What is Next for Moneyball Philosophy?(Daryll)

When the book Moneyball by Michael Lewis came out in 2003, it illuminated what Billy Beane had been doing in Oakland in helping a small market team with less money than everyone else make the playoffs in consecutive years and at one point even win 20 games in a row.

Moneyball operated on a simple premise: read into the numbers and don’t just do what decades of baseball people have done before. As fictional A’s assistant but modeled mostly after Paul Depodesta Peter Brand explains to Billy Beane in the movie, “There is an epidemic failure within the game to understand what is really happening. And this leads people who run Major League Baseball teams to misjudge their players and mismanage their teams.”

Billy Beane took that idea, and ran with it. He moved a washed up catcher Scott Hatteburg who had never before played first base and had him play first base:

Billy Beane: It’s not that hard, Scott. Tell him, Wash.
Ron Washington: It’s incredibly hard.

Teams eventually jumped on the idea, even Red Sox Owner John Henry who had the money that Beane didn’t but still took the ideas after failing to trade for Beane himself. He hired Yale grad Theo Epstein to be his GM, brought on Bill James who was the forefather of baseball sabermetrics to begin with, and lead the Red Sox to win the World Series for the first time since 1918 in 2004 and 2007 not with superstars per se, but with on base percentage guys and a small band of self-dubbed idiots. Yes, David Ortiz, Curt Schilling and Johnny Damon helped.

Soon stereotypes emerged about what Moneyball was all about. Like any new, crazy idea, people wanted to put it in familiar boxes. It got boiled down to the idea of on-base percentage and walks over batting average, don’t steal bases or sacrifice bunt, and closers are over-rated. This led people to jeer whenever the A’s got kicked out of the playoffs, “Ha! You had a runner on first and couldn’t get him over to score…moneyball can’t save you now!”

While the old guard of baseball was slow to accept Moneyball ideas and saber metrics which Bill James had been championing for years, the teams that did kept on winning games until the ideas became entrenched in baseball culture.

Richard Thaler and Cass Sunstein wrote in their 2003 review about the broader scope of what Moneyball brought to the table: “Those lessons have to do, above all, with the limits of human rationality and the efficiency of labor markets. If Lewis is right about the blunders and the confusions of those who run baseball teams, then his tale has a lot to tell us about blunders and confusions in many other domains.”

While some were ready to call Moneyball-osophy a failure, others kept improving on the ideas of James and Beane. Then Tampa Bay Rays Manager Joe Maddon started using defensive shifts and studying defensive efficiency as the next chapter in Moneyball based changes. The Rays took the next step in baseball front office revolution as they found The Extra 2% as described by Jonah Keri in another good read and used the baseball labor markets in signing players to extensions, locking up young players and trading over-valued commodities like closers and starting pitchers nearing free agency like David Price.

Theo went to the Chicago Cubs who hadn’t won a World Series since 1908 and using everything at his disposal: purposely fielding a poor team to get higher drafts like Kris Bryant, bringing in cheap under-valued veterans, striking gold in player development with Jake Arrieta and Anthony Rizzo, and going for the jugular when he brought in Joe Maddon to start the 2015 season. It worked out exactly how it was supposed to, making it to the NLCS in 2015 before winning it all in 2016 and poised to be a juggernaut for the rest of the decade.

What is next?

If you looked at the free agency market this winter, you would say relief pitching. Last year in the playoffs the Indians Andrew Miller and the Cubs Aroldis Chapman dominated the storylines as the Orioles Zack Britton did just as much for not being used.

In that vein teams shelled out big contracts for Mark Melancon, Chapman, Kenley Jansen and Brett Cecil. I’m not saying these pitchers will not serve their teams well, but I do think teams will start re-thinking who to sign as relievers and how to use them. With the extra focus on the relief market keep an eye on what teams are doing in other areas of the market behind the scenes. With extra focus comes forced innovation. Clearly teams are being biased by recent history on the over-investment in relief while the A’s and others might be able to forge ahead in unforeseen areas.

Indians Manager Terry Francona got a lot of credit for how he used his relievers in the 2016 playoffs, and I believe that can be exploited next. Is that good – or like the genesis that Moneyball started should the rest of the baseball world zag when everyone else is zigging?

As Michael Lewis writes in the preface of his new book The Undoing Project, “I’m sure some of the criticism of people who claim to be using data to find knowledge, and to exploit inefficiencies in their industries, has some truth to it…this hunger for an expert who knows things with certainty, even when certainty is not possible – has a talent for hanging around. It’s like a movie monster that’s meant to have been killed but is somehow always alive for the final act.” His new book takes a look at a pair of Israeli psychologists who studied the ideas of human decision making back in the 1960’s that basically predicted what James/Beane/Lewis discovered about the A’s in the early 2000’s! Truly history can be used to teach us about the future.

The Red Sox in 2016 fired their more saber metric minded front office and brought in Dave Dombrowski, known for big trades and action. Not for signing a back-up second baseman with a higher UZR and WAR than the other guy. He is remaking the Red Sox by bringing in David Price and Chris Sale and paying good money for it. While good baseball players will always provide value to their teams, let us not forget that it was still just 2015 that the Kansas City Royals won the World Series with a middling payroll themselves.

The immediate lessons that Moneyball taught us have changed in the 13 years since it’s writing, but the main message remains: trusting what you have always done and getting comfortable in your ways is the best way to finish in last place.

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