitive before these guys hit free agency. In fact, I wouldn’t be opposed to the team signing long-term deals with these players as the team did with Brian McCann.

The point is that if 2009 is lost—and I think it is—then go ahead and lose. Certainly, I don’t want the players on the team to give up. I think that a group of players who are scrapping for respect is a good story. And who knows? If some young prospects and veteran castoffs put together a good season, the team could make things exciting. Then you have the opportunity to make some in-season trades to improve the team in the present. I think building for 2010 and beyond, even if that means losing more in 2009, is the quickest way for the Braves to become competitive again.

— I agree that Kelly Johnson and Casey Kotchman are valuable major league players, and both individuals have opportunities to grow into better players. The fact that they are still controlled by the team that owns their rights for three more years means that they are good players to have on your roster. I get this. It is for this reason that I suggested that they be traded. The Braves can capture some of that value by trading them to new teams that will compensate the Braves for that value. Keeping them around to struggle to .500 doesn’t help much.

Below is a diagram of the relationship of revenue to wins from 2002–2004. (I have some more recent data on my other computer, and it looks similar. Also, I converted all revenue estimates into 2004 equivalents.)

Wins and Revenue

Wins are more valuable for teams that win more games, this means that there are gains from trading players who will have more value on winning clubs. Rather than win more games next season, I suggest the Braves forgo some of these wins in 2009 (which better teams will value more than the braves) for more wins in the future.

— I’m not completely opposed to signing free agents who will help in the long term. For example, San Francisco got a bargain by signing Aaron Rowand to a five-year deal. If the Braves have the opportunity to sign a free agent for a salary less than his marginal revenue product during this offseason, then I am all for it.

— A few posters at David O”Brien’s blog picked up my post, and here is what DOB had to say.

not being critical of the article or the view expressed, just letting you know: It’s not going to happen. Braves aren’t going to approach 2009 like that, and if you’ve heard Wren’s comments about the subject you’d know what I mean. They believe they’ll contend by strengthening a few areas.

Just telling you how they’re approaching it, because they’re not viewing it the way that article proposed. At all.

I’m not surprised. I don’t claim to have all the knowledge relating to the situation, nor am I trying to predict what the Braves will do. I’m a Braves fan, and this is what I think would improve the team. Maybe Chipper is more valuable to the Braves than I think he is. Maybe the gains to winning a few more games for an average team are more than I estimate. Maybe the budget is going to balloon and the team is going to attempt to improve through free agency and trading prospects for proven veterans. I don’t work from the Braves, and I know that I’m not the most popular guy in the executive halls of Turner Field.

But, I do hope that members of the Braves front office are not deluding themselves into thinking that there is a high probability that this team makes the playoffs next year by adding a few free agents. This team needs more than that. I’d rather see the Braves take a shot at retooling for 2010 and beyond than adding pieces for a run in 2009.

Addendum: I wasn’t clear enough in my discussion of Mark Kotsay. I don’t think the Braves should make signing him a priority at all. If he wants to give the Braves a discount to play everyday—something that I heard mentioned as recently as last night—then it might make sense to let him man the position instead of Gregor Blanco or Brandon Jones. I believe Blanco and Jones are marginal major league players who have value as back-up outfielders. If another team wants to trade the Braves something of value for them, Kotsay might possibly be the cheaper placeholder. But as a practical matter, I’m not sure they would bring much in return. There is nothing inherently wrong with signing free agents or trading away prospects. My point was that the decision to sign Kotsay depends on what the Braves can get for him or his potential replacements.

Looking Ahead

A common question I’m getting these days is “what should the Braves do now?” Until recently, I was hesitant to give a concrete answer, but I think my reluctance to comment was more a product of the fear of knowing the answer rather than not knowing. So, today I’ll offer up my plan for the future: the future is rebuilding.

