August 25, 2010
The MLB Leaks: Can Greed Be Good?

For any sports econ nerds out there, this has been a big week. The always-popular sports blog Deadspin got their paws on a mountain of leaked financial data from the Tampa Bay Rays, Pittsburgh Pirates, Texas Rangers, LA Angels, Florida Marlins, and Seattle Mariners. In a Wikileaks-like move, they posted those documents online to give everyone a detailed look behind the curtain of baseball finance.

What do the statements prove? In short, that baseball is a lot more profitable than the league and the owners would like the public to believe—even for clubs that are losing a lot of baseball games and in turn, a lot of gate receipts.

If you’d like a window into how this is happening, I happen to have scoured the internet to find an excellent resource written exactly 1 year ago on this same topic. For a more detailed, wonkish breakout of the situation, I also highly recommend the ongoing series by The Biz of Baseball (starting here).

I’m not going to spend a ton of time sussing out the various financial realities because both Deadspin and The Biz of Baseball—along with numerous articles by the hometown papers of each franchise, which you can find links to in both of the above—do a much better job.

What I want to focus on instead is this question:  now that we can be pretty sure that the Dolans are indeed turning a healthy profit on a losing team, should we really give a damn?

I say that we can be almost certain because of the documents leaked on the Pirates. Pittsburgh’s MLB franchise is of course a crap team in a similar-sized market with similar demographics which also has made the decision in recent years to consistently trade away their best and highest paid/arbitration-eligible players for prospects and cash savings. Any of this sound familiar?

In 2007, the Pirates finished in last place with a record of 68-94…and according to the leaked documents, they scored a net income of $15M. In 2008, they defended their last place title by going 67-95…and earned a net income of $14M in the process.

In light of all this, it’s foolish to believe that the Tribe lost somewhere between $12-16MM this past season, as Larry Dolan famously claimed. In fact, it seems probable that their own profits were similar to those of the Pirates’ ownership group.

Again, though, the question is whether or not this really matters.

First off, no one should ever assume that anyone important or rich enough to be worthy of an interview is publicly telling the truth about anything. So if these financial realities somehow make you feel betrayed by the Dolans’ cries of poverty, that’s really your own fault for being gullible. As I’ve said before, running a pro sports franchise is a business, not a charity. If the owners were actually getting killed financially, they’d sell the team. Period. The fact that it’s so difficult to buy a franchise in any sport tells you basically everything you need to know about their profitability.

I imagine that most Indians’ fans wouldn’t react negatively based on moral principle, though. If anything, the most popular gripe seems to be that if ownership is printing money off the poor performance of the team, they owe it to the fans to be pumping that money back into the roster to try to improve it—specifically in regard to re-signing their best players and chasing free agents.

The problem with this viewpoint is that it’s not a smart way to operate a mid-market MLB team. Profitable as the club may be, Cleveland is never going to be in the same league as the Yankees, Red Sox, and Phillies. They can’t succeed on the same business model that those chipped-up major-market east coast teams do.

Consider this: if we assume that the Indians netted $29MM in 2007-8 like the Pirates did, all but $8.5MM of that would’ve gone to pay Kerry Wood for his services in 2008-9. Or, another way of looking at it:  the Yankees signed CC Sabathia for 6 years at $140MM, or an average of $23,333,333 per. Was he enough to make the Indians competitive in 2008? Uh, no. At that rate, it’s impossible to argue that he would’ve been anything other than a catastrophe for the team, considering that his contract would’ve put them $17.5MM in the red had all other factors remained the same. And considering that one great pitcher can’t pull an entire team into contention if the rest of the roster is deficient, that seems like a solid assumption to make.

As we’ve argued again and again in the past year, the Tribe needs to spend intelligently, not profusely. Throwing a bunch of money at the problem is far from a solution (see also: Browns, Cleveland, 2008-9). Instead, the only way for them to compete is to stock the farm system with low-priced developmental talent. So if the organization wants to spend money to make the team better, they should pump it into the scouting department. Assuming they get the right types of people to join up, the Dolans’ per-dollar return on that investment is going to be far greater than any they can make on the free agent market.

