The 2002 Oakland Athletics, pegged by baseball insiders as a mediocre club at the outset of the season, expose much of the sport’s conventional wisdom as flawed when they post a 102-60 regular season. They do this with a roster composed of players who have largely been overlooked by the insiders—pitchers with unusual pitching technique, fielders who are overweight or can’t run quickly, and hitters who struggle to hit home runs. In short, the 2002 Oakland A’s are a team of players who don’t look like players at all.
Baseball’s old guard—a consortium of coaches, scouts, general managers, owners, former players, and sports journalists—have rigid conceptions of what a good player is and how teams are supposed to win games. But the success of the 2002 Oakland A’s proves that much of this conventional wisdom, propagated by baseball’s traditional gatekeepers, is hopelessly wrong.
Moneyball: The Art of Winning an Unfair Game is the story of this team and how an iconoclastic, convention-defying general manager named Billy Beane manages to turn the baseball world on its head and call into question everything that everyone thought they knew about the game.
Let’s start back in 1980. Billy Beane is an extraordinarily talented high school baseball player—immensely talented and fiercely competitive, he is an all-around natural athlete. His rapid ascent to the major leagues seems all but assured.
But Billy also has dreams of going to Stanford University (where he had been admitted) and getting a world-class education, dreams that will be closed to him if he decides to go to the majors. He is, in fact, highly ambivalent about embarking on a career as a professional baseball player.
Nevertheless, he is drafted in the first round by the New York Mets in 1980 as one of their top prospects, signing with the club for a $125,000 bonus before being assigned to one of their minor league affiliates. He sacrifices his dream of studying at Stanford, which promptly rescinds his offer of admission once he decides to go pro instead of playing for the university’s baseball program.
Once he becomes a professional player (albeit in the minor leagues), he begins to crack under the enormous expectations that have been placed upon him and is emotionally unable to cope with failure on the field. Although endowed with natural athletic ability and a keen understanding of baseball, he is unwilling to be patient with the game and is paralyzed by his fear of failure: a failure which he had been told throughout his young career he would never experience due to his talent.
Billy has a middling MLB career throughout the 1980s, in the course of which he is traded from the Mets to the Minnesota Twins to the Detroit Tigers, and finally, to the Oakland A’s. In 1990, he accepts his status as a draft bust, retiring as a player that spring. After walking off the field, he takes a job with the team’s front office, in the lowly position of an advance scout, a shocking move for a former blue-chip baseball prospect.
As a scout, and eventually as GM, Billy will butt heads with the men who make up the scouting department. Scouting is the stronghold of baseball conventional wisdom, of men who believe that they can predict a player’s future success in the majors simply by observing with their own eyes how well they can hit a ball, throw a pitch, or steal a base, even if they only see that player play a handful of times. To Billy, these are the same men whose preference for subjective wishful thinking over objective analysis had raised his expectations, waved away his obvious psychological flaws, and set him on a path to failure.
As a scout, Billy is determined to never repeat their mistakes. He learns from both their failure and his own. He looks for players whose statistical performances indicate a likelihood of success in the major leagues. He is determined to never draft the next Billy Beane.
In 1995, as Billy Beane is working his way up the ranks of the Oakland organization, the new owners of the A’s demand that the team drastically reduce payroll. The team must now economize, making sure that every dollar spent on players contributes to on-field success.
This occurs during an era of skyrocketing player salaries, driven by the rise of free agency, which profoundly changes the economics of professional baseball. Rich teams like the New York Yankees and the Boston Red Sox are able to spend unlimited sums in order to acquire the biggest stars on the free agent market. But relatively poor teams like the A’s are forced to take a new approach to player acquisition, looking for players who are undervalued by the market and can be gotten on the cheap.
At this time, many of baseball’s most widely used statistics to evaluate baseball players are coming under fire. These critics (including the A’s general manager as well as a baseball writer named Bill James) note, for example, that team batting average is overrated because it overlooks the importance of walks to a team’s total offensive output. Likewise, James criticizes the RBI as a product of luck: a batter must have the good fortune to be at bat when other players are already on base to be able to bring them home with a hit. It is a matter of luck to even have the opportunity to score an RBI.
James contrasts this with statistical measures that had been overlooked by professional baseball. On-base percentage, he argues, has a better correlation with run production than batting average, because it accounts for all the ways a player can get on base and contribute offense—: including walks.
Despite this, players with high batting averages and low error counts are highly valued, while players with lots of walks and a high on-base percentage (but who aren’t flashy sluggers with high batting averages) are deeply undervalued. Yet teams continue making poor (and expensive) personnel decisions based on flimsy information, despite the availability of better data.
The world of professional baseball is hostile to this statistics-based criticism, refusing to take seriously ideas from which they would clearly benefit. But Bill James does have one devoted reader, who soon puts his ideas into practice at baseball’s highest level—Billy Beane.
In 1997, Billy Beane becomes GM of the Oakland A’s. He is determined to use sabermetrics to build a successful team with very little money, and to do so, must look for underpriced players. By 2002, he assembles a sabermetric-focused team in the front office, most notably his Assistant GM Paul DePodesta, who had graduated from Harvard with a degree in economics and has never played professional baseball. Billy is a micromanaging GM, deferring very little in the way of trades, drafting decisions, or even on-field tactical decisions to his scouting staff or even the manager.
Going into the 2002 draft, Billy’s mandate is to acquire effective players on the cheap—and the draft is the best way to do this. When a team drafts a player, they acquire the exclusive rights to sign him, after which they have exclusive rights to his first seven years in the minor leagues and six in the majors. This gives the drafting team enormous leverage in the contract negotiation process, enabling savvy drafters to get good players for a fraction of what they would cost on the free agent market.
Billy has been burned in previous drafts by his scouting staff’s insistence on drafting high school players over college players, despite the objectively better performance history of the latter group. Based on his own experiences as a high school draftee, Paul DePodesta’s statistical analysis, and his insights from reading Bill James, Billy Beane establishes a new rule for his club going into the 2002 draft: no high school players.
