Archive for December, 2008

“Paying for Itself” from Day One

Amazing! The Gwinnett Braves Stadium is paying for itself before it even opens. By “paying for itself”, I mean—and I guess Jock Connell meant it too—that tax revenues from Gwinnett citizens are already being diverted to Liberty Media shareholders to pay for the stadium that will generate revenue for them.

The first payment on bonds sold to build Gwinnett’s minor-league stadium is due in January, but officials said the money is already in.

Gwinnett Budget Director Chad Teague said officials thought the money would be due by the end of the year, but instead, the $1,587,067 will be paid in January. The money will be carried over from 2008 to 2009’s budget, he said….

The car rental tax is the only revenue that began collecting in 2008, and Teague said the money has been coming in faster than officials expected.

Through November, the county collected $513,057.43, nearly 50 percent higher than the $350,000 officials had forecasted for the time period.

“We should be fine,” assuming the parking revenues and ticket surcharges meet expectations, Teague said of the inability to sell the naming rights. “We’re ahead of the game on the car rental (tax). Right now, we’re in pretty good shape.”

The article is confusing. Does this mean that county officials thought the first payment was due in December 2008 when it was really due in January 2009? If so, these guys are really on ball. It reminds me of the county official who didn’t know what type of bonds were being used to fund the stadium.

And so much for the notion that car-rental taxes are covered by stadium visitors: this tax is payed by Gwinnett citizens with car trouble.

Happy Christmas

Peace on Earth

I wish you a happy and safe holiday season.

Gifts for the Baseball Analyst

I’ve got family coming in and out of town over the next two weeks, so I’m not planning to post much (if at all) during this time. I thought I’d leave you with a list of gifts for the baseball analyst. These are the books that I recommend.

Moneyball by Michael Lewis — A good introduction to the big picture.
The Numbers Game by Alan Schwarz — The entire history of baseball analysis. I reference it frequently.

Whatever Happened to the Hall of Fame by Bill James — A good introduction to the objective analysis of Bill James.
Baseball Between the Numbers by Baseball Prospectus — A good introduction to sabermetrics. I don’t agree with everything in the book, but it offers good coverage modern sabermetrics.
The Baseball Economist by J.C. Bradbury — If you want to know what I think. 🙂

Curve Ball by Jim Albert and Jay Bennett — An easy-to-read introduction to the application of statistics to baseball by two statisticians. A must for the serious baseball analyst.
Baseball’s All-Time Best Sluggers by Michael Schell — The best treatise on hitting ever written, by a UNC biostatistics professor who grew up in my neighborhood and played in my Little League (we didn’t know each other, though). This is not light reading.
Baseball Hacks by Joseph Adler — A guide to acquiring and organizing baseball data from the web.

I wish you a happy an safe holiday season.

What If…

David O’Brien explains why the Braves might be reluctant to sign an outfielder to a long-term deal.

Among hitters, I just don’t think the Braves have any desire to give a three-year or whatever contract to a poor defensive outfielder like Pat Burrell or Adam Dunn. Not that they couldn’t use the homers (they obviously could), but I don’t think they want to go long-term with a guy who’d block one of the younger outfielders a year or two from now, namely Jason Heyward, their top position-player prospect.

What if, just what if, Francoeur were to get his career back on track in 2009? Then a year or two from now, when Jordan Schafer or Gorkys Hernandez is in CF and Francoeur’s a fan-favorite again in RF, do you just assume you’d be able to shed the salary of a Burrell or Dunn and open a spot for Heyward?

If the Braves are thinking long-term (and they are), they’ve got to plan accordingly, to have room for the prospects they’re grooming now in a farm system is back to a healthy state with a lot of legit prospects who’ll be in the upper tiers this year, not a farm system where most of the best prospects are in rookie or A-ball the way they were a year or two ago after the Teixeira trade.