When Tim Hudson went down 2009 was lost completely. The starting rotation next year looks like Jair Jurrjens, Jorge Campillo, Charlie Morton, Jo-Jo Reyes, and Chuck James. Jurrjens looks to be good, Campillo has been surprising and could continue to pitch well (shame on the Mariners for not finding him some more innings), but the latter three are not dependable yet. What about help in the minors? Possibly, there is some help on the way, but I don’t think it’s good policy to count on players who are still in the minors for the following season. In fact, having prospects who are in single and double-A is more of a reason to sacrifice 2009 for 2010 and beyond. If Hudson would be there to anchor the rotation, I might be a bit more optimistic. But for the Braves to contend in 2009 with this pitching line-up, everything is going to have to break for the best. That’s not a good guide for planning.

On the hitting side, Chipper Jones continues to be one of the best sluggers in the majors, despite being injury prone. Brian McCann couldn’t play much better than he has. Yunel Escobar and Kelly Johnson are above-average hitters for middle-infielders. Casey Kotchman is serviceable, but not spectacular, at first base. The outfield is a complete disaster, and there is no help close on the farm—please, don’t count on Jason Heyward or Jordan Schafer just yet.

The Braves supposedly will have some money to spend on free agents, but even if the Braves could afford three top free agents like CC Sabathia, Pat Burrell, and Adam Dunn, this team still most likely misses the playoffs next year. And Chipper Jones will be a free agent after 2010, who will need to be replaced.

If everything breaks just right, it’s possible that the Braves could make a playoff run. But, it’s more likely that the team falls short, and ends up with a group of good expensive players without the supporting cast to push them over the top. So, what should the Braves do?

I think the Braves should trade the following players.

Chipper Jones: The Braves have an option on Chipper’s contract for next year for between $8–$11 million, that will vest when Chipper gets 450 PAs. Chipper has 10-5 rights, which means he must approve any trade. I think Chipper would be willing to play for another team that has a chance to win (a source has told me that this is the case). And if the Braves are rebuilding, I don’t think he’ll miss being part of the process. Sure, some fans will miss him, but it’s not like the organization heavily promotes him now. Chipper will go into the Hall of Fame as a Brave, that is settled. And the fact that his bat can net prospects that can help the team rebuild is an asset that the Braves shouldn’t waste. for nostalgia. Maybe Chipper doesn’t want to go anywhere, and I would miss seeing him in Atlanta, but I will not be shocked if he is traded. It is the smart move. His contract is affordable, and he should bring some decent prospects in return.

Kelly Johnson: I like KJ. He’s an affordable player who will become arbitration-eligible after this season. The fact that he is controlled for the next three years is what makes him valuable. If the Braves are contenders again in two years, he’s not going to be so cheap. I think the Braves should cash in his value, similar to what the A’s did with Nick Swisher last season. There is nothing flashing about Kelly. He’s an everyday second baseman with average defense and he is an average hitter—he would be an asset on most teams. Plus, if Bobby Cox likes Martin Prado so much, why not let him play some more?

Casey Kotchman: There is nothing special about Kotchman. He’s pretty bland, but he’s the type of player that many teams need to fill a hole. He’s cheap like Kelly Johnson. The Braves don’t need him, so I say move him if you can.

Omar Infante: He’ll be a free agent after next season. I see no reason to hold onto him if another team is willing to take him. He’s coming off his best season, so maybe he can snag an OK prospect.

Here are a few other questions that I’ve heard.

Should the Braves Jeff Francoeur? I don’t subscribe to the notion that bad players should be traded. He is better than his numbers, but that’s not saying much. On nearly every other team in the majors, he would have spent most of this season in the minors. The team rushed him and ruined any chance they had of fixing his obvious deficiencies. The Braves made him a piece of their marketing campaign—and the team should have known better—and that is a difficult thing to take back. If his reputation keeps the turnstiles rolling and a Delta sign over the 755 Club, go with it. At this point, I think the ship has sailed on making improvements that would turn him into a good player. I am curious to see what his arbitration award will be this season, but he’s going to be cheap. No team values Francoeur more than the Braves do, and thus I don’t think there are gains from a trade. He is where is services are valued the most.

