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Articles Tagged Incentive 

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April 15, 2013 5:00 am

Fantasy Freestyle: Searching for Value in Contract Clauses

1

Mike Gianella

Mike examines whether games-finished clauses are indicative of future save opportunties.

When I was a small child everything I knew about baseball came from either the back of a baseball card or what the local color guys for the Yankees and Mets told me on TV. During this impressionable age, I remember reading about Steve Stone winning the Cy Young Award in 1980 and how he earned a $10,000 bonus for his trouble. As an impressionable lad, I figured that for Stone to have this bonus in his contract he had to be an excellent pitcher. Some superficial research told me that this wasn’t the case at all; Stone was a solid-but-unspectacular pitcher. As I learned from the back of this particular baseball card, the bonus clause was put into the contract, but it was something the Orioles figured he’d never collect.

“It was like an insurance salesman telling you, ‘We’ll give you $50,000 if an elephant falls on you,’ because he knows darn well an elephant isn’t going to fall on you,” Stone said at the time.

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The latest inefficiencies exploited by the Rays: ice cream and classical conditioning.

The Rays are baseball's hottest team, having run up a 15-5 record in August. Their pitchers, who've posted the lowest team ERA in the American League this month, deserve most of the credit. But their latest victory owed something to a secret more valuable than any of their statistical and scouting skills: the power of classical conditioning.

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November 5, 2010 9:00 am

GM for a Day: St. Louis Cardinals

20

Christina Kahrl

"Stars and scrubs" left the Cards on the outside looking in, so how about one more star?

So here we are in Mound City, home of the team that featured three of the 10 most-valuable players in the major leagues last season, and wound up with nothing but October golf dates to show for it. It would be easy, on a visceral level, to overreact and decide that the stars-and-scrubs formula hasn't worked, and start shopping one of the stars, but one of the advantages of this strategy for roster assembly is that you can easily replace the scrubs, and if you're worrying about expense, you know where to avoid it while making sure to spend top dollar on the capital items. It's the eight-figure mistakes with the likes of Kyle Lohse that are the ones to avoid.

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August 26, 2010 8:00 am

Prospectus Perspective: Acting Like Thieves or Rational Agents?

35

Matt Swartz

Are the Pirates not trying to be competitive by making a profit or just being good businessmen?

Many fans were outraged last weekend when the Associated Press, which had leaked some of the team's financial statements, reported that the Pirates had earned a profit while receiving money from Major League Baseball via revenue sharing while spending less on player payroll than nearly every other team in the sport. Apparently, fans are shocked that the people who charge them $5 for a hot dog are more interested in their money than their happiness. However, this is exactly what a system like MLB's revenue sharing is bound to do. It creates an incentive for small-market teams to earn more money by not investing in the product on the field.

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July 2, 2010 8:00 am

Ahead in the Count: Why Baseball Needs a Draft Lottery

23

Matt Swartz

Giving every non-playoff team at least a chance at the No. 1 pick would reduce the temptation to lose games.

The nation’s capital is filled with hope about brighter futures for their teams, thanks to some exciting No. 1 draft picks who appear primed to buoy Washington's frustrated sports scene.  Last year’s No. 1 overall pick in baseball, Stephen Strasburg, has been setting the league on fire for five starts now, and the Nationals added a second consecutive No. 1 pick in a row in the 2010 draft, as they now must only work out on a contract with power-hitting mega-prospect Bryce Harper.  Baseball is not the only sport where Washington has gotten the first overall pick recently. The NBA’s Wizards were lucky enough to pick Kentucky point guard John Wall last week. Of course, when I refer to them as lucky, there is a reason that I use that word.  The NBA draft uses a weighted lottery drawing to determine who gets the first pick among the 14 teams that did not make the playoffs the previous season. The famous “Olajuwon draft” of 1984 forced the reactive implementation of this system, as teams reportedly intentionally tried to lose games in an attempt to increase their chances of getting in on the glut of superstar players in that year's draft, led by Hakeem Olajuwon.

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March 11, 2010 10:47 am

Transaction Analysis: The Unsigned

23

Christina Kahrl

Transaction inaction afflicts this unhappy fistful of unemployed names of fading fame.

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January 7, 2010 12:00 pm

Checking the Numbers: Low Risk, Any Reward?

23

Eric Seidman

Sorting out the rewards of dumpster-diving to shore up big-league rosters.

