CSS Button No Image Css3Menu.com

Baseball Prospectus home
  
  
Click here to log in Click here for forgotten password Click here to subscribe

<< Previous Article
Premium Article Transaction Action: Th... (07/20)
No Previous Column
Next Column >>
Premium Article Ahead in the Count: Ac... (07/27)
Next Article >>
Premium Article Future Shock: Monday T... (07/20)

July 20, 2009

Ahead in the Count

Get the Doctor, Now!

by Matt Swartz

the archives are now free.

All Baseball Prospectus Premium and Fantasy articles more than a year old are now free as a thank you to the entire Internet for making our work possible.

Not a subscriber? Get exclusive content like this delivered hot to your inbox every weekday. Click here for more information on Baseball Prospectus subscriptions or use the buttons to the right to subscribe and get instant access to the best baseball content on the web.

Subscribe for $4.95 per month
Recurring subscription - cancel anytime.


a 33% savings over the monthly price!

Purchase a $39.95 gift subscription
a 33% savings over the monthly price!

Already a subscriber? Click here and use the blue login bar to log in.

When sabermetricians try to approximate the dollar value of a player's performance, we are mostly using recent free-agent values. For instance, if Halladay is worth about six wins above replacement level (which is a good approximation for most teams' fifth starters), we would say that the value of his replacing a typical fifth starter is about $27 million above the MLB-minimum salary of $400,000. As his current contract pays him $14.25 million in 2009, this would imply that a full 2009 season of Roy Halladay would have been worth the difference ($13.15 million). However, let's say that Halladay gets dealt right now, with about 70 games left to go, instead of around the deadline. Our inclination would be to say that Halladay's remaining 2009 net value would be this pro-rated, $5.7 million above his contract, but that misses a few essential parts of the analysis.

Free agency is a process by which teams bid for a player's services in an auction format. The winner is usually the team that offers to pay the most. What that means is that the team who signs the player is probably the team who values the player the most. That may be optimism, but it also may be that the team has more value for his services than other clubs.

Estimating the value of an object at the amount of money the purchaser paid for it is somewhat inaccurate, only because not everyone values things equally. Suppose that I told you that I recently purchased a swimming pool skimmer for $15. You might think that I got a pretty good deal until you found out that I don't own a pool. Similarly, the Cardinals did not bid on Mark Teixeira this winter, simply because it would not be worth the $22.5 million the Yankees pay him annually to have him sit on the Cardinals' bench and watch Albert Pujols take his cuts.

Additionally, if I told you that my friends bought a used pool skimmer for $40 at midnight last night, you might think that they were being foolish, but if you found out that their son had a pool party at 11:00 AM and their pool was filled with leaves, you would probably change your mind. The gravity of the situation matters. Similarly, if I told you that instead of letting Tom Glavine pitch the last day of the 2007 baseball season against the Marlins, the Mets were somehow able to pay Johan Santana to join the staff on that fateful Sunday and pitch them to victory instead, you might value that more than 1/162nd of his contract value. That game was definitely going to make or break their season (or at least send them into a one-game playoff), since they were tied with the Phillies on the last day of the season for the division lead, and that game was definitely pivotal.

At the beginning of the season, Roy Halladay may have been worth about $27.4 million to a contender, but a contender might not end up needing those six wins above replacement level; alternatively, they may not even have been enough. We act as though 162 games is a large sample size, but a team that has the talent to win 89 games will finish with 99 wins or more about seven percent of the time, and will finish with 79 wins or less about five percent of the time, just out of sheer luck, good or bad. The odds of even a six-win pitcher like Halladay actually making the difference in a team's season is pretty low when calculated in April. In fact, the odds of a one-win player actually adding that one crucial game that the team would not have won anyway is about 6.3 percent. However, as the trade deadline approaches, and a team knows that they are in contention but not guaranteed a playoff spot, the odds of a one-win player adding that one crucial game go up to about 9.6 percent. Therefore, even though the number of wins that Halladay adds if he joins a team 92 games late might be only 2.6 wins over the last 70 games (instead of six wins over 162 games), he still will maintain up to 66 percent of his revenue production value while only maintaining 43 percent of his win value.

Not all of this is due to the factor described above. Although playoff series are inherently random in their outcomes from a statistical standpoint, we have to assume that if Halladay adds six wins above replacement level over the course of 35 starts, then he must add about 17 percent to a team's odds of winning an individual game he pitches as compared with a replacement-level pitcher. If we approximate that a team will win 58.5 percent of the playoff games that Halladay pitches, 41.5 percent of the playoff games that their current fourth starter pitches, and 50 percent of the games that their top three current starters pitch, then adding Halladay into the rotation and bumping everyone down a spot (eliminating the previous fourth starter) will increase a team's odds of winning a five-game series by about 9.6 percent, and increase a team's odds of winning a seven-game series by about 6.4 percent.

