Reading time: 5 – 8 minutes

Buzz Bissinger wrote a post for The New Republic yesterday entitled “Against ‘Moneyball’” in which he attempts to make the case that the Moneyball philosophy is not all it was cracked up to be. His lead off argument is the fact that the teams that are currently still standing – the New York Yankees, the Los Angeles Angels, the Philadelphia Phillies, and the Los Angeles Dodgers – spent a combined $528,620,438 on payroll this year. In Bissinger’s mind that proves that the Moneyball philosophy doesn’t work.  Bissinger suggests that the teams still in the game spent a ton of money to get there and spending money is what you need to do to win the big prize. I don’t disagree with him there. However, I do disagree with his implication that Moneyball has failed because getting to the playoffs and the World Series is still seemingly determined by the size of a team’s payroll.

It occurs to me that at this juncture I should take a brief respite from railing on Bissinger’s post to explain to you non-moneyballers out there what the Moneyball philosophy really is. Essentially the Moneyball philosophy suggests that some players are undervalued because baseball teams and scouts aren’t looking at the right stats.  One of the key stats, as used by Billy Beane in Michael Lewis’ book Moneyball, was on base percentage (or OBP). High OBPs meant players got on base. Beane’s argument was simply this: who cares if they get on base because of a hit or a walk? Good point. Beane found payers with high OBP that didn’t have stellar stats elsewhere on their baseball cards and this helped Beane get these players on the cheap. The high OBP then translated into more wins for Beane’s Oakland A’s than if he had targeted players based on overly exploited stats like batting average.

Now, back to Bissinger’s argument.

In his post in the New Republic, Bissinger seems to be arguing that winning overall pennants will be the only thing that shows Moneyball works. Since Beane, for example, has never won a World Series, has only made the playoffs in two of the last seven seasons and has had teams fall under the .500 mark for the past few seasons shows, in Bissinger’s eyes, that Moneyball doesn’t work.

While I appreciate the heart of Bissinger’s argument – that baseball needs something other than Moneyball (perhaps a salary cap) to right its issue with big spending teams always winning – I think he isn’t looking at the right things.

Sure, we can all agree that Beane, with a $62mm payroll, is probably never going to beat the Yankees, who paid out $201.5mm this year. No hidden stat that can save Beane money on players is going to overcome that. However, I am not sure even Beane himself would suggest that he could get the A’s to the promised land on statistical analysis alone.  All he can do is optimize his wins per dollar spent ratio.

I can’t take credit for thinking of this quick metric.  My Dad suggested it after reading Bissinger’s article.  I went ahead and did the quick analysis per my Dad’s suggestion.  Here is is:

As you can see, I ranked the teams by their “cost per win” from the lowest to the highest. I also kept their payroll ranking (1 being the highest) to the left of the team name so it would be somewhat easier to see the correlation (I would have made a nice visualization of this data but I am simply too tired…).

Let’s look at Beane’s A’s. Not too bad: 26/30 in payroll but 8/30 in cost per win.  That means the A’s are being pretty efficient with their dollars and that is all Moneyball can be expected to help with. (That said, they were not as efficient as they could have been. They should have been somewhere around 4 or 5/30 in cost per win.)

Another missing piece from Bissinger’s article is that once certain stats like OBP begin to be picked up by other teams, as it has been, the effectiveness of those stats to find players at a good value diminishes. In economic terms: the market becomes “efficient” and new stats need to be found to create a new advantage for the team that finds them.

Lastly, I should mention that Bissinger’s argument is partly tied up in giving Lewis’ book a hard time for only focusing on the good things that Moneyball did for the A’s while leaving out a lot of the not-so-great players that the Moneyball philosophy dug up.  Let’s be honest, Lewis is a writer trying to come up with an engaging story and to make a point.  Bissinger should probably realize that no one, even Lewis himself, really expected “Moneyball” to be academically rigorous.

At the end of the day I think Bissinger may just be fed up with the ridiculous uncapped salary situation in Major League Baseball (I am with him there) and he decided to take that frustration out on Moneyball. However, his tough stance on Moneyball is unwarranted. The Moneyball philosophy was never meant to make a small payroll team into a World Series Champion nor did anyone in their right mind think it ever would. It was simply meant to keep the teams that can’t spend the big bucks at least somewhat competitive and it seems to be doing just that.