If you want proof of this, just look at one of the other teams involved in the MLB financial leaks: Tampa Bay. The Rays netted a cool $11MM in 2007 en route to a pathetic 66-96 record. This seeming failure was the final year of the exact same strategy I’m suggesting for the Indians. The following season, the Rays won 97 games and made the World Series. After falling back to Earth a bit in 2009, they are now in 1st place in the AL East and look like they’re poised to compete for years to come.

Did it suck to be a Tampa fan while they slowly built that roster of young players in the several seasons leading up to 2007? I’m sure. Did ownership likely endure the same kinds of pitchfork-and-torches threats from the public as Cleveland ownership has been subject to since 2008? Probably. But instead of caving to fan pressure and doing something stupid, Tampa stuck to the business model that had made their in-state buddies the Florida Marlins two-time World Series champs. Now their fans are thanking them for it.

So it is with the Indians. If we avoid the knee-jerk reaction that it’s offensive and evil for the owners to make a significant profit off of a bottom-feeding team, it becomes clear that the Dolans and the front office—again, assuming the comparisons I’m drawing are accurate—are doing the right thing. So don’t be fooled by the financials alone. If the team is being bolstered in the savviest ways rather than just the most expensive, what’s perceived as the Dolans’ greed can, in fact, be good for us all.

However, if they blow this, I promise I’ll be first in line at the hardware store for the pitchfork and torch sale.

-T

12:27am  |   URL: http://www.josemesaisdead.com/post/1007792588/the-mlb-leaks-can-greed-be-good
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FILED UNDER: MLB Economics Indians Tribe 
August 11, 2010
Carlos Santana: Catch Me If You Can(?)

I very rarely write about the Indians since I almost never get a chance to watch their games out here on the west coast. But last week ESPN’s Buster Olney blogged about whether modern attitudes toward blocking the plate have changed in light of injuries like the one suffered by Santana in Boston. I thought it was an interesting question. (I’ll link to the post here, but unless you have ESPN Insider, it won’t do you any good.)

For those of you who can’t or don’t want to read Olney’s post, the essence of it is that the GMs he spoke to in both leagues mostly agreed that it’s not worth it anymore. At least, not in the case of a guy like Santana, who’s your everyday catcher, arguably a franchise player, and someone whose bat you need every game.

However, I’ve also heard other people argue that this incident speaks to a larger problem—that Santana was behind the dish to begin with. Since the injury, multiple analysts (of admittedly varying caliber) have suggested that when he comes back next year, Santana should be moved to either first base or DH.

This raises a very simple question:  how good a defensive catcher is Santana? I’m all for protecting a potential franchise player, but if part of the reason he’s a potential franchise player is that he’s a good or great defender, moving him out of his natural position (and possibly out of the field entirely) seems like a bone-head solution.

Keeping in mind that we’re talking about a total of only 40 games—in his rookie year, as well—I’ve compiled some relevant defensive stats for Santana below. Before looking at that, though, here’s a description of what these statistics mean:

Fielding %: A simple stat calculated by dividing the number of cleanly fielded opportunities by total opportunities for a putout.

Rdrs: Defensive Runs Saved Above Average. An aggregate stat meant to provide an overall defensive rating. In short, how many total runs does the opponent NOT score thanks to your player’s defensive prowess that they would score against an average player at the same position?

Rdrs / yr: Defensive Runs Saved Above Average per 1,200 Innings (~135 games). A version of the previous stat improved by standardizing for the number of innings played.  To relate to basketball terms, Rdrs / yr is equivalent in a way to “per 36 minute” stats. In other words, if everyone played the same number of innings, how would they rate? In this stat, a back-up defensive specialist would rate better than a poor-fielding everyday player, even though the everyday player might look better in unadjusted Rdrs simply because he plays so many more innings than the back-up.

Rf/9: Range Factor per 9 Innings. Calculated as 9 * (Putouts + assists) / innings played. A more informed alternative to Fielding % developed by sabermetrics godfather Bill James. The idea here is that by calculating the total number of outs in which a player participates, you get a much better picture of how much ground the defensive player covers per 9 innings. 