Billy and Paul create a shortlist of 20 players they wish to select, many of them overlooked and undervalued, but nevertheless, extremely talented college players with a talent for getting on base. But getting most of them, or even some, is difficult. Whether or not they are still available depends on what the other teams do. The picks any team ends up with depends on a combination of prioritization, strategy, and pure luck.
At the top of Billy’s shortlist are two amateur players—fielder Nick Swisher and catcher Jeremy Brown. Swisher is one of the relatively few players about whom both the traditional scouts and the sabermetric-focused newcomers are in agreement: the young player is a surefire MLB star.
Brown, on the other hand, is a highly unconventional pick. Most of the scouting on Brown assigns him a very low place in the draft, if, indeed, he is to be drafted at all. Although he has what appear to be great stats coming out of college, most of the scouting world (including the A’s own staff) has dismissed him as being too heavy to make it as a major league baseball player.
As the draft unfolds, Billy and his staff can’t believe their good fortune. As the rest of the league makes shortsighted draft choices (including many high school players), more and more of the A’s targeted players are available. The team snags 13 of the 20 players they had targeted, including Jeremy Brown (typically, getting three or four is considered a success).
Billy Beane and Paul DePodesta profit from the irrationality of their competitors, who overvalue athletic attributes like speed and strength which aren’t necessarily effective at winning baseball games. The A’s, instead, select players using a process of rational, scientific, data-based analysis, which is better at predicting their likelihood of succeeding in the major leagues.
As a cash-strapped club, the Oakland A’s adopt a practice of developing players on their own through the draft and then trading them a few years later when they become free agents, after which such players will be too expensive to retain. After the 2001 season, they lose some major stars—through trades and free agency—whose contracts they are no longer able to afford.
Despite the team’s lack of financial resources, the A’s are remarkably successful on the field under Billy’s leadership. The 2001 A’s finish 102-60. The 2002 iteration of the team goes on to a 103-59 record, good for first place in the American League West Division and second overall in the league, despite having what appears to be an inferior roster.
They achieve this through shrewd, value-driven management of their most important asset: the players. No one on the team is treated as irreplaceable. DePodesta is able to quantify the net runs each player contributes to the team (by adding runs through offense and preventing them through defense). Every action taken by a player has an expected run value.
Taking this a step further, DePodesta calculates that the team will likely need to win 95 games to make the playoffs. To win 95 games, they will need to have a net run differential of approximately +135. And this makes the team’s task a lot clearer. They need to find a combination of players whose net run production will offset the loss of Isringhausen, Damon, and Giambi, plugging in those holes to get the run differential they need.
The team is simply the sum of its parts. While certain star players obviously contribute more runs than others, their output can be replicated. The production of a Giambi might not be easily replaced by another single player, but it can be replaced by a combination of other players, each of whom can do their part to fill in the gap left by his departure.
They don’t need to find the total package in a new player—they just need to find a fraction of that package, which will form part of the whole when joined with other players. They aren’t looking for the next Giambi, nor, frankly, can they afford to. They need to find the parts of Giambi, which can be obtained for far less.
Isringhausen and Damon had been overvalued players—Isringhausen because he was a closing pitcher (who only came into games once the outcome was already likely decided) and Damon because he had a poor on-base percentage. Thus, Billy is able to trade them off for more than they’re worth or let them walk away in free agency and allow another team to overpay them. The loss of Jason Giambi is tougher, but not impossible, to replace.
The A’s bring in Scott Hatteberg, David Justice, and Jeremy Giambi (Jason’s younger brother). These are players whom most of the rest of the league has written off as inadequate or defective, which, of course, is why the A’s are able to so easily acquire them. Yet they all boast above-average on-base percentages, largely due to their patience at the plate and ability to draw walks.
DePodesta stresses the importance of process over results. By adhering to a sound process, the team is likely to win more games than they lose over the long haul of a 162-game season, even if individual games might be lost due to chance events.
The 2002 trade deadline is on July 31. Billy Beane excels at the trade deadline. Since 1999, his A’s have always performed remarkably better in the second half of the season, after the deadline, than they had in the first half. The A’s organization has quantified the value of every player in their system, as well as every player in the systems of the other teams. Billy’s advantage over his rival GMs is better information: he has a better understanding of true value, which enables them to get more from trades than they give up.
At the trade deadline, weak teams that are no longer in playoff contention are looking to offload their stars, creating a glut in the market which lowers their price. Billy will be able to acquire players that he could never afford at the beginning of the season.
He also uses the trade deadline as an opportunity to get rid of his own players whom he believes are overrated by other GMs. Billy deals the overvalued Carlos Pena to Detroit in exchange for ace pitcher Jeff Weaver and $600,000 in cash. He then trades the pricey Weaver to the Yankees (who think nothing of his $2.6 million salary) in exchange for two excellent prospects and the highly underrated pitcher Ted Lilly. It is a classic Beane trade, trading an inferior player for a superior one, while cutting costs.
The A’s apply their sabermetric approach to finding pitchers as well as hitters. Instead of valuing pitching velocity for its own sake, Beane and the A’s believe that pitchers ought to be judged solely on their success in making outs, preventing runs from being scored against the team, and contributing to the team’s positive run differential.
Around this time, a new method has been created to better evaluate pitchers—defense-independent pitching statistics (DIPS). DIPS eschews measurements like hits and earned runs against, as they depend too much on fielding to be of much use in judging a pitcher’s performance. Instead, DIPS rates pitchers mainly on the basis of walks, home runs, and strikeouts, aspects of the game for which the pitcher was solely responsible.
One DIPS standout for the A’s is Chad Bradford, a “submariner” pitcher who costs the team a mere $237,000 per year. With his unusual throwing style, Bradford has been overlooked by most teams, but the A’s see nothing but upside in him. Even the White Sox, who had drafted him, attribute his early success with them to mere luck—good major league pitchers simply don’t throw the way Bradford does. But Billy Beane rejects this subjective and superficial discounting of what is clearly a talented player, and he acquires him from the White Sox before the 2001 season for nothing more than the price of a minor league catcher.