Should the Braves sign Mark Kotsay as a free agent? It depends on what he wants. There is nothing spectacular about the guy. And it might make more sense to hold on to Kotsay and trade away Brandon Jones or Gregor Blanco. I suspect he’ll get a better offer from another team and move on. Players always say how much they like playing here before they take the biggest contract. I don’t blame any of them, I just don’t buy cheap talk.

What about preserving excitement? The Braves have missed the playoffs three years in a row. Is there much excitement about this team? The atmosphere surrounding the team is stale, and I think we could all use a change. Fans may prefer some buzz about a group of young players just on the cusp of success…that is, as long as the Braves don’t anoint a particular player as a star prematurely (see Jeff Francoeur).

So, there you have it.

Did Steroid Use Enhance the Performance of Mitchell Report Hitters?

According to a new study published in Journal of Quantitative Analysis in Sports (JQAS)—Did Steroid Use Enhance the Performance of the Mitchell Batters? The Effect of Alleged Performance Enhancing Drug Use on Offensive Performance from 1995 to 2007 by Brian J. Schmotzer, Jeff Switchenko, and Patrick D. Kilgo—the answer is yes.

Conclusions: This analysis suggests a significant and substantial performance advantage for players who used steroids during the study period. It is estimated that offensive production increased approximately 12% in steroid users versus non-users. This analysis represents the first attempt to quantify the overall effect of PED abuse on offensive performance in baseball.

This study intrigued me, but the results are highly suspect because of obvious factual errors that should have been caught by a referee. I think the errors in the paper need to be addressed before we accept the results.

Though the empirical method employed—a mixed effects estimation—isn’t one that I would choose, I suspect that it ought to get the job done. Also, I don’t like the method used to account for aging, and I believe the method might bias the results (see my latest study on aging in baseball in Journal of Sports Sciences). I’m going to overlook these things, for now. What concerns me about the paper is the designation of players as users and non-users.

According to the paper, the authors identified performance-enhancing drug use in the following manner.

all steroid or HGH use was inferred strictly from exact years listed in the Mitchell Report corresponding to the seasons which may have been artificially aided by PEDs. Every attempt was made to use conservative measurements for alleged steroid use and non-use by players. Conservative, in this sense, means that even when the Mitchell Report listed anecdotal evidence or implied guilt by association, these seasons were not labeled as PED seasons unless there was a definitive statement in the report (specific dates and paper trails of evidence). A more liberal reading of the report (not considered herein) would have led to many more player seasons labeled as PED seasons. (p. 3)

This is certainly a defensible method—though, I would like to have seen results with “a more liberal reading” as well—however, I lack confidence that the authors employed their designation properly. What shakes my confidence? The paper highlights instances where judgment calls were made, and in a few cases those judgments are incorrect.

Case 1:

Mark McGwire – McGwire is named in several places in the Mitchell Report for his use of androstenedione in 1998 (the only season designated for him as a PED season). Androstenedione is thought to be a pre-cursor to steroids but not actually a steroid. However, it is a banned substance at present and thus his 1998 season was classified as a steroid season for the purposes of this analysis (p. 3).

I only have a minor problem with this designation—and it is by no means a damning error—but I think it is relevant. Andro is not an anabolic steroid, and if McGwire’s hitting success was fueled by PED use, andro was not the culprit. The literature on the ergogenic effects of andro indicates that it is not an effective aid. If the authors had reviewed the literature on andro as they did for growth hormone, they would not have designated this as a steroid season. And, it just so happens that 1998 happened to be an outstanding season for McGwire—the second highest RC/27 (the metric used to measure output) of his career. If he did use PEDs, it is likely that he used other PEDs for many years, not andro during this single season. I understand that identifying the exact dates of use is difficult, but this is an odd choice.

Case 2:

Barry Bonds – The Mitchell Report pinpoints Bonds’ steroid use to the 2003-04 seasons. It also hints that the use could have extended back as far as the 2000 season, but only based on his associations rather than stating an allegation definitively. Therefore, only the 2003 and 2004 seasons were classified as steroid seasons for the purposes of this analysis (p. 3).

This designation is what first alerted me that there might be problems with the study. To someone who has closely followed the Bonds case, it is obvious that these dates do not correspond with alleged doping by Bonds. Even those who have casually followed Bonds’s PED allegations ought to wonder why Bonds’s record-breaking 2001 is considered “clean” in this analysis.