For instance,  say you have a 350 lb catcher. He fields every ball cleanly, but only if the ball stops rolling within 6 inches of the plate. He only makes one play all year. His Fielding % is 1.000. On the other hand, a catcher with superhero agility gets to everything within 50 ft of home plate. He gets to 100 balls in a season, but makes two errors. His Fielding % is .980. Is the 350 lb catcher really a better defender? No, but only Range Factor would tell you that.

CS%: “Caught Stealing” percentage. A simple stat calculated by dividing the number of base-runners thrown out by the total number of steals attempted against a given catcher.

OK, with the mini-glossary out of the way, let’s see how our man Santana was doing in these categories during his 40 games. The number to the right of the vertical bar is the league average for catchers.

CARLOS SANTANA VS. LEAGUE AVERAGE - 2010 DEFENSIVE STATS

Fielding %: .989 | .991

Rdrs : 1 | N/A

Rdrs/yr: 4 | N/A

Rf/9: 7.07 | 7.40

Rf/G: 6.68 | 7.31

CS%: .353 | N/A

Since we don’t have league averages for half the stats we want to examine, let’s look at how Santana rates against last year’s AL Gold Glove catcher. I’ve included the 2009 league average stats where applicable:

JOE MAUER VS. LEAGUE AVERAGE - 2009 DEFENSIVE STATS

Fielding %: .996 | .992

Rdrs : 3

Rdrs/yr: 4

Rf/9: 7.24 | 7.48

Rf/G: 6.93 | 7.39

CS%: .260

What does this tell us? Well, for one thing, that the AL Gold Glove probably went to the wrong catcher last year. Mauer’s Fielding % was above average, but that’s about the only elite level qualification he had defensively—and even there we have to move to the third decimal place to see a difference. A 26% caught stealing rate isn’t scaring too many base-runners either, though I suppose CS% may not factor into Gold Glove consideration.

That said, while both 2009 Mauer and 2010 Santana were below average in Rf/9 and Rf/G for catchers, Santana was further below average in both categories (-.09 further below league average in Rf/9 and -.17 further below league average in Rf/G). However, Santana threw out a much higher percentage (+9%) of would-be base-thieves and was on pace to match Mauer in Rdrs / yr.

But considering the reality of Mauer’s numbers, we should compare Santana to 2009’s league leaders in each category if we want to get a more accurate picture of his skill level:

2010 SANTANA VS. 2009 A.L. LEADERS - DEFENSIVE STATS

Fielding %: .989 | .997 - Gerald Laird (DET)

Rdrs : N/A (Baseball Reference doesn’t break out league leaders for this)

Rdrs/yr: N/A (ditto)

Rf/9: 7.07 | 8.70 - Jason Varitek (BOS)

Rf/G: 6.68 | 8.27 - Jason Varitek (BOS)

CS%: .353 |.537 - Kenji Johjima (SEA)

Based on the above, there’s not a strong statistical argument for keeping Santana behind the plate next year.  He was inferior to last year’s AL leaders in every category for which I can find a rating, and noticeably below this season’s league average in half of the them.

That said, we should keep in mind that we’re dealing with a rookie who caught for 25% of a full season. Projecting Santana’s entire career behind the plate based on this sampling is ludicrous. The most important thing is that in order for us all to know for sure, he should quit sticking his leg into the base path to save one run in a meaningless game in August. Especially since the comparison of his defensive numbers to Joe Mauer’s suggests that Santana could be an MVP candidate if his bat comes through (in a major way) for the Tribe. Whether or not it would be deserved is a question to consider in another post. Hopefully we have a good reason to write it in a year or two.

-T

11:00pm  |   URL: http://www.josemesaisdead.com/post/940900334/carlos-santana-catch-me-if-you-can
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FILED UNDER: Carlos Santana Indians Cleveland Tribe Stats MLB 
July 19, 2010
The Spotlight Turns

This is my least favorite part of the year from a sporting standpoint.

Not only are the NBA playoffs long gone, but the exciting aspect of free agency is in the rear view miror, too. Regular season baseball holds no draw whatsoever for me (at least, as an Indians’ fan). Football season is still two months off.

In fact, I was in a sports bar on Saturday night and the only coverage running on TV was of the British Open and Summer League basketball. Yikes.