Back in 2005, Nate Silver approximated the value of a win as $750,000 if you ignore the impact of making the playoffs, and he estimated the value of a playoff appearance at approximately $30 million. To match with the current $4.5 million per expected win value typically paid to free agents, I developed a method to bump these values up by about 50 percent. The harder part was approximating the added value of reaching each stage of making the playoffs. These are somewhat debatable, but I will report my estimates for the sake of transparency. The point should hold anyway, but here they are:

Making the playoffs but losing the Divisional Series: +$25 million (versus no playoffs)
Making the playoffs but losing the Championship Series: +$45 million
Making the playoffs but losing the World Series: +$75 million
Making the playoffs and winning the World Series: +$105 million

Value of a win, ignoring playoff implications: $1.125 million

The teams that have been mentioned the most often in the Halladay hunt (and their respective PECOTA-based playoff odds through Saturday) are the Red Sox (91%), Yankees (78%), Phillies (72%), Angels (67%), Cardinals (56%), Tigers (39%), White Sox (31%), Giants (30%), Brewers (27%), and Rangers (21%). Using ballpark estimates which should be pretty close to the true value, adding Halladay would respectively increase their playoff odds by varying amounts: Red Sox (98%), Yankees (92%), Phillies (89%), Angels (86%), Cardinals (78%), Tigers (63%), White Sox (55%), Giants (54%), Brewers (50%), and Rangers (42%).

To estimate these numbers, I used the binomial theorem to estimate a distribution for the expected win total in each team's remaining games, and then I figured out which win total matched up with their current playoff odds. Then I figured out what that distribution would look like with a team that could be expected to win 2.6 more games on average over the course of the season, and the new probability of reaching that win total with Halladay aboard. Given the numbers listed above for wins and for reaching each stage in the playoffs, I computed the revenue gain of adding Halladay to each of the ten teams above.

Without getting into the subtleties of who Halladay would replace in the regular season and playoff rotations for each team, here are the approximate percentages of Halladay's full 2009 revenue production value ($27.4 million) that Halladay would generate for each of the possible teams that he could join:


Team        %      $
Red Sox    44%   $12.0 million
Yankees    55%   $14.9 million
Phillies   59%   $16.0 million
Angels     61%   $16.6 million
Cardinals  65%   $17.7 million
Tigers     65%   $17.8 million
White Sox  63%   $17.1 million
Giants     63%   $17.1 million
Brewers    60%   $16.5 million
Rangers    56%   $15.2 million

The Tigers, for example, may have valued Roy Halladay's performance at $27.4 million at the beginning of the season, and with a contract that paid him $14.25 million this year, the Tigers would have been willing to give up $13.15 million of value to have him in 2009. Even though the season is more than halfway over, they would value his performance from now on at $17.8 million. With only $6.2 million still due to him (versus the $200,000 they would need to pay a replacement-level pitcher), they would now value him at $11.8 million. To put it another way, that is 90 percent of his 2009 net value still maintained with only 43 percent of the season left.

To get the full value of Halladay through the 2010 season-or the length of time that he's already under contract for-you add in $27.4 million for 2010, and $5 million for the approximate value of free-agent compensation picks (per Victor Wang's calculations), and with about $21.9 million still owed to him, that makes him worth anywhere between $22.5 and $28.5 million to a team that picks him up. Sky Kalkman did an excellent article to begin the process of approximating Roy Halladay's value, and estimated that it is about $23 million. Therefore, he supposed that Halladay was worth about a Top 26-50 hitting prospect. The extra value revealed by using this method shows that he is also worth an extra Grade-B hitter as well.

Not only is it important to remember that a player's value is different to every team, but it is also important to remember that his value is not evenly distributed throughout the season. To a team like the Blue Jays, he is worth only around $3 million for the rest of this season; to a team like the Tigers, he is worth nearly $18 million. With Halladay worth nearly $15 million more to several teams than he is to the Blue Jays, Jays GM J.P. Ricciardi should be able to meet someone somewhere in the middle. He may not make a deal, but if he is does not, he has spoiled $15 million of surplus value available in a trade.

Matt Swartz is an author of Baseball Prospectus. 
Click here to see Matt's other articles. You can contact Matt by clicking here

56 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

jmanig

Actually, if memory serves me right, a win for the Mets in that last game of the 2007 season would have pushed them into a four game playoff with the Phillies, Rockies and Padres. I seem to remember being disaapointed that the Mets didn't end up winning for that very reason.