After Billy’s wheeling and dealing at the trade deadline, the A’s are reborn, going on to qualify for the playoffs and win the AL West Division with a 2002 regular season record of 103-59—just behind the Yankees for the best record in all of Major League Baseball. Their hot streak after the deadline includes what was then an American League-record 20-game winning streak. Their strategy of investing in unglamorous on-base percentage heroes rather than flashy home run hitters yields great results on the field.
The team’s success is a testament to their value investment strategy in building the team and a stunning rebuke to decades of conventional wisdom about what makes a winning ballclub. Still, many baseball traditionalists, particularly former player-turned-TV-commentator Joe Morgan, appear to be actively rooting against the A’s in the playoffs. They seem to not so much disagree with Billy’s ideas about how to win baseball games as to be outright offended by them. Winning games without flashy home run sluggers or lighting-speed pitchers, to these keepers of baseball’s conventional wisdom, is a violation of the natural order of things, a perversion of the noble tradition and spirit of America’s national pastime. Morgan is part of an insider’s club of pundits, writers, scouts, and ex-players, which never seems to face accountability for its failures. They are a social club that values loyalty over competence.
Unfortunately, the A’s fall in the first round of the playoffs, losing three games to two in a best-of-five divisional series to the Minnesota Twins. Although the naysayers hold this up as proof that sabermetrics and on-base percentage are not what makes a successful baseball team, DePodesta attributes the playoff failure to the small sample sizes of the playoffs, in which random on-field events have an outsized impact on the outcome of a series. He notes that during the regular season, the A’s allowed an average of only 4 runs per game, but that they allowed 5.4 during the series against the Twins, largely due to two bad games by pitcher Tim Hudson.
After the season, the Boston Red Sox offer Billy a five-year, $12.5 million contract to take the GM job in Boston, but Billy declines. Out of high school, he had made the decision to sign an entry-level contract with the Mets. It was the only decision he had ever made for money—and it had been the worst decision of his life. He vows that he will never do that again.
Billy has finally fulfilled his destiny as a winner, but in the front office rather than on the field. In his 20+ year journey through the world of professional baseball, Billy has finally proved his value—and there is no putting a price on that.
Anyone involved in playing professional baseball or managing a professional team cannot escape the weight of the sport’s history. As America’s national pastime, it’s been played in the United States since before the Civil War. And this long and storied tradition has created a century and a half’s worth of conventional wisdom about best practices and how the game ought to be played.
Baseball’s old guard—a consortium of coaches, scouts, general managers, owners, former players, and sports journalists—have rigid conceptions of what makes a good player and how teams win games. But the central insight of Moneyball is that much of this conventional wisdom, propagated by baseball’s traditional gatekeepers, is hopelessly wrong.
The 2002 Oakland Athletics, pegged by baseball insiders as a mediocre club at the outset of the season, exposed much of the sport’s conventional wisdom to be bunk when they posted a 102-60 regular season. They did this with a roster composed of players that had largely been overlooked by the insider’s club—pitchers with unusual pitching technique, fielders who were overweight or couldn’t run quickly, and hitters who barely knew how to belt a home run. In short, the 2002 Oakland A’s were a team of players who didn’t look like players at all.
Moneyball is the story of how this team and its general manager, Billy Beane, turn the baseball world on its head and call into question everything that everyone thinks they know about the game. But to understand how Billy Beane proves the naysayers wrong, we need to take a closer look at the man himself and understand why his own baseball background and experiences influence the way he assesses baseball players.
(Shortform note: Moneyball has been a controversial book within the baseball world since its original publication in 2003. Some critics claim that it underestimates the achievements of traditional, non-sabermetric scouting: Barry Zito, Tim Hudson, and Mark Mulder for example, were great players for Oakland during the 2002 season, but are barely mentioned in the book. None of them were regarded as unconventional draft picks or diamonds in the rough—they were, instead, quite conventional baseball stars. This criticism accuses author Michael Lewis of picking and choosing his examples to make the sabermetric approach look prescient and the traditional, more subjective approach look ignorant and short-sighted.
Perhaps more significantly, the issue of performance-enhancing substances is entirely unmentioned. While baseball’s steroid scandal had not yet become a major story in 2003, it is now known that Jason Giambi and Miguel Tejada, two critical A’s players during the Moneyball era, were using PEDs. Given that Billy Beane was an acknowledged micromanager, overseeing all aspects of team operation and policy, this does raise important questions about what he did and didn’t know at the time.)
We start our story in 1980. Billy Beane is an extraordinarily accomplished baseball player in high school. In the late 1970s, he is a star outfielder for his high school team in southern California. Professional scouts travel from all over the country to see him play. To the naked eye, Beane is the living embodiment of everything that ought to predict future success in Major League Baseball.
He is immensely talented, fiercely competitive, and an all-around natural athlete. With his All-American good looks, he is the very model of a major league All-Star. Ahead of the 1980 Major League Baseball Amateur Draft, he is one of the most highly touted (and coveted) young prospects. His rapid ascent to the major seems all but assured.
The only person who is ambiguous about Billy Beane’s future as a professional baseball player is Billy Beane himself. Although he is sure to be drafted in the first round and signed to a major league contract, Billy isn’t sure that he wants to devote his adult life to playing baseball. For the scouts who compete for the opportunity to draft Billy, this should be the first sign that the high school star might not live up to the enormous expectations that have been placed upon him. Billy also has dreams of going to Stanford University (where he has been admitted) and getting a world-class education, dreams that will be closed to him if he decides to go to the majors.
Nevertheless, the lure of playing Major League Baseball proves too strong. In 1980, he is drafted by the New York Mets, using the second of their two first-round picks that year (the team uses their first pick on future Hall of Famer Darryl Strawberry). The team helps Billy briefly overcome his initial ambivalence about playing baseball, flying him out to New York to meet the rest of the organization. Impressed by what he sees and overwhelmed by how his reputation already seems to precede him among the players and coaches he meets, Billy agrees to sign with the club for a $125,000 signing bonus.