I bring this up because, in a way, it highlights the state of the average Cleveland fan. With LeBron gone, many seem to think, what the hell do we do now?

Now, as I’ve written recently, practically everyone is underestimating the quality of the Cavs’ roster James left behind. They’ve already been written off as, if not a lottery team, certainly a team that won’t so much as sniff the 8th seed in the East. I disagree with this, but perception is reality.

Despite a recent surge, the Indians are still an ocean away from competing in the Central division. Carlos Santana has added some small bit of intrigue, but facts are facts. The Tribe is 12.5 games behind the White Sox, with both the Twins and Tigers only 1.5 games out of first themselves. It’s not impossible the team could get back into the race, but at this point it seems unlikely.

This leaves the Browns.

Energized by Mike Holmgren’s presence, some notable (if dubious) off-season moves, and a hold-over effect from the 4-game winning streak on which they rode out the 2009 season, the Browns have become the city’s undisputed sports focal point. 

That said, no one (fans or pundits) seems to believe the 2010 Browns will be better than .500, and even that may be a near-miracle.

For now, though, they are once again the great hope.

This raises a semi-interesting question about expectation.

In my opinion, the Browns have enjoyed somewhat of an irrational golden age in the court of public opinion for the past several years. You can tell me that attendance was dramatically down this past season. That’s true. You could tell me that Browns fans have had no lack of venom to spew about the team, the coaching staff, the organization as a whole. That’s true too. 

But I would argue that it’s also true that while in or near season, they’ve still dominated the sports discussion in the city.

More importantly, they’ve done this despite the fact that, by any measure, they have sucked all but two years since the franchise reboot.

Since that time, the burden of being THE team in Cleveland expected to win has seldom been on them. The Indians won at least 90 games per season from 1999-2001. The Cavs lucked into LeBron James in the summer of 2003. Appropriately enough, the Browns went 9-7 and made the playoffs in 2002.

Obviously, the Cavs weren’t expected to immediately shoot into title contention after the 2003 draft. But the mere hope and excitement around having the home-town phenom on OUR team, for once, may have been enough to keep people satisfied for a time—especially when the Cavs won 18 more games in 2003-4, barely missed the playoffs the season after, and then grew into a perennial playoff team and seeming powerhouse until, oh, about two weeks ago.

During that time, Clevelanders could look to the Browns as a favored son, partially because the hope for winning could be largely satisfied by someone else.  In the years immediately after the Browns’ return, it was the Indians. Since 2003, it’s largely been the Cavs.

Now, though, the spotlight has squarely turned back to Berea.

Some historical perspective comes into play here, too. Since the Cavs completed the pro triumvirate in Cleveland with their inaugural 1970 season, there have only been 5 years out of a possible 40 where multiple of the city’s franchises have been competitive at once.

The only time that all three have been simultaneously good was 1994. The ‘93-94 Cavs got into the playoffs on a 47-35 record, but lost in the opening round; the ‘94 Browns went 11-5 and were hammered by the Steelers in the Divisional round of the post-season; and the ‘94 Indians were 66-47 when the lock-out crashed the rest of the season.

Aside from that magical year, the Cavs and Browns were both playoff teams in 1989 & 1990. The Cavs and Tribe were both playoff teams in 1985 & 1998.

That’s it.

The point? Almost invariably, there has only ever been one of the three teams “worth” following, i.e. if you define value in terms of the expectation that the team can truly compete week after week.

With James gone and the Cavs likely to embark on a longer-term rebuilding process, the weight falls once again on the shoulders of Randy Lerner’s team. I suspect this has already magnified the intensity of the pressure the organization feels.

They can no longer be the puppy that everyone loves, despite that it keeps whizzing on the carpet. For the first time in a long time, they are going to be expected to produce for the city.

Starting in about two months, we’ll all find out whether they’ve righted the ship just in time to shoulder the load. If not, it could be a long year for any Cleveland fan who isn’t willing to take the long view.

-T

10:00pm  |   URL: http://www.josemesaisdead.com/post/834990684/the-spotlight-turns
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FILED UNDER: Cleveland Browns Cavaliers Indians Tribe Holmgren LeBron James