Will Sabermetrics lead to parity?

[Flip217]

I can't remember exactly where I heard this, but I think it was on one of MLB network's shows yesterday. A commentator was discussing the dominance of the Yankees and Red Sox in the AL East and said something along the lines of "...they not only have the advantage in money to spend, they also have the advantage in the people making decisions..."

Something about that stuck in my head and rattled around, until this morning it coalesced into a question -- as Sabermetrics continues to advance, and the people wielding these formulas become more adept at using them, will we see real parity in baseball?

I think this thought popped into my head also because I'm reading a book on economics, and the current chapter is dealing with people making decisions based on incomplete access to information.

So before anyone had heard of WARP and EqA and the rest, scouts went out and looked at players and filed reports, and teams spent their money accordingly. But all the necessary information wasn't available to all the teams -- scouts might not have realized a pitcher was particularly fortunate that season, for example. But now we can look at BABIP and whatnot, and see that he was lucky beyond what can be expected to continue, and perhaps not offer said pitcher a massive multi-year deal.

For some teams it didn't matter -- they could just look at the pool of free agents and offer the guys who'd made the most All Star teams a fat contract, and off they went. But the other teams, with far less margin for error, suffered.

So as this progress continues -- as management becomes more proficient at using available information to predict the best player performance -- shouldn't the difference between the best and worst teams begin to shrink considerably?

Sure, the Big Boys will have more money to offer to free agents -- but won't the small market teams be able to identify their promising players more accurately, and sign them to long term deals early? And won't the worst teams become better at identifying talent in the draft, and have fewer bust picks?

I know it's not quite as simple as this -- players signing for above slot, the presence (or lack thereof) of teams in foreign countries looking for talent there, etc. -- and there's also the fact that the Yankees and Red Sox could also sign the best Sabermetricians (the point made by my mystery commentator that started this whole thing) and so still retain their advantage.

But my gut tells me it will be harder for teams to simply purchase a ticket directly to the postseason, and to dominate a division year after year, if all the teams become better at sorting through the data and using it effectively.

[Arthur_Bryant]

In a word, no. It will not lead to parity.

It will lead to teams being smarter, and that has already started to happen. But the concepts are freely available, and nothing can stop a rich team from applying them as well as anyone.

The concepts also aren't static, and teams that are open to new methods and constantly exploring new angles will have an advantage over those who are slower to catch on. But, again, rich teams can do that as well as anyone.

And, in fact, one of the teams with the greatest material resources (Boston) also seems to be among those who are always looking for a competitive edge through statistical analysis. Well-funded and smart is a tough combination to beat.

[bird watcher]

Stats are only so good in predictive value. They are excellent in telling a story about what has already been done but not necessarily what will happen next. That is where scouting comes in. What is he going to become? That is where scouts make their money and better scouts probably make more money. Bigger market teams have more scouts and sometimes better more proven scouts (guess on my part).

[DrungoHazewood]

Right, as AB said, the rich teams can use these concepts as well as anyone. We've actually seen competitive balance decline a bit in recent years, for the first time in baseball history. This is probably because we're seeing a confluence of rich teams and smart people.

There will always be inefficiencies to exploit, but unless baseball changes their economic model small market teams will always be at a disadvantage. Even if Billy Beane and Theo Epstein were co-GMs of the Orioles they'd have difficulty consistently competing with the Sox' and Yanks' money.

[Flip217]

Right, as AB said, the rich teams can use these concepts as well as anyone. We've actually seen competitive balance decline a bit in recent years, for the first time in baseball history. This is probably because we're seeing a confluence of rich teams and smart people.

But won't there eventually be a surplus of "smart people"? I'm not trying to sound crass, but my train of thought goes in this admittedly tenuous direction....

At some point, the study of baseball (referred to generally as 'Sabermetrics') will reach a level where it's about as accurate as it can get. Recently there was a thread (I can't remember which) where someone posted a chart of the correlation between various stats and wins, and there was RBI, HR's, etc., but the high correlations started at OBP, and the differences between that stat and the other highest stats were very slim.