Jul 20, 2009 12:11 PM
rating: 0
 
Matt Swartz

That's true. There were a whole lot scenarios. A better example I considered was the one game playoff between the White Sox and Twins last year, but since that was a 1-0 game, I figured that it wasn't a great example. The general point of games mattering more late in the season conditional on being on the borderline late in the season still holds, though.

Jul 20, 2009 15:19 PM
rating: 1
 
CRP13

Glad to see Matt still contributing. Great article here, I would love to see a GM operate an organization based on these principles.

Jul 20, 2009 12:15 PM
rating: 6
 
Charles Kurz

Word, this is great. Its good to see you still here, Matt.

Jul 20, 2009 13:09 PM
rating: 7
 
Richard Bergstrom

Great to see you around Matt!

Jul 20, 2009 16:06 PM
rating: 3
 
awayish

Excellent article. Although as we see more and more of these player evaluations that incorporate the business side of baseball, we are no longer assessing a question of player impact, but a question of marginal profits. The only interesting information for fans derived from answering the second question seems to be that, if a move is sensible on the ledger, then the team will or at least likely to make the move. But to make this information tangible, we should at least understand whether teams are adopting this approach of evaluation. They need not be following the exact model, but should be following a quantitative and marginal approach. If most of the teams are not doing this, then the sound assessment in this piece and others like it will likely only inform spectator GM/owner wannabes.

Jul 20, 2009 12:27 PM
rating: 1
 
BP staff member Jay Jaffe
BP staff

"For instance, if Halladay is worth about six wins above replacement level (which is a good approximation for most teams’ fifth starters), we would say that the value of his replacing a typical fifth starter is about $27 million above the MLB-minimum salary of $400,000."

A fifth starter worth 6 WARP and $27 million? In what universe?

Jul 20, 2009 12:28 PM
 
dpowell

The sentence implies that the 5th starter is replacement level.

Jul 20, 2009 12:32 PM
rating: 3
 
BP staff member Jay Jaffe
BP staff

OK, now I understand what he was trying to say there, but it was a poorly worded sentence that took an assist to clarify. Something like this would have been more clear:

"For instance, if Halladay is worth about six wins above replacement level — above a typical fifth starter, in other words — we would say that the value of his replacing that fifth starter is about $27 million above the MLB-minimum salary of $400,000."

Jul 20, 2009 12:46 PM
 
BurrRutledge

I had the same first-read, but I understood the intent on a double-take. Could definitely have been written more clearly.

Matt, nice to see you on the BP roster!

Jul 20, 2009 14:40 PM
rating: 0
 
Matt Swartz

Thanks. Yeah, I like yours better :-)

Jul 20, 2009 15:21 PM
rating: 1
 
jkaplow21

Matt, looks like they will be judging you for a while.

Jul 20, 2009 18:05 PM
rating: 6
 
FastballVelociraptor

Yeah, I got the sentence first try, this ain't BP Idol anymore Jay!

Jul 24, 2009 10:57 AM
rating: 0
 
Matthew Knight

This probably is in the level of noise, but does an AL team have a little extra incentive to acquire Halladay because it means he won't be pitching against them the remainder of the season? I imagine this is doubly true for the Yankees and Red Sox since they would still face him a bunch of times if he either stays on the Blue Jays or goes to the other AL East behemoth.

Jul 20, 2009 12:38 PM
rating: 2
 
Pat Folz

I'm can't imagine that benefit is worth the expense of acquiring him. It's at most about 5 games against him (I counted 3, actually, against the Red Sox -- fewer for the Yanks and Rays -- if he stays with the Jays).

If you have, say, a 40% chance of beating the Jays on the days he pitches, and a 70% chance of beating the replacement-level pitcher who replaces him, that's a net gain of 1.5 wins (from 2.0 to 3.5 expected). Taking the max value of $4.5 million/win, that's a high-end estimate of $6.75 million in value from that.

Since 1)you will probably face him fewer than 5 times and 2)the effect is less pronounced against a better team (since you're less likely to win anyway), I just can't see avoiding him being a deciding factor. The benefit is certainly dwarfed by that of simply having Halladay make a half-season of starts for you. However, it might be enough to add a few million to the incentive pot, though, bumping the Yankees up into the White Sox/Giants bracket...

Jul 20, 2009 13:20 PM
rating: 0
 
westsox

I think another interesting analysis is the added value for a team like the Red Sox, in knowing that the Yankees won't acquire him. The Red Sox playoff percentage and the Yankees playoff percentage are not independent numbers, and are in fact highly correlated. If the Yankees acquire Halladay, not only does their playoff percentage increase, but the Red Sox playoff likelihood decreases. Wouldn't that add even more value in acquiring Halladay, from the Red Sox perspective, in this case?