Side note: I absolutely think the MLB needs a salary cap and fast. The fact that the MLB doesn’t have one is simply ridiculous and it is causing the game to become less fun with each passing year.  Contrast that with the NFL where any team can win on any given Sunday. That is a much more compelling proposition to fans across the country. I mean really, if you are an Oakland A’s fan, why do you even bother getting excited on opening day knowing that you don’t have a chance of winning a pennant? That’s a big problem for the MLB and it will come to a head sooner or later.

Reading time: < 1 minute

2007 World Series Champs.  Enough said.

Reading time: 3 – 4 minutes

Ahhhh yes. My boys are back in the big one. This is almost too much for a Sox fan to handle. After a crazy drought – who was counting, right? – we break the curse in spectacular fashion and a few years later manage to end up in the Series again.

What is interesting this time around is how much new talent we have on the club. While we have always had teams where most of the guys were contributing a lot we’ve never quite had the depth we have today. Opposing teams have no way of knowing who will break out in a given night so they can’t quite nail down a strategy.

Take the Cleveland series for example. Who would have thought J.D. Drew would come up huge and bring us a win? I sure didn’t and I don’t think many citizens of Red Sox Nation did either. In fact, if I recall, most of the Nation was calling for Drew’s head by the end of season since he wasn’t as productive as we all hoped.

Then there is Kevin Youkilis. Sure, he isn’t the typical first baseman in that he doesn’t hit for power a lot but the guy gets on base and makes pitchers work and I thin that’s very important. My uncle has been po-pooing Youk for a while now because he doesn’t hit a ton of homeruns but that is just old baseball thinking. In fact, even he’s now realized the errors of his ways and is a big Youk fan. I am sure his .500+ batting average in the ALCS helped there.

Youk is a great example of the Sox farm system which is one area in which I think we differ significantly from the Yankees. In fact, there were a lot of homegrown guys that came up through the Sox farm club who have contributed a lot to this 2007 team.

Dustin Pedroia – a shoe-in for Rookie of the Year – has to be my favorite of the homegrown talent this year though. I mean the guy is 5′9″ and 180 but he has a huge swing leading to consistent extra base hits that tie in nicely with his outstanding glove. He’s also a scrappy player that does what it takes to get the job done.

All the vets (i.e. Ortiz, Manny and the guys and the pitching staff – how about Beckett!) well, what do I need to say about them. We all know they’re the best of the best and that they play to win.

I am really excited for the guys this year. This time they can go into the Series without the curse hanging over them and simply play the game. For some this will be the first of many World Series (Ellsbury) and for others it will be the end of an era (Schilling) but either way this will be one to remember.

That said I’d like to wish my boys good luck tonight. All of Boston is behind you guys as we have been for over 100 years except this is our time now. We’ve entered the era of the Red Sox. In fact, I would say I’m long on the Sox. Too bad I can’t invest in their success.

Now, if you’ll excuse me I am off to listen to Tessie to get fired up for the game.

Let’s go Red Sox *clapping here* Let’s go Red Sox…

**Next post will get back to your regularly scheduled business and technology musings.

Reading time: 4 – 6 minutes

I was appalled to see this headline in the Boston Herald a couple days ago:

Papi unwitting ‘roid user?

As was Papi himself.

How did that headline come about you ask? Here is the quote that sparked it:

“I tell you, I don’t know too much about steroids, but I started listening about steroids when they started to bring that (expletive) up, and I started realizing and getting to know a little bit about it,” Ortiz said Sunday. “You’ve got to be careful. . . . I used to buy a protein shake in my country. I don’t do that any more because they don’t have the approval for that here, so I know that, so I’m off of buying things at the GNC back in the Dominican (Republic). But it can happen anytime, it can happen. I don’t know. I don’t know if I drank something in my youth, not knowing it.”

Michael Silverman should be ashamed of himself for taking a benign comment and warping into a sensational headline which ended up hurting one of the nicest and greatest Red Sox of all time. Now Papi is saying he may stop talking to the media and that’s a total bummer. It’s not like these guys ever give us groundbreaking insight into the game during post game interviews but Ortiz is a good and fun guy and hearing him talk always reminds you that the game is fun and we shouldn’t forget that.

Hurting an impeccable role model and Bostonian like Papi for no reason is inexcusable but it looks like Silverman got what he wanted. I, along with the rest of Red Sox Nation, are talking about him and his article.