This contract puts Billy’s professional future in the hands of the Mets for the next several years. Under league rules, he has no right to play for any other organization: the only way he can play anywhere else is if the Mets trade him or buy out his contract. After signing on to this modern-day form of indentured servitude, Billy is assigned to one of the Mets’ minor league affiliates.
Billy gives up a great deal to go professional, signing away his rights to offer his baseball services on the open market, for a relatively small sum of money given his draft position. Sadly, his parents are soon swindled out of Billy’s signing bonus when they invest in a dubious real estate scheme. He also sacrifices his dream of going to Stanford, where he initially believes he will be able to attend classes during the off-season. But this is also not to be. When the university finds out that Billy has signed with the Mets and won’t be playing for their baseball program, they promptly rescind his offer of admission.
Billy Beane is now just a regular minor league ballplayer, like any other. His only professional path forward is now in baseball. And it is no longer a path he wishes to walk.
Billy Beane is cursed by his talent and the high expectations heaped upon him. After thoroughly dominating the competition in high school, coaches, agents, and general managers have assured him that he will easily make the leap to become a major league star. But he doesn’t.
Perhaps because of his intensely competitive nature, or the weight of expectations, Billy is emotionally unable to cope with his first brushes with failure on the field as a professional. When he strikes out, he smashes his bat in frustration in the dugout. He becomes known throughout the minor leagues for his wild emotions. Although endowed with natural athletic ability and a keen understanding of baseball, he is unwilling to be patient with the game and is paralyzed by his fear of failure: a failure which he has been told throughout his young career he would never have to experience.
The emotional toll of the lofty expectations placed on Billy shows in his statistical performance. A dominant hitter in high school, he posts a paltry batting average of .210 in his first year in the Mets’ affiliate club in Jackson, Mississippi. The next year, he hits for .220, another mediocre display. Billy is failing, in large part because the Mets have set him up to fail by ignoring his very real ambivalence about becoming a professional player and brushing aside his performance issues with blanket reassurance that he will succeed no matter what.
Billy’s struggles in the minors are compounded by the fact that he is playing alongside Darryl Strawberry and Lenny Dykstra, two players destined for greatness in the majors. These players are, before his eyes, fulfilling the potential that already seems to have been lost in Billy.
Strawberry and Dykstra are Billy’s psychological polar opposites. Both men are relentlessly focused on succeeding at baseball, and little else. They have none of Billy’s ambivalence, and none of his crippling fear of failure. Playing in the Texas League alongside Billy, Strawberry is named the league’s most valuable player. Seeing a player whose overall draft position had been only slightly higher than his own—and who many scouts had thought was actually his inferior—achieve such wild success as a professional is agonizing for Billy.
Lenny Dykstra, meanwhile, is mentally unflappable. Billy later describes Dykstra’s psychological makeup as being ideally suited to play professional baseball. Dykstra refuses to let every failure at bat send him into a Beane-like rage, instead drawing strength from every success. Dykstra understands that baseball is about the long-term, not the short-term.
Any given at-bat is relatively unimportant; if a player falls to pieces after every out, they will not last in the game very long. After all, no one ever hits over .500 over the course of a season—the most likely outcome of any given at bat is an out. The key is to take it in stride and focus on one’s overall game. Dykstra learns this quickly; Billy never does.
Billy, despite his struggles in minor league baseball, eventually receives his call-up to the majors. But even when he gets his big break, he never lives up to his once-unlimited potential.
Although he has occasional flashes of brilliance, he is still hamstrung by his mental hang-ups, never developing the mental toolkit that players like Strawberry and Dykstra have to overcome the inevitable brushes with failure. Coaches and scouts are puzzled by Billy’s inability to achieve consistent success in the majors.
Throughout a middling MLB career in the 1980s, Billy settles into the role of a journeyman outfielder for the Mets. He is occasionally called up from the minors by the big club and even manages to stay on the roster for long stretches of the season. But it always proves illusory. For a few games, he shows some signs of being the player that everyone once thought he had been, raising false expectations that he has finally hit his stride as a ballplayer. But then he hits one of his characteristic slumps, during which he is seemingly unable to hit anything. This activates all of his psychological triggers about failure, which causes him to fail even more. He is caught in this vicious feedback loop, with no way out.
Nothing helps—praise from coaches when he scores a hit, admonishment when he strikes out, even the intervention of sports psychologists (whose theories and practices Billy later dismisses as quackery) are all to no avail. Inevitably, he is sent back down to the minors.
The cycle repeats several times throughout his tenure with the Mets organization, until he is traded to the Minnesota Twins in 1986. For the remainder of his disappointing career in the majors, he bounces around between MLB teams (he is later traded to the Detroit Tigers) and their minor league affiliates. His last stop in the majors is with the organization where he would truly make his mark on the baseball world, though not as a player—the Oakland A’s.
In the end, Billy realizes that his mental hang-ups stem from his ambivalence. As fiercely competitive as he is, Billy does not want to be a professional baseball player, and probably never did. He and baseball are simply a bad match.
By 1990, Billy is 27 years old with a reputation firmly established as a draft bust, a player who seemed to be destined for glory on the field, but never panned out in the majors. He is at a crossroads in his life. He needs to make a change.
That spring, he takes the inevitable next step and retires as a player. What he does next shocks everyone in the Oakland organization. He walks into the front office and asks for a job as an advance scout, a position in which he travels ahead of the team and observes the play of upcoming opponents.
The move from player to scout is almost unheard of in the baseball world, akin to a film star walking off set and applying for a job as a crew member. The A’s general manager at the time, Sandy Alderson, hires Billy only because of the low regard in which he holds advance scouting—since he believes they contribute little of value to the organization, there is no harm in letting Billy have the job.