Jul 20, 2009 13:40 PM
rating: 1
 
SpifficusRex

That'd be an interesting extension - comparing the value of acquiring Halladay with the negative value of the competition acquiring him.

Jul 20, 2009 15:34 PM
rating: 0
 
Matt Swartz

I definitely agree with this. It's worth looking into. I remember last year when the Mets were working on acquiring Johan Santana and it seemed like the Yankees were in on it too, I wondered if the Phillies might not have been better off tossing in a low-level prospect without getting anything back to break the tie for the Yankees. All types of interesting arrangements can pop up when there are externalities like that!

Jul 21, 2009 20:43 PM
rating: 0
 
Matt Swartz

True. That does add to the complication here as well. There was a pretty cool discussion between Crashburn Alley and Sky Kalkman here: http://crashburnalley.com/?p=446#comment-9662 where they talked about the value of trading Halladay and other players within the division. A lot of interesting idea tossed back and forth.

Jul 20, 2009 15:27 PM
rating: 0
 
chico123

Each team and market has its own unique win-to-revenue ratio and in this recession, clubs are likely not very confident in their models. It appears that an average is being applied to each team. All thing being equal, which is never the case, the Giants have more of a financial incentive to acquire Doc than the Brewers as they play in a much bigger market.

Jul 20, 2009 12:52 PM
rating: 1
 
Ben Solow

Agreed. Considering Matt's an economist for his day job, it would've been nice if he'd checked out some of the sports econ papers that have done marginal revenue estimates for different teams. Not to be insulting to Nate, but if I remember correctly, he wasn't doing his estimates using Blue Ribbon Panel data, which is the only data available that has been externally audited and avoids all sorts of team profit-shifting shenanigans, and it's not even close to true to say that each team has the same marginal revenue from wins (even absent playoff considerations).

Jul 20, 2009 13:51 PM
rating: 0
 
Shawn Hoffman

That's way easier said than done Ben. The academic papers on this subject suck (as academic papers tend to do). You're 100% correct that each team has its own marginal revenue curve, but estimating it is extraordinarily difficult. There's no reliable year-to-year revenue information to model it after, and on top of that, playoff appearances usually create more revenue the FOLLOWING year... But how do you isolate that from the following year's performance?

I think Nate did a market size study a few years ago, but that doesn't really work either -- the Yankees and Mets play in the same market, but the value of a marginal win is clearly much higher for the Yankees.

Jul 20, 2009 14:51 PM
rating: 0
 
Matt Swartz

It's absolutely true that different teams will have different marginal revenue curves. Academic papers, and really any outside observers, are going to have a hard time estimating the marginal revenue of a move due to limited information about individual circumstances. The teams included in my analysis above were mostly large market teams, or at least teams that have a large marginal revenue to a win. Papers are going to have a hard time approximating the value exactly. Nate's numbers are bound to underestimate the marginal revenue that a player adds to a team if he joins, because if the team wanted him, they might have private information about their value that a general model would not have. That's not a flaw of the model, just a statistical fact based on conditional odds.

Rather than focus on the heterogeneity from market to market-- a valid topic, for sure-- this article was generally supposed to focus on the heterogeneity with respect to playoff odds. Both are valid issues, but I think playoff odds are a larger effect. After all, you sometimes see small market teams make big moves in the thick of the playoff chase, like the Brewers making a run for Sabathia, but you never really see large market teams that are out of the race go after players like that. The larger effect is probably playoff situation, though I agree that there is more to be done on the topic of heterogeneity with respect to marginal revenue in general.

Jul 20, 2009 15:36 PM
rating: 0
 
Richard Bergstrom

I wonder how much valuation changes for a team like the Dodgers, where they have such a lead that the in-season win potential from Halladay wouldn't matter as much as the playoff win potential might matter... though in such a scenario with shortened series and smaller playoff rotations, you'd probably have to compare him to a third or fourth starter instead of a replacement level fifth starter.

Jul 20, 2009 16:09 PM
rating: 0
 
Ben Solow

Sure, but my main point is that there exists only one reliable set of data for revenue estimates, the Blue Ribbon Panel data (i.e. the only externally audited set of data), and it would be a good idea to use that in estimating these things. I'm pretty sure it's available publicly, and if it's not, I know it has been used in the academic literature and for sure those authors would provide it.