What if Jeff Francoeur gets his career “back on track”? By getting back on track does he mean a below-average corner outfielder or plays like he did after he was first called up? I suspect the latter, and I think that is very unlikely. I mean what if Chipper Jones bats like he did in 2004? It’s not good policy to base decisions on unlikely scenarios.

But, let’s say Francoeur does blossom into a star, and Heyward, Schafer, and Hernandez are ready to join the team in 2010. Well, then you trade from a surplus in one area for a more-desirable basket of players. I consider this to be a nice problem, and I don’t worry about this potential occurrence. Having Jim Thome when Ryan Howard was ready to play wasn’t a problem for the Phillies.

On Frank Wren

With the collapse of the Furcal-to-Atlanta deal, Frank Wren has been getting a lot of criticism. I’m not sure it’s warranted, but I think now is a good time to pass along a few thoughts related to the Braves GM.

  • I heard Frank Wren on the the radio this morning (790 The Zone podcast), and he’s not happy about the Furcal situation. He stated a few important points that I want to pass along.
    • Furcal’s agent left a voice mail asking for a “term sheet” and stated “we’re good.” Wren emphasized that “we’re good” was a direct quote, and that in a business where face-to-face meetings are rare this constitutes a done deal.
    • He stated that he had talked to Furcal about moving to second base, and Furcal indicated that he was fine with the move.
    • Furcal’s agent did come back with further demands, but the terms were ones that the agent knew the Braves would reject, including a no-trade clause.
  • Frank Wren is a good interview. He is nothing like his predecessor in this area. He responds in detail to questions, giving more than the minimum. He’s emotional, but conveys rational thoughts even when expressing emotions. John Schuerholz always sounded to me like he had other things to do and was annoyed by questions.
  • I’m not sure you can say that Wren has performed differently from Schuerholz. My impression is that the Braves front office is a brain trust that still includes Schuerholz. When Wren was an assistant GM, he probably had a lot more power than most GMs. As a GM, I think that he has a little less power relative to other GMs. That doesn’t mean that Wren isn’t the leader, but I think the transition from Schuerholz to Wren hasn’t changed much about the organization. I recall that Schuerholz had considerable trouble working with agents.
  • Recently, I referred to Frank Wren as a stat-head. The stat-head designation was meant to be humorous, and I did not mean for it to be taken seriously. Since that post, I have seen several references to Wren being stat-savvy, and I think my post is partially responsible. I want to clear this up. I am sure that the Braves use statistical methods to help evaluate talent just as all ballclubs do. There is no organization that eschews quantitative analysis; however, some are more partial to stats than others. The information I have about Wren is that he is not a stat-focused decision-maker. From speaking with several sources regarding Wren, my impression is that Wren is somewhat hostile to quantitative analysis. Just because Wren used some DIPSish reasoning to defend a pitcher doesn’t mean that type of analysis is driving the organization. My guess is that ocular scouting played a larger role in evaluating Javier Vazquez than quantitative analysis.

How I Value Players

I have been getting many requests to explain my player valuation system. I have added the following to the FAQ page.

How do you estimate the value of baseball players?

The method I use is complex and involves many steps. What follows is a brief explanation. I provide a detailed explanation in my book. Since its publication I have made a few minor modifications that I will detail in an upcoming book, but the basic structure is similar.

I estimate the impact of winning (via run-differential) on revenues (using Forbes’s The Business of Baseball report, various years). Then, I estimate the impact of player performance on run production (hitters) and run prevention (pitchers). These estimates are adjusted for home-park influences. I also add an adjustment for defense. In some cases I assume the fielder is average for his position, in other cases I use the Plus/Minus system to adjust for defensive quality. I then convert the run-contribution estimates to dollars using the estimates of the impact of winning on revenues. Because the impact of winning on revenue is non-linear, the reported values assume that the player is added to a .500 team. Players added to teams with above (below) average records generate more (less) revenue. The estimates are also gross (not net) marginal revenue product estimates, and therefore do not account for costs such as coaching, medical care, etc.