This coincides with some other doping related issues in the cycling arena. Sure, a lot of these guys are guilty as sin which is too bad for the sport. In fact, a lot of smaller races are starting to be cancelled due to lack of sponsors. They are all spooked by the doping scandals of course. The killer here is that the aggressive anti-doping procedures in cycling are very progressive (and good overall) but they are outing a lot of people and hurting the sport. Other sports who probably have similar doping issues are not being as strict so their sports are still thriving while cycling is taking a nose dive.

Most of the problem probably lies in the catty and unprofessional way the doping scandals are handled in the media (ahem – L’Equipe that means you) by the testing labs, anti-doping agencies and media alike. If they could all handle themselves with a bit more tact and professionalism perhaps the sport wouldn’t be taking such a hit.

On that note, I read the article in this months Bicycling Magazine about Floyd Landis and his fight to clear his name. Whether he is guilty of doping on Stage 17 of the 2006 Tour is still up for debate (I think he’s probably innocent or at least I want to believe he is) what seems to be clear is that the test samples were handled improperly and the results of the tests could have been easily affected in a handful of different ways. For the details please check out the info on Floyd’s Fairness Fund website. Bottom Line: the tests are probably inaccurate.

It seems that there should be some ort of anti-doping standard across all sports in order to provide the best attack on doping. It also seems like the testing facilities need to be managed better (i.e. have standards across all testing facilities – in Floyd’s case the French lab that hit him with the doping charge is much less strict in terms of handling samples and has a crummy track record compared to other labs like the one at UCLA).

The facilities should also have regular and unscheduled observation periods in order to keep their credentials. Lastly, the media needs to take a step back and figure out what the real story is and stop trying to sell papers will allegations that are unfounded (of course this gets back to the fact that we judge news in the same way we do entertainment which is worrisome in and of itself).

Will all of this happen? I am not sure but one thing that’s clear is reform is needed across sport, anti-doping agencies and their labs and the media before we can really rid sports of doping while continuing to preserve the sports.

Photo Credit: Waldo Jaquith on Flickr

Reading time: 3 – 4 minutes

I was back in Boston this weekend to visit family and friends and for the yearly ritual my Dad and I have of attending a Yankees v. Red Sox game at Fenway each April. Of course I always knew Fenway was special but now that I have lived outside of Boston for about a year and a half and have subsequently been to many different ballparks in that time I can truly say that the place is special and unique among ball parks. However, I think a lot of what makes Fenway so special is the passion for baseball that my fellow Sox fans exhibit.

We’re die hards. There are a ton of people in the stands who still score the games by hand. There are even more that know every stat you could possibly want to know and, to keep with that theme, the scoreboards at Fenway show very in-depth stats aside from the simple batting average and ERA numbers. This is a baseball town through and through. Here are a few comments and stories from my fellow section mates from Saturday’s game that will illustrate my point.

Guy to my left (affectionately known as peanut guy – we have names for everyone since we’ve been sitting together with them for four years now and this guy always eats peanuts hence the name – its very Seinfeldian) asks me who is warming up for Yankees. I’m not sure so I ask my Dad and the twins who sit on his left. No go. So then we ask scorebook guy (he scores the game by hand of course – I never said these names were creative) at the end of the row and he replies that Farnsworth is warming up for the Yanks. I pass this info to peanut guy who says thanks, composes himself and then yells with all his might:

“Farnsworth, you suck!”

Only at Fenway would someone go to that much trouble to make sure that they had the right name of the opposing teams pitcher so they could properly heckle him.

Here’s another one: There’s a Yankee at 2nd base and the ball is hit to Cora at short. The runner proceeds back to second and Cora should get the sure out at first. Instead he thinks he’s smarter than the average little leaguer and tries to throw out the runner heading back to second which ends with the ball heading into the outfield and a Yankee on 1st and 3rd. This is in the second inning mind you. Then a guy a couple rows behind us stands up and starts to yell/rant:

“That’s little league 101. You have to go for the sure out. What were you thinking? How could you….”

This goes on for about 2 minutes until he finally yells:

“OK, I’m done now!”

and proceeds to sit down. Too funny.

The last situation came out of a good shift that the Red Sox had on to protect against the bunt. Youkilis moved in and Pedroia shifted to cover 1st. Basic stuff. As the shift is happening peanut guy’s friend proceeds to talk to peanut guy about their softball team:

“Hey man we really need to get that type of stuff worked into our team strategy. We could win a ton more games with smart moves like that. We have to be doing that type of sh*t.”

And it went on from there. Gotta love it.

Fenway is a magical place and I love going back there year after year especially when the Red Sox sweep the Yanks. Go Sox!