So as time goes on and the research methods improve and we invent new and better ways of measuring ability in baseball, we'll end up with a set of "Best Stats" and a good understanding of how to apply and use them. And as Drungo points out, the rich teams can use the concepts as well as anyone -- but it's only the "poor teams" that have this as their only chance of improving. So if they have equal access to this information, which being a poor team shouldn't influence in the least, they'll be able to apply the methods just as well as the rich teams and enjoy the benefits -- the best players in the draft, the best values in free agency, etc.

There will always be inefficiencies to exploit,

Will there, though? Isn't the point of Sabermetrics to accurately rank not only past players but predict future performance? If you believe we have a better insight into player performance now than we did five years ago, and a better vision five years ago than ten years ago, isn't it safe to say we'll reach a point where the sophistication of the formulas will mean we can almost eliminate those inefficiencies? New inefficiencies won't be being created, will they?

but unless baseball changes their economic model small market teams will always be at a disadvantage. Even if Billy Beane and Theo Epstein were co-GMs of the Orioles they'd have difficulty consistently competing with the Sox' and Yanks' money.

I guess I'm thinking that being a small market team is a disadvantage in many ways, but having access to the information and formulas that allow you to understand baseball and how the players perform isn't one of them.

[mweb]

No, like others have said, before some of the small and mid-market teams were able to make up for the dollar disadvantage by outsmarting the big-market. Now that is harder to do.

Plus, the dollar disparity between the top and bottom has grown in recent years, so that hurts parity as well.

[Arthur_Bryant]

So as time goes on and the research methods improve and we invent new and better ways of measuring ability in baseball, we'll end up with a set of "Best Stats" and a good understanding of how to apply and use them. And as Drungo points out, the rich teams can use the concepts as well as anyone -- but it's only the "poor teams" that have this as their only chance of improving. So if they have equal access to this information, which being a poor team shouldn't influence in the least, they'll be able to apply the methods just as well as the rich teams and enjoy the benefits -- the best players in the draft, the best values in free agency, etc.

Yes, but equal enlightment won't lead to equal outcomes so long as some teams can apply the leverage of $$$ with greater effect than others. It all comes down to the marketplace, and knowing as much as the rich teams won't help much if the rich teams drive prices up past the point that the less-rich teams can afford.

I might know as much about my local real estate market as Warren Buffett knows, but if he and I both decide that we must have the house across the street from me, he's going to end up with it every time.

[Flip217]

No, like others have said, before some of the small and mid-market teams were able to make up for the dollar disadvantage by outsmarting the big-market. Now that is harder to do.

Plus, the dollar disparity between the top and bottom has grown in recent years, so that hurts parity as well.

But doesn't that disadvantage work the other way? The point is that as information becomes more accurate and readily available, shouldn't it be harder for anyone to outsmart anyone else?

Yes, but equal enlightment won't lead to equal outcomes so long as some teams can apply the leverage of $$$ with greater effect than others. It all comes down to the marketplace, and knowing as much as the rich teams won't help much if the rich teams drive prices up past the point that the less-rich teams can afford.

I might know as much about my local real estate market as Warren Buffett knows, but if he and I both decide that we must have the house across the street from me, he's going to end up with it every time.

This would be true if the only way, or best way, was to improve your team was through free agency. But baseball already has a system in place that is supposed to give the weaker teams an advantage -- they get to choose earlier in the draft.

Those choices are based on the information they have about the players in the draft; that information has been getting better and better; so aren't we (or shouldn't we) be reaching a point where you can plug in the appropriate formulas and reach more or less the same conclusion as everybody else?

[Arthur_Bryant]

Those choices are based on the information they have about the players in the draft; that information has been getting better and better; so aren't we (or shouldn't we) be reaching a point where you can plug in the appropriate formulas and reach more or less the same conclusion as everybody else?

Actually I do believe that the amateur draft is the last important opportunity for lesser-market teams to go toe-to-toe with the heavyweights, at least for the present time. But that is also an artificially undervalued market. The situation will change somewhat if the slot system erodes much further.

But even if that doesn't happen, the amateur draft is just one way for teams to acquire talent. There's also the international market and FA, and that gives the heavyweights a chance to put some muscle behind their knowledge of the game. As long as those "loopholes" exist, the imbalance of resources will thwart equal outcomes, even if knowledge is equal.