In regards to the difficulty estimating the relationship, of course that's true -- there's a lot of problems with data, but I think your particular criticism isn't so relevant conditional on proper application of statistical techniques. I haven't taken the time to actually look at this, but it seems to me that you could probably perform a fixed effects regression and estimate the team-specific effects if you could find a good instrument for either team record this year or playoff appearance the year before to avoid the cross-year correlation.

In regards to which is the bigger effect, market heterogeneity or playoff probability, isn't it to some degree likely that market heterogeneity drives playoff probabilities? Large market teams have higher marginal revenues from winning and therefore acquire more talent, which puts them in high-payoff situations (in terms of playoff probability) more often?

Jul 21, 2009 10:56 AM
rating: 0
 
dpowell

So, just to clarify, you want Matt (or someone) to run the following regression for each team:

Revenue_t = a + b1 * (Win%_t) + b2 * (Playoffs_t-1) + (other championship variables at time t-1) + e

Is that right? What would your instruments be exactly? Would you really trust a time-series regression to give you accurate estimates? (I suppose you can estimate this for all teams simultaneously and include a year fixed effect which is constant for all teams, but I don't think that really solves the problem).

Jul 21, 2009 11:37 AM
rating: 0
 
Ben Solow

Fixed effects regression implies panel data, which means it's one regression, rather than one for each team. The point of doing panel data analysis is to take out time-invariant omitted variables that bias your results (i.e. team specific fixed effects) . To be a little technical, fixed effects involves demeaning all of your data to get rid of time-invariant variables, but STATA will report all of your "a's" in the following regression if you ask it to:

y_it = a + b1(Win%_it) + b2(playoff_i,t-1) + e_it

where "a" is a vector of every time-invariant portion of the model and you estimate with clustered standard errors. Given that playoff_i,t-1 is probably correlated with Win%_it, although it may not be, you would have to instrument one of the two. As I mentioned above, I haven't really invested a lot of time in thinking of possible instruments. One possible instrument for Win%_it would be the number of team days on DL or even injury cost...maybe that's correlated with y_it, which is a problem, but its endogeneity and relevance are testable. That's the one source of difficulty in this besides data, not the statistical technique.

Obviously this isn't a good solution due to lack of reliable data, but to come back to the original point, acknowledging that different teams have vastly different marginal revenue curves (including across only big market teams) is important. It's important enough to make the Yankees spend ~$200 million whereas other large market teams spend at most ~$130-140 million. Not all of that is the Steinbrenners being irrational.

Also, just to throw this out there, I really enjoy reading Matt's work. I guess I wish he was doing it with the same degree of rigor that he does in his day job, although I can understand why that would make the whole thing significantly less fun for lots of people, probably Matt included.

Jul 21, 2009 13:22 PM
rating: 0
 
dpowell

1) But you're still doing a time-series regression. You want team fixed effects AND team-specific coefficients. That's equivalent to doing a separate regression for each team (algebraically, assuming you would include the same variables for each team). Your identifying assumption, then, is that changes in playoff appearances or Win% is exogenous and uncorrelated with the year fixed effects. More importantly, how are you going to identify the revenue boost for a playoff appearance for the Nationals? Or, less extreme, for the Pirates? Are you planning to run this regression for the Pirates back to before 1992 and assume that coefficient is relevant to today? I would think the "year fixed effect" is crucially important in this case and that's just not identified (in each separate regression). That's not your fault and there isn't really much of an alternative, but I'm trying to figure out what you're proposing.

2) You would need to instrument both variables (the fact that they are or are not correlated with one another is irrelevant). I'm guessing that good instruments are hard to find here. Definitely for Win%, though possibly less so for playoff success (try to use some randomness in the outcomes?). But I'd still feel pretty uncomfortable with the results in a time-series regression.

Again, none of these problems are your fault, but I'm trying to figure out what assumptions you're willing to make. I actually think estimating separate coefficients would be very useful, but we just need to be clear on the restrictions that must be applied.

Jul 21, 2009 13:43 PM
rating: 0
 
dpowell

(Apologies - I realize this might be kind of annoying to some)

Another way of saying some of what I just wrote is...maybe write down what you think the correct specification is? What you wrote in your last post assumes the same effect for each team (which is what you're arguing against).

You want this?
Revenue_it = a_i + (X_it)'b_i+e_it

where X includes Win%, playoff success vars, etc. And you're assuming X is full rank for each team (not necessarily the case - eg. Nationals).

Right?

Jul 21, 2009 13:55 PM
rating: 0
 
Matt Swartz

Wow, I really enjoyed reading this exchange. That's very complicated stuff. In my opinion (and econometrics isn't my field of expertise in reality), I think dpowell is right that it is very tough to estimate all these effects and identify each parameter. Part of the issue is that I don't really see how the revenue curve would be linear in winning percentage at all. It seems like there would be different elasticities in different regions.