Reading time: 3 – 5 minutes

Slacker Music Player: Is it the iPod killer?

Heard about a new music service called Slacker the other day. This is a music service I can get into. Basically, the service works like Last.fm or Pandora but it is not only a web based service. They also have devices that are satellite fed which allow for a portable version of “your station.” You customize your station by using the “love it” and “ban it” features (much like Pandora’s thumbs up and thumbs down approach). As you put more input into Slacker it will keep looking for music you might like based on what you’ve told it (it doesn’t not analyze the music itself like Pandora though). From VentureBeat:

Slacker is so named because it is designed for the estimated 70 percent of people who like music, but who can’t be bothered to constantly update their playlists.

I have to believe that stat is close to true. I love music but I despise scrolling through my giant list of music on iTunes and my iPod for something I want to listen to. More often than not I leave both on shuffle but this does not help me find new music of course. For more detail on Slaker check out the VentureBeat post.

Side note: If XM/Sirius start to offer this type of service Slacker will have a tough time competing.

Failing Cheap

Josh Kopelman put out another great post recently. This time he tackled the difference between the funding cycles of companies “this time around” versus back in the 1999 – 2000 time frame. I won’t be able to do this post justice in just one paragraph so please go read it. Josh made some nice graphs as well which are worth the trip to his site alone.

Bill James is Smart

Chad Finn has a nice analysis of Bill James’ predictions for the 2007 Red Sox and he starts off the piece with how right James was last year about Youkilis’ performance. It’s eerie.

VC Performance by Quartile and Vintage Year

Paul Kedrosky has a quick analysis and nice graph of VC performance data by quartile and vintage year. I especially like this post since the data comes from my prior employer Cambridge Associates. I worked on the team that was responsible for, among a lot of other things, the VC and PE performance data and benchmarks. Nice work guys!

The Funded

I caught a VentureBeat post about a new site called simply “The Funded” the other day. The basic gist of the site is that it lets its’ members rate VC firms and these ratings are then made public on the site. However, not just anyone can become a member. VentureBeat explains:

… you can’t be a member if you are partner or an agent of a firm. Also, you can only become a member if you are invited by another member or somehow convince TheFunded that you should be a member.

Looks like they have some decent controls in place but I would like to see, as would VentureBeat, some sort of disclosure as to whether or not the entrepreneur making the comments or adding the ratings was rejected by the VC firm(s) in question. This is hard to do of course since most rejections are oral and, to make matters worse, are usually cryptic (the old I didn’t say no specifically in case I want to invest down the road issue). There aren’t a ton of reviews on The Funded now but over time I figure there will be more contributors. In any case it is a really great idea and could be very useful to entrepreneurs.

Reading time: 2 – 4 minutes

MLB Advanced Media continues to make me look stupid for praising their brilliant moves in new media (i.e. showing baseball and other sports online for a fee). First, they went after slingbox and effectively said that people should have to pay twice for content. Now, they (along with the MLBPA) think that baseball players names and historical statistics should be copyrightable. Their main gripe is that there are fantasy baseball leagues who profit from the use of player names and stats by charging users to use their fantasy baseball services. Apparently MLBAM thinks they should a) get a cut of this money or b) wall the information off and only allow MLBAM’s Fantasy League product or c) a combination of a and b.

Thank God that the courts are actually sane. They have said that MLBAM can’t halt the use of player names and stats. The court elaborated by saying that even if the players have claimed right of publicity, the First Amendment takes precedence over such a right. Of course MLBAM has appealed the ruling so I am sure this will be dragged out for a while. In the meantime it is interesting to speculate on what MLBAM (and the MLBPA) thinks they are doing by trying to place a wall around player data and names.

I am sure MLBAM thinks that they are just protecting “their property” and that others should not be able to make money from using this information. However, what they are doing is alienating their most loyal fans. Those fans are the ones that live and die by their fantasy leagues and are constantly watching games and checking stats. The MLB has already alienated a lot of casual fans with the salary inequities and strikes. They can’t afford to lose the diehards. Fortunately for them, the diehards won’t go away easily (myself included). They will go eventually though or at least start moving away from the MLB to other forms of baseball. MLBAM really needs to realize that it only benefits them to have the stats and player name data out there and available to fans. Until they do they will continue to upset fans with their moves to make America’s pastime property of MLB.

Origin of the title: Click here to see where the long standing internet joke came from that spawned the title for this post. If you really like the joke you can check out the obligatory cafe press store someone set up and get some schwag.