Play Ball, With Informed Intelligence

Even if, inexplicably, you occasionally think about things other than Major League Baseball, consider this: Why are many premier free agents, particularly sluggers and starting pitchers, unsigned even while we are hearing the loveliest four words, “Pitchers and catchers report”? The Major League Baseball Players Association angrily says some teams are more interested in economizing than in winning. The real explanation is that teams are intelligently aligning their behavior with changing information.

Teams increasingly behave alike because increasingly they think alike. They all have young graduates of elite colleges and universities whose data support the following judgments:

Players become eligible for free agency after six years of major league service, which comes close to coinciding with the beginning of the downside of most careers. Besides, baseball has become younger since banning performance-enhancing drugs (amphetamines as well as steroids) that extended some careers. Thirty-two is the new 36.

Baseball today is played as an all-or-nothing, strike-out-or-home-run game. This will not last — baseball strategy, like everything else in life, constantly evolves — but for now more batters are elevating their swings’ trajectories. So, the market is saturated with home-run hitters, some of whom have spurned nine-digit offers. Their agents should have anticipated softening demand for a surplus commodity.

Baseball “analytics,” a.k.a. information, demonstrate that most starting pitchers are most effective when constantly throwing hard, and are significantly less effective the third time through the opponent’s lineup. Hence relief pitchers are increasingly important — and increasingly well paid in even today’s severely rational market.

Several high-revenue, high-spending teams (e.g., the Dodgers, Yankees, Red Sox) might be saving their money for a splurge eight months from now on the best free-agent class ever — the Nationals’ Bryce Harper, the Orioles’ Manny Machado, the Dodgers’ Clayton Kershaw and others. Furthermore, in the collective bargaining agreement negotiated just 15 months ago and running through 2021, the MLBPA agreed to a competitive balance tax of 20 percent on any portion of a payroll over $197 million, with the rate rising to 30 and 50 percent on second and third consecutive seasons over the threshold. This is what the MLBPA knew it was designed to be: a disincentive for spending, especially by the wealthiest teams, for the purpose of enhancing competitive balance.

MLB and the MLBPA collaboratively devised a system whereby the teams with the worst records get advantages in drafting young talent. The Cubs and Astros lost 288 and 324 games, respectively, in recent three-year spans, reloaded, then won the 2016 and 2017 World Series, respectively. Their fans, and most teams, think those two successes validated the strategy of accepting short-term pain for long-term gain. Not, however, for constant success.

Competitive balance exists when every well-run team has a regularly recurring reasonable hope to be among the 10 teams in the post-season. But “regularly recurring” does not mean “uninterrupted.” Change is a baseball constant as veterans’ careers pass their apogees and younger players’ approach theirs. So, cycles of success are, if not inevitable, always the norm. In the previous 25 seasons, 22 of the 30 teams have played in the World Series and 14 have won it. No team has won consecutive World Series since the 1998-2000 Yankees.

The Cubs’ and Astros’ successes have encouraged other teams to engage in what the MLBPA says is a “race to the bottom.” Actually, teams that are tearing down old and mediocre rosters are accepting a plunge in order to produce momentum for a surge to the top. What fans most dislike, and what constitutes baseball malpractice, is consistent mediocrity — teams not talented enough to play in October but not bad enough to receive the right to draft the best young talent.

Before 1994’s cataclysm — the strike-shortened season, the canceled World Series — baseball had suffered seven work stoppages (including spring training) in 22 years. Since then there have been none, baseball has gone from a $2 billion to a $9 billion-plus business and the average salary has risen from $1.2 million in 1994 to $4.1 million in 2017, when 50 percent of MLB revenues went to players’ salaries and benefits (56 percent including minor-league signing bonuses and salaries).

Baseball, like the American economy generally in this era of high-quantity, high-velocity information, is more efficient at pricing assets and allocating resources than it was until recently. This intensified dynamic has winners and losers, but many more of the former than the latter. And to oppose this churning, in the national pastime or the nation itself, is to oppose the application of informed intelligence.

The Patriot Post® · Play Ball, With Informed Intelligence