For projecting players into the future, I assume that league revenues grow at an annual rate of ten percent, which is consistent with the history of league salary growth. I also make an adjustment for aging.

I’m Not a Sabermetrician

Rob Neyer has a nice post in which he uses my valuation of Raul Ibanez as an example where the sabermetric community is not in agreement. Rob has a great point: there is a lot of disagreement among baseball analysts.

The sabermetric community is quite broad, and I’m not sure how to properly define it. But, I will say that I consider myself to operate outside of what most people consider to be the sabermetric community, but that I often study similar questions. It wouldn’t be incorrect to say some of what I do is sabermetrics, but my approach and methods are different than the community standard. This doesn’t bother me.

I’m an economist. I didn’t grow up reading Bill James, playing Strat-O-Matic, or participating in old Usenet groups. I wish I had been aware of these things, but I think that my outside perspective has been an advantage when analyzing baseball.

In the comments on Rob’s site, there are two comments that I want to post here. The first is from Mitchel Lichtman (MGL).

JC, with all due respect, is an economist with some knowledge of sabermetrics and not a sabermetrician. As well, I don’t think he is an expert on projections by any means. There are plenty of experts with respect to projections, and I don’t think – in fact I know – that any of them will project his value at anything close to 14mm per year.

And this is my response.

I agree with MGL, I shouldn’t be considered a sabermetrician. I have never claimed to be a member of this community. What I do is apply my knowledge from my economics training and experience with analyzing data to issues in baseball. While MGL believes I do not understand certain sabermetric principles, I believe many sabermetricians (MGL included) underestimate the difficulty in analyzing baseball phenomena, especially when it comes to valuing players. Sabermetricians have made important discoveries (Voros McCracken’s work on DIPS was an important and correct finding); however, much what passes for research within this community is not sufficiently rigorous to reach the conclusions often claimed. There are many academic researchers from a variety of fields who have significantly advanced the understanding of baseball that receive scant mention in the sabermetric community. For example, Michael Schell’s Baseball’s All-Time Best Sluggers is the most thorough treatise on hitting ever written; yet, few individuals mention his work or attempt to replicate his methods. You rarely see economists Gerald Scully or Tony Krautmann mentioned when attempting to value players, despite the fact that their methods were published in reputable peer-reviewed economics journals, where established experts vetted their work. Academics are not always right, but I believe the checks ensure they are more likely to reach correct conclusions than informal online discussions.

Just to clear things up.

Valuing Moyer

Jamie Moyer just re-signed with the Phillies for the next two years at $13 million. This is where estimating expected marginal revenue product becomes a pure art. Moyer will be 46 and 47: ages at which most humans can’t play baseball any more. There is no aging curve to follow; it’s more about whether or not he’s going to wake up one morning and have his body say “enough!”

So for this valuation I’ll just note that his value over the past three seasons has been between $10 and $11 million per season. $6.5 million for two seasons is probably a good gamble to take. The contract also includes performance bonuses to compensate Moyer for pitching benchmarks that he’ll likely be worth if he surpasses them.

He will receive base salaries of $6.5 million in each of the next two seasons, and he can make an additional $1.25 million in performance bonuses each year: $250,000 each for 150, 160, 170, 180 and 190 innings pitched.

In addition, his 2010 base can escalate by up to $4.5 million: $250,000 each for 150 innings and 23 starts, and $500,000 each for 160, 170, 180 and 190 innings, and 25, 27, 29 and 31 starts.

Furcal Returns

According to Ken Rosenthal, Rafael Furcal is on his way back to Atlanta. On the radio this morning, I heard the terms stated as three years at $9-10 million per year, with an option for a fourth season. David O’Brien of the AJC agrees with the number of guaranteed years, but I haven’t seen any other reference to the dollars or the option year.