BALCO was raided in September 2003, and Bonds testified to a grand jury about his involvement in December 2003. If he used in 2004, he had to have had another supplier, and he was boldly using drugs while under heavy suspicion and facing random drug tests. The Mitchell Report does not pinpoint any PED use in 2004; however, it does document his first visit to BALCO in 2001. Game of Shadows, the main source of the Mitchell Report’s discussion of Bonds, alleges steroid use beginning after the 1998 season. 2004 happens to be Bonds’s best season in terms of RC/27, and it’s classified as “dirty”.

I’m going to come back to this in a moment, because the inclusion of Bonds in the sample is important to the authors’ claim that Mitchell Report hitters demonstrated improved performance.

Case 3:

David Segui – Segui admitted to using steroids in the 1994-95 seasons; however, his paper trail of evidence with Radomski begins in 2004 and lasts through 2005. Therefore his 1996-2003 seasons are not classified as steroid seasons (p. 3).

This is not accurate. The paper trail to Rodomski (and PED use) in the Mitchell Report begins prior than 2004. And, this isn’t an easy mistake to make. Segui may be the most-mentioned player in the the Report. Here are the mentions of Segui’s ties to PEDs in the Mitchell Report.

“In 1999 or 2000, Chuck Hawke, an attendant working in the visiting clubhouse in Kansas City, found syringes and vials that were hidden in an Oakley sunglasses bag when he was unpacking luggage for David Segui” (p. 110).

“According to Radomski, Deca-Durabolin was Segui’s steroid of choice in the 1990s because it was safe, did not expire for three to four years, and was thought to help alleviate joint pain. Deca-Durabolin, however, stays in the body for up to a year or more and therefore is easily detectable in tests. Radomski said that Segui paid for the steroids by check although Radomski never asked him to pay for them. Radomski produced six checks drawn on David Segui’s checking account that were deposited into Radomski’s checking account….Radomski said he engaged in more than twelve transactions with Segui and dealt with Segui more than any other player. Toward the end of his career, Segui told Radomski that he had a growth hormone deficiency and was getting human growth hormone from a doctor in Florida (p. 151). Note that Segui purchased anabolic steroids, not growth hormone, from Radomski.

“McNamee first learned about Kirk Radomski through David Segui during the 2000 season” (p. 170).

“Kirk Radomski recalled meeting McNamee through David Segui. Radomski confirmed that he supplied McNamee with human growth hormone and anabolic steroids from 2000 to 2004” (p. 174).

“Radomski believed that Santangelo was referred to him by David Segui when both played for the Expos between 1995 and 1997” (p. 182).

“According to Radomski, he was introduced to Lansing by David Segui while Segui and Lansing played together with the Expos….Radomski produced two $1,000 money orders from Lansing, retrieved from his bank, made payable to Radomski; both were dated February 5, 2002” (pp. 196-197).

“Hairston was referred to Radomski by David Segui, his teammate on the Orioles from 2002 to 2004. Radomski said that he sold human growth hormone to Hairston on two or three occasions during 2003 and 2004” (p. 207).

The Appendix includes three personal checks from Segui to Radomski with dates prior to 2004: two checks from 2002 and a single check from 2003 (p. D-18).

David Segui did not play baseball in 2005; although, it may be that this date was not included in the sample and simply refers to irrelevant evidence from that year.

There appears to be strong evidence that Segui was an active user of steroids continuously during his major-league career. I found these examples using a simple search of “Segui” in a PDF file of the Report. I can find no explanation for the authors’ chosen steroid designations of 1994–1995 and 2004–2005. At the minimum, 2002 and 2003 should be listed as dirty. And if there was some concern about whether or not he was using, he should have been excluded from the sample.

If the authors made these types of errors, then I have no confidence for the designations used for the other players in the sample. This is especially important considering that the results appear to be fragile.