An advance scout is considered to be a lowly job for a former player to take. The advance scouting staff is made up of men who had never played in the big leagues, but desperately wished they had. To them and to everyone else, the idea of Billy throwing in the towel during what should have been his prime playing years is ludicrous. They would have done anything for the opportunities Billy had—yet here he is, giving it all up. But it is as an executive that Billy will leave his indelible mark on baseball and prove that he understands the game far better than most.
The scouting office is the stronghold of baseball conventional wisdom, of men who believe that simply observing with their own eyes how well a player hits a ball, throws a pitch, or steals a base is the key to predicting his future success in the major leagues—even if they only see him play a handful of times. The scouts prefer the subjective to the objective; the big, flashy one-off play to the sober analysis of meaningful statistics. In short, they are the same type of men who had irrationally raised Billy’s expectations, waved away his obvious flaws, and set him on a path to failure.
As a scout, Billy is determined to never repeat their mistakes. He learns from both their failures and his own. He looks for players whose statistical performances demonstrate a likelihood of success in the major leagues. In short, he makes sure to never draft the next Billy Beane.
Billy Beane enters the front office at a true inflection point for the Oakland A’s and for baseball as a whole. Much of what was thought to be sacrosanct about the game is being questioned. The traditional ideas about what makes a winning team are being challenged and proven wrong.
In 1995, as Billy is working his way up the ranks of the front office, the Oakland A’s are sold to real estate developers Steve Schott and Ken Hofmann. This signals a shift in how the entire organization will come to think about acquiring and managing players. The previous owner had been willing to spend as much as needed to field a competitive team, seeing ownership of a major league team as more of an act of civic duty than a profit-yielding investment. In fact, the 1991 A’s had the highest team payroll in all of baseball.
But the new owners adopt a very different approach. For them, owning the A’s is an investment—one that they expect to pay off. Their new mantra is to reduce costs as much as possible, and that means cutting team payroll to the bone. Gone are the days of free spending. The team must now economize, making sure that every dollar spent on players demonstrably contributes to on-field success.
Oakland’s new austere, no-frills approach to running the team occurs during an era where the economics of professional baseball are undergoing profound change. The change is driven by a few key factors, all of which make smart drafting of amateur players essential for teams looking to rein in costs.
For big-market teams like the New York Yankees and Boston Red Sox, these trends do little to change their approach to running a big-league club. Their deep-pocketed owners are willing and able to spend whatever they need to in order to acquire the biggest stars on the free agent market. But for relatively poor teams like the A’s, they change everything, placing a premium on finding value in the type of players in whom no one had seen value before.
Sandy Alderson, general manager of the A’s when Billy Beane makes his transition to the front office, is considered a baseball outsider by many within the organization, mainly because he has never played baseball himself. But because he has never played, he is unbiased and unattached to baseball’s customary way of doing things and open to new approaches to the game.
He observes that most of the things baseball insiders love about the game and value most in players—particularly big, flashy plays like home runs and stolen bases—do little over the course of a season to help the team score runs and win games. Simply put, most of the things major league baseball teams do don’t actually work.
Because after all, the purpose of a baseball team isn’t to compile home runs or a high batting average: it’s to score runs and win games. Therefore, every player and every play ought to be judged solely on the basis of how it contributes to the win column. Alderson, now in charge of spending the team’s suddenly scarce funds, needs to ensure that every penny is spent wisely.
Alderson pioneers a scientific, data-driven, and top-down approach to managing a baseball team. He thinks little of the opinions and collective wisdom of the old baseball men and is dismissive of the yardsticks by which they measure performance.
He is particularly critical of batting average statistics, and the way in which coaches and scouts treat them as the gold standard for success. Batting average is simply the ratio of hits to total at bats. If a player has five plate opportunities in a game and scores two hits, he has a batting average of .400 (2 hits/5 at bats). Yet in running the numbers, Alderson sees that total team batting average, for all the emphasis the old guard places upon it, bears little relation with total runs scored. Alderson concludes that a high batting average does little to actually win games.
To drill a bit further, there is a reason that batting average has such a weak correlation with runs—hits are not the only way that a batter can get on base. Batting average overlooks the importance of walks to a team’s total offensive output.
The batting average statistics sharply undervalue a player’s ability to get on base by drawing walks. Players who are good at this aren’t flashy home run hitters, but they contribute heavily to runs scored and, most importantly for Alderson, are deeply undervalued (and underpriced) by most teams. Drawing walks is a subtle skill—it relies on the hitter knowing when not to swing, being patient, and studying a pitcher’s throwing tendencies.
This is at odds with the traditional view of walks, namely, that they are entirely produced by pitcher error, and that the batter has no agency in creating them. But Alderson rejects this passive view, arguing that a hitter plays a significant role in drawing walks. Traditional baseball’s free-swinging ethos, meanwhile, conditions players to look for an opportunity to belt one out of the park, rather than contributing to team offense through walks.
Alderson sees that another statistic provides a much better prediction of offensive output: on-base percentage. This measure tells you how often a batter got on base, including by walks. Essentially, on-base percentage is the probability of a batter making an out. And this is the measure that Alderson seeks to spread like gospel through the Oakland organization.
There is a simple, strong logic to Alderson’s new philosophy. During a team’s hitting portion of an inning, anything is possible before they’ve made three outs; thus, the primary goal of the offense should be to avoid making outs. Any play which increases a team’s chances of making an out is bad; any play which decreases the chances of making an out is good. Therefore, increasing on-base percentage should be the primary focus.
All of this is a radical departure in thinking on Alderson’s part, one that sets him apart from the old baseball minds within his organization, including then-manager Tony La Russa. The latter believes that scoring is a product of a series of flashy plays by individual players; Alderson believes that scoring is a team-wide process. Every ball, every walk, every hit, every avoided out contributes incrementally to runs.
Alderson is evangelical in his emphasis on on-base percentage. While he sees some success in implementing his ideas in Oakland’s minor league affiliates, his philosophy hits a brick wall with the big club in Oakland, where traditional attitudes still prevail. Alderson’s revolution remains incomplete.