I do question whether there will ever be a consensus on baseball knowledge, or a single set of formulas. And really that's a good thing, because as long as there's a difference of opinion, there will be a chance for a smart little guy to get an edge over a less-smart big guy.

Interesting discussion, thanks.

[Flip217]

Actually I do believe that the amateur draft is the last important opportunity for lesser-market teams to go toe-to-toe with the heavyweights...

I suppose you could imagine a team that just buys the best free agent player at each position each season, and that might mitigate the advantage a losing team has in the draft. But could you have four teams in each league doing that and making the playoffs? Could a team apply that strategy each season and hope to win their division?

I do question whether there will ever be a consensus on baseball knowledge, or a single set of formulas. And really that's a good thing, because as long as there's a difference of opinion, there will be a chance for a smart little guy to get an edge over a less-smart big guy.

Interesting discussion, thanks.

Well, that's where my argument / discussion kind of falls apart. I think we'll end up with a variety of similar, but significantly different, ways of measuring and predicting. So some teams will use the "Drungo Hazewood" method, others will use the "JTrea Approach", and others will ignore all stats and use the "OldFan Methodology" (I kid! I kid!) I doubt each team will really have absolutely equal information on each player, and I doubt we can really design formulas that predict performance equally for every player. And I agree with you 100% that it's a good thing!

[DrungoHazewood]

But doesn't that disadvantage work the other way? The point is that as information becomes more accurate and readily available, shouldn't it be harder for anyone to outsmart anyone else?

Yes, it's already harder to outsmart any other team because almost every team uses sabermetrics to some degree.

And when everyone is smart we go back to money and luck as the driving factors behind success.

This would be true if the only way, or best way, was to improve your team was through free agency. But baseball already has a system in place that is supposed to give the weaker teams an advantage -- they get to choose earlier in the draft.

Those choices are based on the information they have about the players in the draft; that information has been getting better and better; so aren't we (or shouldn't we) be reaching a point where you can plug in the appropriate formulas and reach more or less the same conclusion as everybody else?

We'll probably see (and probably are already seeing) greater consensus on who to draft than before. But we're not to unanimity yet, and may never get there because there are so many players to scout, and so many differences in, well, preference and risk tolerance that teams will naturally come to different conclusions. And no two scouts or analytical systems will ever come to exactly the same conclusions, especially among players as far away from the majors as high school or even college prospects.

I suppose you could imagine a team that just buys the best free agent player at each position each season, and that might mitigate the advantage a losing team has in the draft. But could you have four teams in each league doing that and making the playoffs? Could a team apply that strategy each season and hope to win their division?

No, and they won't. Even rich teams realize there's a lot of value in cost-controlled players. If they have 1/4 of their roster making $400k there's that much more money they can use to outbid everyone else on the next Teixeira. And there's probably value in having home-grown stars - Yankee fans think Jeter, Posada and Rivera are something like demi-gods.

Well, that's where my argument / discussion kind of falls apart. I think we'll end up with a variety of similar, but significantly different, ways of measuring and predicting. So some teams will use the "Drungo Hazewood" method, others will use the "JTrea Approach", and others will ignore all stats and use the "OldFan Methodology" (I kid! I kid!) I doubt each team will really have absolutely equal information on each player, and I doubt we can really design formulas that predict performance equally for every player. And I agree with you 100% that it's a good thing!

I think we're already seeing most, if not all, major league teams incorporating a variety of information in their decision making processes. Even teams like the Giants and Cubs are making a point of saying that they have analysts and information technology people playing key roles in the front office. There will always be subtle differences in approach, and that will often lead to big differences in the conclusions they reach. But I seriously doubt any MLB team is going to go with a nearly all scouts or all stats approach. And we certainly won't see any team use a method where they just draft people who look like Curt Blefray and then ridicule them for not being as good as guys from the 1920s (). It just doesn't make any sense to not use all of the information at one's disposal.

So... approaches will continue to converge, but philosophies and markets and a hundred other factors will drive teams to reach very different conclusions.