Moneyball: The Art of Winning an Unfair Game
By Michael Lewis, W.W. Norton & Company, 288 pages, $24.95
Back in 1922, the U.S. Supreme Court, in its infinite wisdom, declared that Major League Baseball was not involved in interstate commerce and, hence, was exempt from federal antitrust laws. In 1952 and 1972 the Court reaffirmed this judgment, and, as a result, baseball remains an unregulated, legal monopoly. This immunity from the normal discipline of the marketplace has bred managerial arrogance, laxity and inefficiency. Michael Lewis' new book, Moneyball: The Art of Winning an Unfair Game, shows us one more way this has been true.
Lewis tells the story of how the Oakland Athletics, on a shoestring budget, have become a successful team. The basic message is that baseball's front offices have been so woefully ineffective and wasteful that a grain of common sense and rudimentary analysis can yield a winning team, even with a low payroll.
According to Lewis, until A's General Manager Sandy Alderson discovered the work of Bill James and other sabermetricians in the mid-1990s, baseball's system of player development, selection and strategy was based on hackneyed folklore. For instance, basic statistical analysis shows that on-base percentage (hits plus walks divided by at bats) is a far more important offensive category than batting average alone or slugging percentage (which gives two points for a double, three for a triple and so on), yet most general managers paid little attention to it. Similarly, the standard fielding percentage is a poor measure of defensive performance because it only records putouts, assists and errors on balls that the fielder reaches, giving no credit to a fielder with greater range or better positioning instincts.
Armed with a fresh data arsenal and limited by a diminutive budget, Alderson created a new baseball culture in the A's front office and promoted a contrarian philosophy. He hired and schooled Billy Beane in the new system, which Beane, along with his hired hands from Harvard, developed further. Beane added some personal touches, and -- voila! -- the A's found a way to win with little money.
Lewis' story is fascinating and certainly tells part of the truth. But Lewis also gets carried away with his thesis at points, gets confused at others and misinforms at still others. (For example, not all minor leaguers are under reserve for seven years, Jason Grimsley does not throw 96-mph fastballs and the players' union did not create the blue-ribbon panel on baseball economics.)
After arguing for chapters that Beane's system is based on an exhaustive absorption and interpretation of statistics and then stating that one of Beane's five basic rules is, "Know exactly what every player in baseball is worth to you. You can put a dollar figure on it," Lewis tells us that "[Beane's] approach to the market for baseball players [is] by its nature unsystematic." Either there is a system or there isn't; Lewis can't have it both ways. It's also not clear whether Beane's math has much to do with the A's success over the last three years -- for example, none of his top picks in the 2002 amateur draft, which Lewis describes in approving detail, has yet panned out.
Lewis implies that if the lowly A's can be so successful, money imbalances among teams don't really matter. Surely good management is important, but you have to be daydreaming in the outfield not to realize that a team's chances of winning are greatly increased by doubling or tripling its payroll (think Yankees). The statistical relationship between payroll and winning percentage has been significant at the 1-percent level every year since 1994. Moreover, as more and more teams apply the appreciable insights of James and others, the early advantage attained by Alderson and Beane will fade. Contrarianism does not work so well when the majority adopts it. In the end, a synthesis of past and present systems of player evaluation likely will emerge.
So, Moneyball is imperfect. But it's a good read and it offers a revealing look at an important side of baseball's business.
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