Indeed, the very presence of Billy Beane on the roster, a player who liked to swing at every pitch, shows how little currency Alderson’s ideas have at this time. But Alderson is an important figure for Billy, one who shows him that it is possible to apply intellectual rigor and analysis to baseball. By the mid-1990s, Billy has risen through the ranks of the organization to become a talent scout. He is a supporter of Alderson’s approach and wants to apply these principles to his new position. He asks Alderson where he has gotten his ideas from, and Alderson directs him to the works of a writer named Bill James.
Reading James is a turning point for Billy. He goes from being merely a supporter of this new approach to baseball, to a true believer. For, by this point, James’s ideas are beginning to reshape how intelligent general managers and scouts look at the game.
Bill James had begun his writing career under quite humble circumstances. When he starts self-publishing in the late 1970s (it takes a few years for his work to be taken up by a professional publisher), he is already in his 30s, with no written works to his name. Working the night shift in a pork and beans factory in a tiny town in Kansas, he is an unlikely figure to ultimately revolutionize America’s national pastime.
Nevertheless, he has keen insights about baseball (the only topic about which he ever cared to write) and is driven to put them on paper. He begins analyzing baseball statistics: specifically, the deficiencies of existing baseball statistics, and how these deficiencies lead major league teams to make poor and shortsighted personnel decisions. In 1977, he self-publishes his first work, barely longer than a pamphlet. He doesn’t know it at the time, but James is launching a new field of intellectually rigorous and data-driven baseball analysis, which will come to be known as sabermetrics (so named after SABR, the acronym of the Society for American Baseball Research).
James decries the arbitrary and subjective nature of fielding statistics in baseball, particularly the concept of the error. An error occurs when a fielder blunders on some sort of defensive play, resulting in a base or a run for the opposing team. But, James argues, the concept of the error is entirely subjective, almost moralistic—indeed, he cites it as the only statistic in sports that is based on an observer’s opinion of what should have happened.
Simply tallying up errors and praising (and paying) the players who commit the fewest makes little sense, in no small part because there is no objective definition of what an error is. The “error” in question may be the fault of the pitcher, not the fielder. In fact, a player must do something right to be assigned one in the first place—they must be in the correct field position to even attempt the play on which they erred. In fact, a player could keep his error numbers low by consistently being in the wrong field position.
One of James’s main insights is that the naked eye is a poor tool for measuring baseball performance. Statistically significant data, accumulated over long periods of time, offers a much better guide.
Travelling around the country looking for baseball talent, a professional scout might only see small snippets of any given player’s overall performance. In isolation, these tiny sample sizes can lead to wild inaccuracies in judgement about a player’s worth. On any given night, after all, a player with a .275 on-base percentage can play better than his teammate with a .350 on-base percentage.
Yet, James notes, these chance observations of players are informing baseball decisions at the highest levels. Teams are making ludicrous personnel decisions and deciding who does and doesn’t get to be a professional baseball player based on the very flimsiest information. This outrages James, especially in an era of skyrocketing baseball salaries. If players are going to be paid exorbitant sums, it makes sense to figure out exactly what they’re worth. A grotesque market failure, a gross misallocation of precious resources, is at the heart of professional baseball.
Moreover, James is exasperated by the fact that good data actually is available. Rapid advances in computer technology during the 1970s and 1980s have lowered the cost of acquiring and analyzing baseball statistics, certainly for wealthy MLB teams. But the teams choose to squander this opportunity, relying on bad conventional wisdom and outmoded heuristics to decide who should and shouldn’t become a professional baseball player.
James begins publishing annual treatises, in which he highlights the uselessness of commonly-cited baseball statistics like errors, runs batted in (RBIs). Another of James’s key insights is that much of the data that managers, scouts, and GMs use to evaluate players’ skill is based on luck and subjective opinion. In publishing his annual baseball abstracts, James attempts to strip as much luck out of baseball analysis as possible.
James also points out the absurdity of that statistic revered by baseball’s old guard: the RBI. A batter earns an RBI when they score a hit that results in another player scoring a run. By definition, it is a product of luck: a batter has to have the good fortune to be at bat when other players are already on base. The batter will, of course, have had nothing to do with their teammates getting on base before them. It is a matter of luck to even have the opportunity to score an RBI. A batter who hits a single with a runner in scoring position and a batter who hits a single with no one on base have performed the same athletic feat—but one will be credited with an RBI, while the other won’t.
James wants to see exactly which plays most contribute to a team’s offensive production. He sets out to construct a model to predict how many runs a team might expect to score, based on their accumulated walks, singles, doubles, stolen bases, and other offense-generating plays. He pores over statistics from previous baseball seasons to see which components of offense are most correlated with runs. This allows him to assign a statistical “weight” to each, in effect determining how many runs (or portions of a run) a walk, hit, or stolen base is worth.
He distills it down to a “Runs Created” formula:
Runs Created = (Hits + Walks) x Total Bases/(At Bats + Walks)
After statistical analysis, James finds that this formula is remarkably effective in predicting a team’s run production. It shows that walks are a valuable (yet overlooked) part of offense, while batting average matters hardly at all.
Although James starts out with a small audience in 1977, his annual treatises on baseball, The Bill James Baseball Abstracts, reach a growing and influential audience throughout the 1980s. People are compelled by his sharp and pointed critiques of the ludicrous measures by which baseball teams measure success, and begin urging major league clubs to take James’s ideas more seriously. People with backgrounds in economics, mathematics, and statistical analysis are especially drawn to his rationalistic approach to analyzing something that everyone thinks they already understand.
Despite this, there is a marked hostility on the part of baseball insiders toward those they perceive as baseball outsiders, particularly this new army of data-focused, statistics-obsessed observers who dare to tell the big clubs that they are doing their jobs all wrong.