Also, the playoffs have effects in the current year as you make money in those games themselves and off of merchandise sales, so that would need to be heavily factored in.

I'm also not really sure how to factor in price stickiness and various other aspects to how revenue is actually generated. I don't really know that a reduced form regression would accomplish much, because it seems like the true form would have far more variables than even observations.

Perhaps this could be corrected for by games as an observation rather than teams revenue? There's also all types of other issues with the demand curve as well. I'm sure teams have a way of choosing prices that probably incorporate a lot of private information. In general, I would think it's probably impossible to discover anything terribly meaningful from a regression like that. I really enjoy hearing what you guys think about this. Thanks.

Jul 21, 2009 20:52 PM
rating: 2
 
Richard Bergstrom

Not sure how much this helps, but I remember a BP article (by Silver?) about marginal wins and estimating the amount of revenue each additional win was worth, along with how much revenue a playoff appearance was worth.

In that article, there was also a section about inflection points in wins and that, the marginal value of each win above and beyond what is needed to win the division decreases.

Maybe it was in Baseball Between the Numbers or one of the Annuals? (digs around)

Jul 22, 2009 00:45 AM
rating: 0
 
dpowell

Right, non-linearities are definitely an issue though even if they weren't, I'm not sure this type of analysis would be helpful. I, also, would say teams should use "private information," though I have to admit that feels like a cop-out since even with that information, I'm not sure how I'd (correctly) use it.

I don't think using revenue/game buys you much unless you also want to identify the effect of "record in the last 10 games" (or something similar). There's no variation in "won the World Series last year" game-to-game within a season.

Oh, great article, Matt.

Jul 22, 2009 07:38 AM
rating: 0
 
Ben Solow

You're right that there's some problems with the estimation technique and team-specific coefficients...I should probably think about this more when I'm not at work. I can't get away from the point that each team has to have their own independent coefficients, though, in order for the whole process to make any sense -- the Red Sox don't really have any increase in marginal revenue for making the playoffs. They've sold out every home game for the past 5 years, they sell a ridiculous amount of merchandise to a dedicated fanbase...aside from the extra games they play, there's not really a monetary payoff to making the playoffs, unless you consider a situation where the cumulative effect of not making the playoffs for 5-6 straight years might damage fan support somehow. Compare that with the Phillies, for example, (I'm just guessing, though) who probably received a pretty significant revenue bump from the WS victory.

Actually, the more I think about it, there's a lot of problems with doing any sort of analysis here...for sure the series' aren't cointegrated since revenue is trending upwards but it's impossible for a playoff dummy or win% to trend upwards also. Maybe revenue/game, as Matt suggested, would be stationary, though? I don't know a whole lot of time-series econometrics, though, so I don't know where you'd go from there.

Jul 22, 2009 07:12 AM
rating: 0
 
rraymo1

CAn I give this article a thumbs up?

Jul 20, 2009 14:04 PM
rating: 3
 
BP staff member Dave Pease
BP staff
(2)

who wants article rating? let us know in this thread if you do.

Jul 21, 2009 11:43 AM
 
dpowell

My guess is that people would definitely rate the articles if given a chance.

I would also recommend allowing the BP staff comments to be rated. It seems pretty strange that they are currently "exempt."

Jul 21, 2009 12:20 PM
rating: 0
 
Richard Bergstrom

I like the idea of rating articles... but I'm not sure rating staff comments is a good idea. Just speaking from personal experience, some people give me a negative regardless of what I say.. even if its something along the lines of "Great job". If people started flagging staff members they don't like, that might discourage some of them from commenting in the threads.

I actually like the system ProTrade uses a bit where article comments show the total number of +'s and -'s on a comment. There's a big difference between a +15/-20 and a 0/-5, though here on BP, both would show as a -5.

Jul 21, 2009 16:31 PM
rating: 0
 
Sky Kalkman

Good stuff, Matt. I'm working on expanding my preliminary work in a very similar way. Your model for playoff probability added looks pretty good, but with our playoff odds we're going to plug in the extra WAR and actually see how it changes things.

While I agree with the full economic approach (different revenue curves for different teams) for certain questions (does this move make financial sense) I don't necessarily agree it answers other questions, such as "will this move help maximize the number of World Series we win over the next ten years." For that, you care more about playoff probability and only care about unique payroll/revenue situations in the sense that locking up players are certain rates gives a team a better or worse chance at the playoffs. (That is, the Yankees should "overpay" typical FA rates a bit for studs, while the Rays and Pirates should avoid paying anything close to free agent rates for decent players.)

