Billy Beane and the resource curse

Benjamin Morris posted a good analysis of the value of Billy Beane over at FiveThirtyEight.

To be conservative, let’s just look at the period since Henry made Beane his offer: In the last 12 years, the Red Sox spent $1.714 billion on payroll, while the A’s spent $736 million. We can then break down what it could have looked like if Beane had worked for the Red Sox like so:

  • Let’s say it would have cost Boston the same $736 million that it cost Oakland to get the A’s performance with Beane.
  • At the hypothetical $25 million-per-year salary I suggested earlier, Beane would have cost the Red Sox another $300 million. (It’s possible that Beane would have wanted more, but it’s even more possible that they could have gotten him for less.)
  • The difference in performance between the A’s and the Red Sox over that period (where the Sox were as successful as at any point in the franchise’s history, and the A’s were supposedly stagnating after Beane’s early success) has been about 50 games for Boston. Since we don’t know exactly how good Beane would be at procuring additional wins above his Oakland performance, let’s assume that the Red Sox would have had to pay the typical amount teams have paid for wins in the period to make up the difference. According to the year-by-year price of wins from my calculations above, those 50 wins (taking when they happened into account) would have a market value of about $370 million (though this might have been lower with Beane in charge).

If we combine these — the price of the A’s performance ($736 million) plus Super-Expensive-Billy-Beane’s salary ($300 million) plus the additional 50 Red Sox wins at high market estimates ($370 million) – merely duplicating their previous level of success still would have saved the Red Sox more than $300 million relative to what they actually spent, and that’s with reasonably conservative assumptions. That’s money they could have pocketed, or spent making themselves even better.

Management and ownership are undervalued in sports (though ownership's compensation should include the equity value of the franchise which usually outweighs salary by a lot; it's just that ownership often selects management so they have a ripple effect on franchise competitiveness). It's the reason I have a Cubs jersey with “Epstein” on the back as my profile pic on Facebook. I consider the hiring of Theo Epstein as the Cubs President of Baseball Operations the single most important Cubs hire in my lifetime as a long-suffering Cubs fan, far outweighing the value of any single player. Forget all talk about curses; the Cubs have just been so badly run for so long that even random luck hasn't been enough to deliver a World Series title in over a century.

In December of 2012, Bill Barnwell did a great piece on how Jim Harbaugh was the most undervalued asset in pro football, and in his annual ranking of trade value in the NFL for the year ahead Barnwell still had Harbaugh ranked 49th, the only coach to appear in his top 50 list. Harbaugh certainly turned around the Stanford football program.

Whether it's Beane or Epstein or Harbaugh, of course it's not just their influence but the staff they bring in that matters, too. But that's one thing about bringing in someone like that: their ability to hire great people or bring past teammates with them is one of the keys to their value. Epstein brought in Jed Hoyer and Jason McLeod and countless other people whose names aren't public but who've given the Cubs, in a few short years, the best farm system in baseball. The mantra with the Cubs has always been "wait til next year" but now it feels more like “can't wait til next year.”

The longer I'm a sports fan, the more I think the most important thing if you're loyal to a sports team is quality ownership. In some sports, more football and basketball than baseball, a good manager or coach matters, too. Baseball being a series of individual confrontations, the tactical value of a good manager is less there than that of a coach in basketball or football.

The hypothetical question of how Billy Beane would have done with the Red Sox is an interesting one. On the one hand, as Morris notes, Beane has done a ton with less in Oakland. On the other hand is the well-known phenomenon called the resource curse.

The resource curse, also known as the paradox of plenty, refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy, a phenomenon known as Dutch disease), volatility of revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities).


Sports has its own version of the resource curse, and even Epstein, who delivered the Red Sox their first World Series in ages, ran into it late in his tenure there, signing a ton of expensive free agents like Carl Crawford. Beane would have had a much larger payroll in Boston, and that might have had him chasing more big name free agents rather than searching for inefficiencies as he has had to with the A's.

Or so the theory goes. Readers here know I'm wary of extrapolating phenomenon across boundaries, of the temptation of metaphor, and taking the resource curse, which is often used to discuss countries with rich oil supplies, and applying it to wealthier teams in baseball draws my immediate suspicion.

