Moneyball Questions, Moneyball Answers

A selection from Jonathan Tjarks' "The Pattern of Basketball and the 2014 NBA Draft," on the economics of player development and the buried imperative that shapes it all.
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This is an excerpt from Jonathan Tjarks' short e-book The Pattern of Basketball and the 2014 NBA Draft, which you can (and should) get here.

In the popular imagination, the final word in the “stats vs. scouts” debate came in Michael Lewis’ Moneyball. As Lewis presented it, Billy Beane and his band of mathematicians brought light to a baseball world dominated by tradition and ignorance.

Chapter Two opens with Oakland taking a high-school pitcher in the first round of the 2001 draft. An incensed Beane erupted in one motion, hurling his chair so violently it exploded against the wall. As Lewis explains, the odds didn’t favor an 18-year-old pitcher making it all the way to the big leagues.

In the MLB draft, a successful year is 3 of 50 draft picks making the major leagues. With such a seemingly low bar to clear, Beane saw an opportunity to disrupt the system. The A’s would find value at the amateur level the same way they did in the majors -- through rigorous examination of the statistics. Finding guys who could “sell jeans,” as Beane phrased it, was out.

That’s how Jeremy Brown, an otherwise nondescript college catcher, became one of the book’s main characters. Brown had put up eye-popping statistics in Alabama, but the scouts wrote him off due to his 5’10 225 frame. As one put it, “Brown wears a very large pair of underwear.”

Lewis turned it into a morality tale -- just because Brown didn’t look like a major league player didn’t mean he couldn’t become one. Jeremy Brown became every kid ever picked last in gym class, every person who was judged for how they looked and not how they performed. While the scouts were judging a book by its cover, Beane and his disciples could look deeper, picking players on merit, not appearance.

The book ends with an apocryphal story of Brown in the minor leagues, tripping over himself trying to extend a line-drive into a double, when he had actually crushed the ball over the fence. Brown, even while tearing up the lower minor leagues, was still learning to believe in himself.


Lewis had planned to write a sequel a few years down the line called Underdogs, catching up with Brown and the A’s other draft picks once they’d reached the majors. Instead, the idea fizzled out when Brown retired from baseball after only 10 MLB at-bats. As for the high-schooler drafted in 2001, whose selection so incensed Beane? Jeremy Bonderman is still in the majors, almost 15 years later. He is a relief pitcher for the Detroit Tigers and has thrown over 1,200 MLB innings.

In and of itself, Bonderman’s success and Brown’s failure doesn’t mean anything. Baseball players fall short of the majors for any number of reasons. Nevertheless, a closer look at Brown’s profile coming out of Alabama reveals the flaws in the process behind the pick, regardless of what the eventual outcome was.

It is very, very hard to find a major league catcher. Not only do they need the stamina to crouch and catch 95 MPH baseballs for nine innings in the brutal heat of a summer day, they have to call the pitches, control the other team’s running game AND they have to be a good hitter to boot.

Joe Mauer is a prototype for the position. A strapping 6’5 230 athlete who was also the No. 1 quarterback recruit in his high school class, Mauer was the No. 1 overall pick of the Minnesota Twins in the 2001 draft. An MVP and six-time All-Star, Mauer has made a fortune selling shampoo on TV and wouldn’t look out of place playing catch with Brett Favre in one of those Wrangler ads.

Catcher is different than first base, where Oakland famously got away with Scott Hatteberg’s bad defense. What a catcher does behind the plate is way more important than what he does at bat, which is why very few big league catchers are good hitters.

Brown didn’t have the physical tools to play the position, nor did he have the tools to play any other physically demanding position. To make the major leagues, he would have to do it as a first baseman or DH, where the offensive standards were much higher. His age explains his impressive A-ball stats -- he was three and four years older than his peers who had been drafted out of high school. As time went on, the younger guys with more tools learned Brown’s tricks and the No. 35 overall pick in the 2002 draft was no longer much of a prospect.

To be fair, it’s hard to believe that Beane, who ran one of the best farm systems in baseball, didn’t know this. After all, none of the scouts he employed had Brown among the top 1,000 prospects in the country. A careful read of Moneyball explains Beane’s thought process:

Other teams will assume that Billy Beane is interested in all these oddballs because he can't afford normal players, and Billy encourages the view. And it's true he can't afford anyone else. On the long cafeteria table in front of Billy sat an invisible cash register, and inside it the $9.4 million his owner had given him to sign perhaps as many as thirty-five players. The A's seven first-round picks alone, paid what their equivalents had received the year before, would cost him more than $11 million.

When an MLB franchise loses a star player in free agency, like Oakland did with Jason Giambi, Johnny Damon and Jason Isringhausen in 2001, they are “compensated” with an extra pick in the first-round of the draft. It’s a way to level the playing field for small-market teams.

The $11 million the A’s picks needed was a lot of money, but it hardly compared to Giambi's $120 million deal with the Yankees. The draft is a long-term investment that pays off over a decade -- a small-market team gets six years of cost-controlled play from a star like Giambi and a first-round pick to start the cycle over again.  

The A’s owners, though, were about short-term revenues, not long-term investments. Instead of properly funding their franchise, they gave Beane a limited budget for talent acquisition and told him to make it work. Their cries of poverty, meanwhile, were nothing more than convenient fiction.

While MLB financials are notoriously opaque, we can make a reasonable estimate of the A's revenues in 2001 and 2002. They drew 2.1 million fans to the gates both years and had payrolls of $33 and $39 million. Add local and national TV deals as well as revenue sharing from richer clubs and the numbers start adding up. The Biz of Baseball estimates they had revenues of $90 million in 2001.

None of that, though, gets to how much money the A’s owners really made. In 1995, Stephen Schott and Ken Hoffman purchased the franchise for around $85 million. In 2005, they sold it for $185 million. That's the money that's never talked about -- the money the owners receive for being part of a protected monopoly.

Because they are insulated from competition, the Oakland A's aren't really a business at all. You can’t open a second MLB franchise in Oakland -- the A’s are the only game in town. As a result, the owners are more stewards of the game than businessmen. As long as interest in baseball grows, there is no way for them to lose money.

All those first-round picks in 2002 should have been the backbone of great Oakland A’s teams in the mid 2000’s, after the previous generation of home-grown stars -- Tim Hudson, Barry Zito, Mark Mulder, Eric Chavez and Miguel Tejada -- left for greener pastures. Instead, Schott and Hoffman lined their own pockets with the profits made by the current team instead of reinvesting them back into the organization. At that point, all they needed were a few clever folks in middle management who could conjure up some formulas that could justify short-changing their labor force.

Later in the book, Paul DePodesta, one of the A’s assistant GM’s, tells Lewis that Brown doesn’t resemble a single player in MLB. Maybe that meant Oakland had cracked the code for identifying young talent or maybe it meant they were being asked to make a dollar out of fifteen cents. Other teams weren’t beating down Brown's door -- the A's could have drafted him in the 15th round.

Advanced statistics, rather than a revolutionary way to evaluate young talent, became a tool to take money from young players and give it back to the owners -- “moneyball” can be read as “labor costs,” here. If that’s the answer, the question is “how can I justify giving my employees less money?”

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