September 7, 2005

Lies, Damned Lies

The Tiger Plan, Revisited

by Nate Silver

A year ago at about this time, I wrote a column entitled the Tiger Plan, which argued that the Detroit Tigers deserved credit for their aggressive behavior in the free-agent market before the 2004 season, even though the free agents they acquired would have little to no chance of propelling the team to a playoff spot. The article was built around two arguments:

• Going from being very bad to merely below-average should have some benefit in terms of team revenues;

• Even if the ultimate goal is to contend seriously for a pennant, it’s tough to build momentum toward that goal from a 100-loss starting point.

I want to rethink these arguments in light of some recent research that I’ve done in connection with an upcoming BP book project. I don’t want to steal the thunder from this project too much, but given that I already spilled the beans on this past weekend’s radio show, I’m going to go ahead and let you in on one of its most important conclusions.

There is a very substantial, and very non-linear, increase in local revenues that a team can expect as a result of making the playoffs. More specifically, this increase is felt over the longer term. A single playoff appearance can result in a meaningful increase in both attendance revenues and local broadcasting revenues for as many as 10 years.

I don’t think this finding should be all that surprising. Most baseball clubs either implicitly or explicitly make reaching the playoffs their goal, preferably in the near term, or if that isn’t possible, at least in the medium term. Most fans want to see a competitive baseball club, and there’s no better evidence that a team is competitive than that it’s able to compete for its fair share of pennants.

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