Jul 20, 2009 14:08 PM
rating: 1
 
anderson721

Excellent analysis. It makes me think the way to go is to take Wells with Halladay for some decnt prospects, as the positive impact of Doc would offset the hit of Wells.
What I can't figure out is why the Rays are not in the running. I think Halladay would help them more than anyone.

Jul 20, 2009 14:36 PM
rating: 0
 
CRP13

Kazmir, Shields, Garza, Niemann, Price.

Why would you take on that money when your rotation is already that strong (and cheap)? Already well established that there's a next-to-zero chance of Halladay staying in the AL East, and the Rays arguably still have the strongest top-to-bottom rotation in the division. Definitely the one with the most potential. Before somebody argues, a rotation with guys like Wakefield, Smoltz, Penny, or Alfredo Aceves is not superior no matter how strong your #1 starter is.

Jul 20, 2009 14:47 PM
rating: 1
 
Matt Swartz

I think this has to do with the issue being discussed above, which is the marginal revenue of a win for small market teams. The marginal win value of adding Halladay might be high for the Jays but the dollar value of those wins is probably not the $4.5 million per win that large market clubs often are around.

Jul 20, 2009 15:39 PM
rating: 0
 
Dr. Dave

I love it when you get all binomial.

Halladay has additional value beyond his VORP in how deep he goes into games. This makes the team more likely to win games in which he is not the starting pitcher, because it gives the bullpen more rest. It also directly reduces the number of innings thrown by pitchers who are not as good as Halladay, especially pitchers who would pitch the 6th and 7th innings of games with less durable starters.

Jul 20, 2009 14:45 PM
rating: 0
 
Sky Kalkman

I don't know about this. Rest is somewhat important, but unless the rest of the rotation is awful, it's not that big of an issue.

A reliever pitching the seventh inning can be nearly as effective as Halladay and his 3.25 ERA. Relievers aren't as good, but when they go one inning at a time, they're quite effective.

I actually think we OVER-rate how far into games starters can go.

Jul 20, 2009 15:10 PM
rating: 0
 
R.A.Wagman

Not with Halladay - he is averaging 7.3 IP/GS

Jul 20, 2009 16:26 PM
rating: 0
 
Richard Bergstrom

Agreed. What makes Halladay elite is not necessarily his pitching ability (which is very good, but not really at a Santana's level), but that he keeps pitching that well, that consistently, very deep into games.

Jul 20, 2009 21:57 PM
rating: -1
 
jkaplow21

There are a finite number of innings for a bullpen (when all is said and done). Using your best pitchers in the highest leverage situations is the most effective use of them. When a starting pitcher goes deep more often, it allows you to manage more dynamically and use the right pitchers when needed (especially factoring in extra innings).

However, MUCH of Halladay's IP is lost in the NL where if it is a close game, you may need to pull him earlier to pinch hit. I rarely think that one more inning for a starter is worth a pinch hitter's bat in his place.

Jul 20, 2009 18:12 PM
rating: 1
 
cbirkemeier

Good analysis, but unless I missed something, it seems to ignore that Halladay would be worth a different number of wins to each team, which would also change the dollar figures for each team.

Jul 20, 2009 15:13 PM
rating: 0
 
Matt Swartz

It's true. I mentioned in the article that I wasn't going to get into the specifics of that, because that would be an article by itself! I also didn't get into the subtleties of each teams marginal revenue from a win, but that's a separate issue as well. This is definitely not the definitive value, but just highlighting a huge $5-6 million shortage in value that had not been accounted for in similar analyses.

Jul 20, 2009 15:45 PM
rating: 0
 
chico123

It is my understanding that VORP accounts for innings pitched.

I think it is a relatively riskier proposition for a team to satisfy the Jays asking price for Halladay, as historical marginal revenue curves may not be applicable this season. The only scenario that seems financially rationale is an owner that plans to sell the club in the near future.

Jul 20, 2009 19:39 PM
rating: 0
 
hyprvypr

Why doesn't anyone give any chance for Seattle to pick up Halladay?

Felix Hernandez
Roy Halladay
Eric Bedard
Jarrod Washburn

That's a pretty damn hot rotation to enter the playoffs with, regardless on how soft the offence has been.

Is this because Seattle is more in the market for a couple of bats and not an arm? Halladay over Garret Olson makes a HUGE difference.