The small cadre of people who actually run professional baseball teams is determined to exclude outside voices and opinions, even if that means losing games. They prefer to do things their way than take advice from a bunch of pencil-pushers droning on about on-base percentage and runs created formulas. They are profoundly uninterested in using baseball statistics in an analytical way. In fact, in the early 1980s, the earliest participants in what later becomes the phenomenon of fantasy sports are more interested in getting their hands on good baseball data than the teams themselves—even though these fans stand to gain far less from such knowledge.
On the rare occasion when major league teams of this era do try to implement sabermetric principles in the front office, these attempts are met with hostility by baseball’s old guard, including sports journalists and ordinary fans. When the Boston Red Sox hire a James-inspired number-cruncher to advise the general manager on personnel decisions, the sports media in Boston treats the hiring as a scandal. They point to this person’s unathletic appearance, his non-baseball background, and his residence in New York City (home of the hated Yankees) as disqualifying factors. They excoriate the Boston GM for being under the sway of a computer geek who (to them) doesn’t know the first thing about baseball and claims to avoid even watching the games. After public outcry in Boston, the team is forced to fire this sabermetrician.
Exasperated James acolytes find their ideas rejected across the league. The ideological conservatism of baseball’s ruling elite seems to have a stranglehold on the game. Despite his growing popularity with the general public, James finds that he has made no headway with the most influential part of what he thinks would be his natural audience—the people who actually run professional baseball teams.
But he does have one devoted reader, who will eventually put his ideas into practice at baseball’s highest level—Billy Beane.
Think about how doing things the way they’ve always been done can lead to poor results.
Have you ever been part of an organization whose accepted way of doing things was inefficient or broken? Describe the situation in a few sentences.
What sorts of conventional wisdom did they espouse? How did you respond to what you believed were bad ideas?
What can you do in the future to challenge tired or outdated conventional wisdom?
By 1997, Billy Beane is the general manager of the Oakland A’s. Inspired to read James by former Oakland GM Sandy Alderson, Billy is determined to use James’s insights to build a winning A’s team. Moreover, sabermetrics will allow him to build a successful team on the cheap, as they offer a guide on how to identify undervalued players. The rest of the league can keep their marquee home run hitters and base stealers; Billy wants the guys who know how to get on base.
Billy has good reasons for defying baseball’s conventional wisdom. He had been the victim of wrongheaded ideas about what makes a successful baseball player. Scouts saw him make flashy plays during his high school playing days and then rushed him into a professional playing career that he never really wanted. He had failed partly due to his own insecurities and mental hang-ups, but also because he had been wrongly labelled a star.
Now, as GM, Billy is determined never to make the same mistakes that had been made with him. He will draft and sign players whose performances—measured by data over the long term, not the starry-eyed reports of scouts based on a handful of games—indicate that they are built for success in the major leagues. He will look for value in the types of players that are typically overlooked by other GMs.
By the 2002 Major League Baseball Draft, Billy has assembled a sabermetric-focused team in the front office, including assistant GM Paul DePodesta, who had graduated from Harvard with a degree in economics and never played professional baseball himself. As he grows into the GM role, Billy begins to run the team more in line with his principles, regardless of conventional wisdom. He is a micromanaging and almost autocratic GM, deferring very little to his scouting staff and even to the manager. Those who are new to the A’s organization quickly realize that Billy runs everything—trades, drafting decisions, scouting, and even tactical baseball decisions on the field.
In keeping with his principle of total control, Billy knows exactly which players he wants to select in the 2002 draft. But they still must overcome the conventional wisdom and conservatism of the A’s scouting staff, many of whom are holdovers who have been with the team for years before Billy became GM.
But to understand why that draft is a pivotal moment for Billy, we first need to understand why the amateur draft is so critical to a team like the Oakland A’s.
As we’ve seen, player salaries had exploded since the 1970s. And by the time Billy Beane is at the helm of the Oakland A’s, the team’s ownership has stressed profitability above all else. The team is to be run on a shoestring budget, with cost containment the guiding principle. Thus, Billy must acquire effective players on the cheap. His acceptance of James’s sabermetric principles greatly helps him in this, empowering him and his staff to identify undervalued players that are overlooked by the other teams.
The emphasis on cost containment is why Billy Beane and his staff place such a strong emphasis on the entry draft. Unlike free agency bidding wars, the draft is where young talent is obtained for very little money. Under league rules, when a team drafts a player, they acquire the exclusive right to sign that player: if the player refuses to sign, they have no right to sign with another team unless they choose to reenter the draft. Once they sign, the team has the exclusive rights to their first seven years in the minor leagues and six in the majors.
Moreover, because these are young players directly out of high school or college, eager to play in the major leagues, and with no legal right to sign with a competing team, the team that drafts them has enormous leverage during the contract negotiation process. As a result, extraordinarily talented players coming directly from the draft can be signed for a fraction of what they would cost on the open market. For teams with deep pockets, the draft doesn’t matter so much—they can always afford to grab players through free agency, even though they often overpay and run their payrolls inefficiently. But for a stingy team like the Oakland A’s, the draft is their best shot at putting together a winning roster.
In 2002, the A’s hold seven picks in the first round. After having their 2001 roster picked clean through free agency by the free-spending, big-market teams like the Boston Red Sox and New York Yankees, the 2002 draft represents a remarkable opportunity for the Oakland A’s to replenish their roster. Billy Beane wants to maximize this opportunity. He has a wish list of 20 players he wants and is determined to make sure that they become Oakland A’s by the end of draft day. To do that, he must overcome the irrational biases of his own scouting staff, while outmaneuvering 29 other GMs.
Billy has keenly observed that players who are drafted directly out of high school have a demonstrably worse track record in the majors than college players. College athletes have played against superior opponents and played more games overall than their high school counterparts. Therefore, their statistics are both qualitatively and quantitatively better than those of high school players.
Billy had been burned by his scouting staff’s insistence on drafting high school players in the 2001 draft. The hype around these players had been based on little more than a handful of personal observations of high school games. The traditionalist scouts had, meanwhile, dismissed college players with solid stats for the most superficial reasons—their weight, their height, or their “attitude.”. Billy sees how much of professional baseball scouting is determined by these arbitrary and subjective evaluations. Based on his own experiences as a high school draftee, Paul DePodesta’s statistical analysis, and his insights from reading Bill James, Billy establishes a new rule for his club going into the 2002 draft: no high school players.
