Taking Moneyball Beyond Baseball

Posted on January 8, 2008 by

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Yesterday I noted that I was no longer going to post daily columns.  In fact, I stated that I promised several co-authors that I would stop doing this. What follows, though, is not one of my columns (so I am not breaking my promise).  Rather, this is a column by Brian Goff – a fellow sports economist – posted at The Sports Economist on the prevalence of Moneyball beyond baseball.

The Dispersion of Moneyball 

Two diverse mentions of Moneyball over the past week. Both lend credibility to treating the Moneyball approach as a technological innovation in the assessing of players and valuing their roles on teams dispersing over time and across different sports. The first reference comes from Peter King on SI.com discussing head coaching candidates, adding another to the list of Econo-Coaches:

Jim Schwartz (41), defensive coordinator, Tennessee. Quite likely the only economics major from Georgetown on the list, Schwartz finished second to Mike Nolan in San Francisco two years ago. He’s an outside-the-box thinker who read Moneyball and learned some things he could adapt to football. Smart, obviously, but tough enough to get players’ respect. Any owner who has an opening should talk to Schwartz, if only to learn what a strong, bright mind can do to energize a program.

The second story appears on ESPN Soccernet on “Beane Brings Moneyball Approach to MLS.”

I think the misconception about any statistical analysis is that you’re not going to be 100 percent correct,” Beane said. “What you’re trying to do is create an arbitrage … if you’re right 25 percent versus 20 percent you’ve created a 5 percent arbitrage opportunity. That’s really all you’re trying to do.”

But when it comes to soccer, such a strategy is up against what can be described as the Power of Too; as in too many players, in too many leagues, at too many levels in a game that has too many intangibles to easily render itself to statistics. But Beane contends that when it comes to soccer, such analysis is not uncharted territory.

“Let’s face it, every business has metrics that can be used,” Beane said. “It’s just identifying the metrics that have the greatest weight and the greatest correlation to ultimately winning. It’s a work in progress, and I say this with a tremendous amount of respect [for soccer].”

To that end, Beane confirmed that he is working with Leeds University Business School professor Bill Gerrard in the hope of developing a proprietary system for evaluating soccer players, as well as looking to acquire additional sources of data.

An Extra Point

Let me add just a little bit more to what Goff has said (again I am really just posting links so this is not a column either).  The November, 2007 issue of the International Journal of Sport Finance was entitled: Are the Lessons of Moneyball Applicable Beyond Baseball?

This issue, dedicated to Moneyball, included – among others — the following articles:

The Moneyball Anomaly and Payroll Efficiency: A Further Investigation

By Jahn K. Hakes and Raymond D. Sauer

Does One Simply Need to Score to Score?

By David J. Berri, Stacey L. Brook, and Martin B. Schmidt

Is the Moneyball Approach Transferable to Complex Invasion Team Sports?

By Bill Gerrard

The Hakes-Sauer piece updated “An Economic Evaluation of the Moneyball Hypothesis.”, a paper which appeared in the Summer, 2006 issue of the Journal of Economic Perspectives.   Previously I discussed the JEP article, which offered evidence that baseball teams have historically undervalued on-base-percentage.  The IJSF work confirmed the finding published in JEP.

The Berri-Brook-Schmidt paper is essentially Chapter 10 of The Wages of Wins, but with equations, tables, etc… The key finding we report is that wasting possessions -via missed shots and turnovers – does not result in less pay in the NBA. 

Finally, the Gerrard article looks at how sports like soccer, football, basketball, and hockey can be examined statistically.  Unfortunately, like the other IJSF papers I mentioned, the Gerrard paper is not on-line.  If it was, it would help people understand how one models team invasion sports. 

Gerrard’s approach (developed independent of my work) is entirely consistent with how I modeled basketball in “A Simple Measure of Worker Productivity in the National Basketball Association.” forthcoming in 2008 in The Business of Sport (eds. Brad Humphreys and Dennis Howard, 3 volumes, Westport, Conn.: Praeger).

Two Overtime Points

1. This past weekend I had dinner with Brad in New Orleans.  He tells me that The Business of Sport should be available in the next few months. 

2. A bit more on Bill Gerrard.  Bill is a Professor of Sport Management and Finance at the University of Leeds (in England).  He is described on the Leeds website as follows:

Dr Bill Gerrard is an international authority on sports finance. He has published academic papers on the player transfer market, measuring player quality, coaching efficiency, sports sponsorship and the media ownership of teams. He is Acting Editor of the European Sport Management Quarterly and a member of the editorial boards of the Journal of Sport Management and the Journal of Sports Economics. He is a member of the North American Society of Sport Management and the European Association of Sport Management. He undertakes consultancy work in the sports industry, advising teams, governing bodies and financial institutions. Dr Gerrard has developed player transfer and wage valuation systems for use in the football industry. He has undertaken squad valuations for various football clubs, including Leeds United.

And for those who want more, here is a two minute YouTube video I found of Bill discussing both the role statistics play in decision-making in sports as well as how performance metrics in sports should be constructed.  

– DJ

Posted in: Sports Econ