Back in my sabermetrics infancy at the "Statistically Speaking" blog, one of the first articles I wrote shared the title above and investigated low-risk pitcher signings from 2002-07 in an attempt to determine how frequently these moves positively affected teams, as well as the rate of dollars per win doled out to the players in question. The article was published in SABR's By the Numbers, and in the most recent Baseball Research Journal. The initial finding was that the wins provided by low-risk pitchers cost approximately $2 million, against the expected expense double that (if not more) per win. Those who signed at minimal risk in terms of contract value but who came with greater risk in terms of expected performance were better buys than the supposed sure things.

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August 5, 2009 12:14 pm

Red Light, Green Light

29

Dan Malkiel

Once you've got the pitcher on the ropes, should you swing for the fences or hope the pitcher hangs himself?

Conventional wisdom dictates that a hitter take a pitch on a 3-0 count. The pitcher has thrown three straight balls, so why not make him throw a few strikes in a row? On the other hand, the 3-0 pitch is probably the easiest to hit, as the pitcher has no margin for error and can't afford to try anything fancy. Which is the more compelling argument?

Let's begin with some descriptive analysis: who swings on 3-0 and who doesn't? I looked at all 3-0 counts between 2003 and 2008, excluding intentional walks; below are the 20 players who swung most often (minimum 50 PA).

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November 3, 2006 12:00 am

On the Margins

0

Neil deMause

Now that some of the details of the new CBA are coming to light, Neil's able to look at a few of the finer points of how teams will now receive and spend money.

For anyone trying to analyze the new deal, though, the way it was announced was less revolutionary. All that MLB and the MLBPA signed last week was a "memorandum of understanding" sketching out the broad strokes of the deal--and what was released to the press was even less than that, effectively a summary of a summary. As a result, most of the reporting thus far has necessarily been a mix of incomplete facts, rumor, and guesswork. Maury Brown began to untangle the CBA's new revenue-sharing rules on Monday. My job today is to take a deeper look at some of the implications of the new system for how teams will actually be receiving--and spending--money.

First off, a quick recap of the rule changes, as we understand them so far. Under the old system, as Maury explained, revenue sharing consisted of two separate pieces: A "straight pool" that skimmed off 34% of every team's revenues and divided equally among all 30 teams, and a "split pool" that was levied only on the top-revenue teams and redistributed to the lowest-revenue ones. (This two-headed system was a compromise put into place during the last labor talks in 2002, when the owners wanted a straight-pool plan, and the players a split one.) The overall effect was that several hundred million dollars a year was shuffled around, mostly from the rich teams to the less-rich, but with the odd effect that teams at the top of the economic ladder actually got to keep a bit more of each dollar of new revenue (giving up 39%) than those at the bottom (who gave up 47%).

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August 11, 2004 12:00 am

Lies, Damned Lies: Deconstructing General Managers

0

Nate Silver

How did Theo Epstein get to a place where he believed that trading Nomar Garciaparra was the solution? Nate Silver examines some of the non-baseball reasons why general managers do the things they do. Warning: some football content.

The Garciaparra deal is old news now, and both Joe Sheehan and Chris Kahrl have done their usual tip-top job of breaking the trade down. But perhaps because the Cubs were the lucky beneficiaries of Theo Epstein's misstep, or perhaps because it's just so fricking strange to see Garciaparra in another uniform, like something from an EA Sports bizarro world, I've found myself thinking about the trade a lot since it was consummated.

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January 7, 2003 9:48 pm

The Daily Prospectus: Depreciation Madness

0

Derek Zumsteg

Of the many, many dumb things in the United States tax code, there's a provision that allows teams to write off the salaries of players when they acquire the team on a limited schedule as depreciation. It's an easy, fun way for them to show massive losses while they make tons and tons of delicious cash money. The write-off lasts five years, and then you sell the team for its increased value and find something else to do, like buy an arena football team, or make a nuisance of yourself in another sport.

Of the many, many dumb things in the United States tax code, there's a provision that allows teams to write off the salaries of players when they acquire the team on a limited schedule as depreciation. It's an easy, fun way for them to show massive losses while they make tons and tons of delicious cash money. The write-off lasts five years, and then you sell the team for its increased value and find something else to do, like buy an arena football team, or make a nuisance of yourself in another sport.

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I don't blame them.

Personally, I don't really care about how much money players and owners make. When I see newspaper articles that focus on what players make what money, I turn the page. I care about the game, not the financials of the game. Unfortunately, the financial side of baseball has a significant impact on the game on the field. The negotiations between the players association (the press and fans have labeled them a union; they have never asked for that description) and the owners will have a massive impact on the future of the game, more than anything that happens on the field this year. It's something we can't ignore.

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