What's happening in baseball is that teams are smarter about locking up players for their prime years. In baseball, players become eligible for arbitration after three years of MLB service, and they become free agents after 6 years of service in the major leagues. However, teams can sign players to contracts that lock the player up for their first few years of free agency, as well, and more and more teams are doing so for their star homegrown players to secure more of their highest productivity years. This means rich teams like the Yankees can swoop in and buy with a fat contract are older and further into their career. Older players are more likely to be on the downside of the careers or to suffer injuries. Thus what appears to be a resource curse in baseball, as noted in the ESPN article I linked to above, may just be a temporary phenomenon.

The genius of Greg Maddux

Growing up a Cubs fan, Greg Maddux was my favorite Cub ever, and the day Larry Himes let Maddux slip away as a free agent to the Atlanta Braves over a few million dollars remains one of the great stains on a heavily bloodied Cubs flag. I was so angry I sulked for weeks like a child whose parents have divorced.

One of the reasons I loved watching Maddux pitch was how unconventional his style was. Standing just 6'0" and weighing only 170 lbs, he didn't throw hard, and perhaps none of his pitches would be graded by scouts as an 80 (though his changeup was exceptional). His greatest strengths were his brain and his poise.

Many stories have been written about his understanding of both pitching and the hitters he was facing, but a recent article by Thomas Boswell in the Washington Post pinpoints a fascinating insight that might hold the secret to his mastery.

First, Maddux was convinced no hitter could tell the speed of a pitch with any meaningful accuracy. To demonstrate, he pointed at a road a quarter-mile away and said it was impossible to tell if a car was going 55, 65 or 75 mph unless there was another car nearby to offer a point of reference.

“You just can’t do it,” he said. Sometimes hitters can pick up differences in spin. They can identify pitches if there are different releases points or if a curveball starts with an upward hump as it leaves the pitcher’s hand. But if a pitcher can change speeds, every hitter is helpless, limited by human vision.

“Except,” Maddux said, “for that [expletive] Tony Gwynn.”

Because of this inherent ineradicable flaw in hitters, Maddux’s main goal was to “make all of my pitches look like a column of milk coming toward home plate.” Every pitch should look as close to every other as possible, all part of that “column of milk.” He honed the same release point, the same look, to all his pitches, so there was less way to know its speed — like fastball 92 mph, slider 84, change-up 76.


From reading The Sports Gene by David Epstein earlier last year, I learned that much of what a professional baseball hitter does is predicated on being able to read the motion of the pitcher and the rotation of the baseball. It's why major league hitters flailed helplessly against Olympic women's softball pitcher Jennie Finch despite the fact that her pitches reached home plate in the same amount of time as major league pitches and came with the larger hittable surface area of a softball.

It seemed that Maddux knew that long before the studies mentioned in Epstein's book. Amazing. But that's not all.

Then he explained that I couldn’t tell his pitches apart because his goal was late quick break, not big impressive break. The bigger the break, the sooner the ball must start to swerve and the more milliseconds the hitter has to react; the later the break, the less reaction time. Deny the batter as much information — speed or type of last-instant deviation — until it is almost too late.

But not entirely too late: Maddux didn’t want swings and misses for strikeouts, but preferred weak defensive contact and easy outs. He sought pitches that looked hittable and identical — getting the hitter to commit to swing — but weren’t. Any pitch that didn’t conform to this, even if it looked good, was scrapped as inefficient.


It's another secret of pitching that he seemed to have understood long before others: the batter must commit to swinging or not before a major league pitch has made it halfway to the plate, so after a certain point any unanticipated break in that pitch is not something the batter can react to. On TV, his sinking fastball with armside tailing action was a thing of beauty to watch, like spherical frisbee that always toppled to one side, but to the batter it must have been even more infuriating, like trying to swat a fly with chopstick.

Maddux was so good at inducing the weak contact he discussed above that he had a stat named after him: a Maddux is a complete game shutout requiring no more than 99 pitches.

Let's hope he writes a book about pitching someday, the pitching version of Ted Williams famous tome on hitting.