Furcal is a valuable player. He’s a shortstop who can play defense and hit, and he’s only 32 (we think). Over the next three years, I estimate his value to be $49 million ($16.33 per season). If the terms of the deal are correct, this looks to be a good deal. His health is a major factor here. If he’s healthy, he’s worth more; if he’s not he’s worth less.

The deal creates some new questions. The Braves now have three good middle-infielders. DOB suggests this may open the door to a Jake Peavy or Zack Greinke trade. Danny Knobler has a source who claims the Braves plan to move Kelly Johnson to left field. This conflicts with Frank Wren’s recent statements.

Displeasure with Yunel Escobar has been an item on the Braves off-the-record talking points for most of the off-season, so I think the best bet is that Escobar is moved in a deal.

As a fan, I’m a bit disappointed with this move. I understand that there is a distinction between what players do on and off the field. Furcal’s second DUI in the city that I live really soured me. At the time, I wanted the Braves to suspend him for the season. I don’t think he even got the night off. I find it amazing that Barry Bonds can’t find a job because of his association with performance-enhancing drugs, yet you don’t even see Furcal’s drunk driving issues mentioned. It hasn’t even been two years since Josh Hancock was killed in a drunk driving accident.

Don’t individuals deserve a second chance? Yes, he got one: that’s two DUIs. I’m sorry, but I’m going to have trouble rooting for this guy.

UPDATE: According to Mark Bowman, the Braves are planning to move Johnson to the outfield.

Where Furcal would be positioned defensively remains to be seen. But the Braves have no intention to trade either Johnson or Escobar. Instead, they are planning to move Johnson back to left field, a position he played before moving to second base before the start of the 2007 season.

The opportunity to have both Furcal and Johnson in their lineup proved more appealing to the Braves than any of the options they were evaluating in their search to find a power-hitting outfielder.

With Johnson, they feel they have a player capable of hitting 15-20 homers. Matt Diaz could also see some time in left field.

Uh, what about right field?

ANOTHER UPDATE: Apparently, it’s not clear that Furcal is coming to Atlanta. John Heyman sums up the saga.

So to recap, Furcal rejected a four-year deal for about $40 million with the A’s to talk to the Braves about a three year deal for $30 million with a vesting option (and according to the Braves, agree to that deal). And after allegedly wrapping things up with the Braves, he’s believed to be talking to the Dodgers, mostly likely about a two-year deal with an option.

If he takes a two-year deal with the Dodgers, he will be the first player ever to reject a four-year deal to take a three-year deal for a similar annual salary only to reject that for a two-year deal for a similar salary. If this keeps up, the next stop would be a one-year deal.

Ibanez Versus Burrell

The Philadelphia Phillies unceremoniously dumped Pat Burrell last week by not offering him arbitration and replacing his roster spot with Raul Ibanez. Ibanez has reportedly agreed to a three-year $31.5 million contract ($10.5 million/year) with the Phillies. The differences between Ibanez and Burrell are subtle: Ibanez will be 37 next year and is left-handed, while Burrell is 32 and right-handed. They are alike in that they are both poor-fielding outfielders with good bats, both with OPS+ consistently in the 120s during the past few seasons.

With Ibanez, the Phillies will get output similar to what Burrell gave the team. Given his age, injury may be a bit more likely for Ibabez, but I project their values to be close over the next three years. I project Ibanez to be worth $46.5 million ($14.5 million/year) and Burrell to be worth $48 million ($16 million/year) over this time span. I’m unsure of what Burrell was willing to work for, but Ibanez appears to have offered the Phillies a good deal. Burrell may be worth the $14 million he earned last season with the team, but I suspect he was a going to be more selective than Ibanez, who’s used to making about half the current annual salary of his new contract.

In any event, I think that Phillies fans should be pleased with this signing. Burrell is a valuable player and will likely land a contract with a bigger salary. The team gets to keep Burrell’s production but now has some budget flexibility to add roster depth.