Jul 21, 2009 10:20 AM
rating: 0
 
Richard Bergstrom

Even if you had a mythical pitching staff that gave up 0 runs a game, you'd never win unless you could score a run. Besides the Mariners are still behind the Angels and the Rangers and I don't think acquiring Halladay is enough to leapfrog both of those teams. So why sandblast the farm system trying to get Halladay?

Jul 21, 2009 10:32 AM
rating: 0
 
Evan
(47)

Another factor Matt didn't consider, but teams like the Mariners should, is how goo they expect to be going forward. For a team that has a good chance to win it all this season, and maybe next season, but after that they need to rebuild anyway, trading for Halladay might make a lot of sense. But for a team like Seattle, that's already rebuilding, sacrificing the future to win now is inefficient. They'd be better off just winning in the future and not absorbing the extra expense of Halladay to win now.

Jul 21, 2009 11:23 AM
rating: 0
 
Matt Swartz

I like this idea, and I've written a little about it before. In general, there is no doubt that teams do consider windows of victory into the equation as well they should. The Mariners only have a 14% chance of making the playoffs according to PECOTA, so chances are that their value of adding him isn't high enough now to justify that risk either.

Jul 21, 2009 20:56 PM
rating: 0
 
akw4572

Great, great article.

Jul 22, 2009 09:45 AM
rating: 0
 
drdrip

Great article and comments.

Another factor that Ricardi has considered and that any analysis of Halladay's value should consider, is that it is going to cost more for an AL East rival to get him than another AL team and more for an AL team than for an NL team. As hinted at above, the AL East team could come out slightly ahead just because they wouldn't have to face him. Conversely, the Jays don't want to see him 6 times a year for the next 5 years, either. So the price goes up for the Sox and Yanks (and O's and Rays) thereby lowering Haladay's value to those teams.

Jul 22, 2009 09:47 AM
rating: 0
 
amazin_mess

I agree with Richard...I get negative ratings regardless. Just watch.

Jul 25, 2009 18:13 PM
rating: 2
 
You must be a Premium subscriber to post a comment.
Not a subscriber? Sign up today!
<< Previous Article
Premium Article Transaction Action: Th... (07/20)
No Previous Column
Next Column >>
Premium Article Ahead in the Count: Ac... (07/27)
Next Article >>
Premium Article Future Shock: Monday T... (07/20)

RECENTLY AT BASEBALL PROSPECTUS
BP Boston
West Coast By Us: All of the Allens
Premium Article Minor League Update: Games of June 1, 2015
Fantasy Rounders: Joc the Monkey
Premium Article Some Projection Left: Draft Needs: American ...
Premium Article What You Need to Know: June 2, 2015
Premium Article The Call-Up: Joey Gallo

MORE FROM JULY 20, 2009
Premium Article Future Shock: Monday Ten Pack
Premium Article Transaction Action: The Weekend Shuffle
Premium Article Prospectus Hit and Run: Schedule Difficultie...
Premium Article Under The Knife: Taking Hits
The Week in Quotes: July 13-19

MORE BY MATT SWARTZ
2009-08-11 - Premium Article Ahead in the Count: Home-Field Advantages, P...
2009-08-03 - Premium Article Ahead in the Count: Runs Per Inning, and Why...
2009-07-27 - Premium Article Ahead in the Count: Aces and Attendance
2009-07-20 - Premium Article Ahead in the Count: Get the Doctor, Now!
2009-07-05 - Prospectus Idol Entry: Swartz Interview Tran...
2009-06-28 - Prospectus Idol Entry: The First World Serie...
2009-06-21 - Prospectus Idol Entry: The 1991 World Series...
More...

MORE AHEAD IN THE COUNT
2009-08-11 - Premium Article Ahead in the Count: Home-Field Advantages, P...
2009-08-03 - Premium Article Ahead in the Count: Runs Per Inning, and Why...
2009-07-27 - Premium Article Ahead in the Count: Aces and Attendance
2009-07-20 - Premium Article Ahead in the Count: Get the Doctor, Now!
More...

INCOMING ARTICLE LINKS
2013-11-20 - The BP Wayback Machine: How to Make Up a Goo...
2009-12-21 - Premium Article Ahead in the Count: When Bad Teams Land Good...
2009-12-17 - Premium Article Ahead in the Count: Anatomy of a Blockbuster
2009-11-17 - Premium Article Ahead in the Count: How To Make Up a Good Tr...
2009-08-24 - Premium Article Checking the Numbers: What Can Wagner Do For...
2009-08-14 - Prospectus Hit List: Getting Their Money's W...
2009-07-29 - Premium Article Prospectus Hit and Run: Today is No Halladay
2009-07-27 - Premium Article Ahead in the Count: Aces and Attendance