What if we assume these are the only mistakes in the study, and that the Segui coding errors are unbiased and average out? According to the authors’ reported results, the performance effect may disappear, though they do not stress this in the paper. When Bonds is excluded from the model and the performances are centered around player averages (as they should be) the estimates of the correlation between Mitchell Report inclusion and performance are not statistically significant. See Table 1 (Models 6 and 7) and Table 2 (Model 12) on page 11. This means that players cited in the Mitchell Report did not perform in a way that is outside the normal deviation in performance from players not cited in the report.

In summary, this study contains serious errors. I would like to stress that I do not think that any of the mis-coding was intentional; I work with data, and I understand how easy it is to make mistakes. However, the authors and referees should have caught these errors, especially considering that the results are quite different from those reported by Jonathan Cole (sociologist, Columbia) and Stephen Stigler (statistician, University of Chicago) in The New York Times (a study cited by the authors).

For the 48 batters we studied, the average change in home runs per year “before” and “after” was a decrease of 0.246. The average batting average decreased by 0.004. The average slugging percentage increased by 0.019 — only a marginal difference. So while some batters increased their totals, an equal number had falloffs. Most showed no consistent improvement, several showed variable performance and some may have extended the years they played at a high level, although that is a difficult question to answer.

It is possible that the coding is defensible in a way that is not obvious to me. I hope that the editor of the JQAS will re-review the paper and ask the authors to justify their designation or redo the study with correct coding. My goal is to find truth, and I do not wish to embarrass anyone. But in the meantime, if you notice someone citing this study, please be sure to note its problems.

UPDATE: The authors respond.

So, You Think the Braves Are Going to Trade Jeff Francoeur?

Think again.

From the Atlanta Braves website.

Braves v. Cubs Ad
(Click on the image for full-size view.)

You read that right. “Jeff Francoeur and the Braves take on Alfonso Soriano and the Chicago Cubs” on August 12, 2008. That’s a right fielder with a .633 OPS versus a six-time All-Star.


Name the Gwinnett Braves Mascot

The always objective Gwinnett Daily Post has joined forces with the Gwinnett Braves to host a naming contest for the team’s new mascot.


Inspired by General Beauregard Lee, the well-known weather forecaster that makes his home at the Yellow River Game Ranch in Lilburn, the fuzzy, burrowing rodent was the first choice for the face of Gwinnett’s own minor league team.

A burrowing rodent from Liliburn could also describe Gwinnett commissioner Bert Nasuti.

“We’re pretty pleased to be able to deliver something that has some local ties,” Gwinnett Braves assistant general manager Toby Wyman said.

You know, because when I think Gwinnett County, I think…groundhog? I was hoping for twin water towers. “Mommy, take my picture with Gwinnett is Great. Oh wait, here comes Success Lives Here!”

Water Towers

Wyman said the Gwinnett community didn’t have an opportunity to name the team, as communities typically do when getting a minor league organization, but naming the mascot may be the next best thing.

They also didn’t have a chance to vote on or even discuss transferring tax dollars to Liberty Media shareholders. But hey, you get to name a groundhog! Let’s call it even.

I’d like to host an alternate naming contest. It has to be a name that describes the actions employed by the Board of Commissioners to get the team. Something like Grafty the Groundhog, but not quite so lame. Please submit your ideas in the comments.

The winner gets a signed copy of The Baseball Economist. Submissions must be received by August 27, and I will announce the winner on September 1 (these dates are the same as the real contest). I am the sole judge of the winner, but I may seek the opinions of friends. I reserve the rights to change contest rules—including suspending the contest—and deny participation to anyone. I don’t foresee a problem, but I’m just saying.

If you want to submit an entry to the official contest (not my contest), follow these instructions.

Contest entries can be submitted online at or by mail through Aug. 27. Three finalists will be selected by a panel of Atlanta and Gwinnett Braves staff members and announced Sept. 1. An online poll will then be conducted to determine the winning name, and voting will conclude Sept. 5.

And check out the prize.

The winning name, along with the mascot, will be disclosed later in September, and the contest winner will receive a trip for two to the 2009 Triple-A All-Star game in Portland, Ore.

Sweet, a free trip to Powell’s.