Getting the players on the wishlist will be difficult. Whether or not they are still available depends on what the other teams do. Although Billy and Paul DePodesta have largely prioritized players whom they believe will be overlooked by the other clubs, there is always going to be some overlap with what other teams want.
The picks any team ends up with at the draft depends on a combination of prioritization, strategy, and pure luck—after all, a general manager has very limited ability to prevent one of the teams ahead of them from picking a coveted player. The Oakland shortlist is made up of overlooked and undervalued, but nevertheless, extremely talented college players. Given the team’s financial squeeze, Billy and Paul must draft top-quality players and sign them for a fraction of what they would be able to command on the open market. They target diamond- in- the- rough players, young men who can be turned into effective professional players once they are trained in the Oakland system, which emphasizes on-base percentage over slugging.
At the top of Billy’s shortlist are two amateur players—fielder Nick Swisher and catcher Jeremy Brown. Swisher is one of the relatively few players upon whom the traditional scouts and the sabermetric-focused newcomers are in agreement: the young player is a surefire MLB star.
Brown, on the other hand, is an unconventional pick, especially so high in the first round. Most of the scouting on Brown has assigned him a very low place in the draft, if, indeed, he will be drafted at all. Although the fielder has what appear to be great stats coming out of college, most of the scouting world has dismissed him as being overweight by major league standards. He simply doesn’t look the part of a baseball star. And to traditional scouts who base their evaluations of players almost entirely on firsthand observations, this seems like the kiss of death to any team that would be so foolish as to draft him—if Swisher looks like a guaranteed star, Brown looks like the epitome of a bust.
But Billy knows better and sees Brown’s upside, particularly his on-base percentage. Before the draft, the A’s scouting staff contacts Brown, telling him that they are interested in selecting him in the first round. Brown himself is incredulous, thinking that the call must be one of his friends pranking him. Why would a professional baseball team squander one of its precious first round picks on him? He has been so influenced by conventional baseball wisdom that he discounts his own potential.
To ensure that he is able to draft the players he wants, Billy and his staff need to be keenly attuned to what the other teams are planning to do. One unexpected move by another team has the potential to throw the A’s entire draft strategy into turmoil. Whenever a player is drafted by one team, it has consequences for the next teams in line. If their top player is taken, they must have a backup player ready to go.
Sudden changes have a domino effect across the entire league. As the draft is about to start, an agent convinces a highly touted high school pitcher named Denard Span that he can negotiate an entry-level contract of $2.6 million for him. Word quickly gets out that Span won’t sign for anything less than this, which means that Span will go undrafted—even the most free-spending teams aren’t willing to throw that kind of money at an untested high school player. And although this figure is far above what the A’s would be able to afford and Span isn’t even someone Billy is interested in drafting, this development impacts his drafting strategy.
Now, the Colorado Rockies, who occupy a first round draft position a few picks ahead of the A’s, will choose a different pitcher than Span, who they had been set to select. This, in turn, will influence the Mets’ drafting strategy. They will be able to select Swisher before the A’s can get him. This, naturally, causes the emotionally combustible Beane to explode at this unexpected turn of fortune. For all of his faith in sabermetrics, data, and rational strategy, Billy is still the same volatile man who would break his bat when he failed to hit a home run as a player.
But, just as suddenly, the tides turn again. Billy sees that the Mets have no idea what Swisher is worth. After a conversation with Mets GM Steve Phillips, Billy learns that New York is interested in drafting a high school pitcher named Scott Kazmir. As a high school player, Kazmir is nowhere on Billy’s shortlist, and he is happy to let the Mets have him.
The Mets taking a pass on Swisher, in turn, increases the chances that the Detroit Tigers (who also occupy a position in the draft ahead of the A’s) will choose Prince Fielder, the son of a former Tiger and a sentimental favorite of the Detroit scouting staff. Although the A’s believe it is extremely foolish for Detroit to use a first round pick this way, it opens the way for the A’s to take Swisher, which they do with the 16th pick. They also select Jeremy Brown with the 35th pick.
Draft day 2002 is a perfect encapsulation of the ideological split in professional baseball: traditional, subjective scouting vs. rational, data-driven sabermetrics. In favoring the latter approach, Billy Beane and the Oakland A’s are outliers with respect to the rest of the league. The first five picks in that year’s draft are high school players, violating Billy’s new cardinal rule.
To Billy and Paul, this is a wild and reckless gamble on the part of these other teams, squandering priceless draft picks on high school players, who have been shown by the data to have poor chances of actually panning out in the major leagues. Nevertheless, the rest of the league’s hidebound adherence to baseball conventional wisdom is Oakland’s gain.
(Shortform note: None of the top-five picks from the 2002 draft ever appeared in an MLB All-Star Game, something which could be seen as vindicating Oakland’s no “no high school players” philosophy. Both Scott Kazmir and Prince Fielder, however, did go on to All-Star major league careers, suggesting on the other hand that Billy and the A’s were overly pessimistic about other teams’ drafting strategies.)
Billy and his staff can’t believe their good fortune. As the rest of the league makes poor draft choices, more and more of the A’s shortlist becomes available. What had looked at the outset like a potential disaster turns into a bonanza for Oakland. At the end of the day, they snag 13 of the 20 players on their shortlist. Before the draft begins, Billy and his staff believe that getting three or four would be a success. This isn’t just a good draft, it is an absolute rout. From the A’s perspective, they have fleeced the rest of the league, drafting talented players and signing them for a fraction of what the other teams are paying.
In drafting these largely overlooked or outside the box players (with the obvious exception of players like Swisher), the A’s are applying the principles of value investing to professional baseball. Value investors specialize in identifying companies that the market tends to undervalue. Billy and Paul profit from the irrationality of their competitors, who tend to overvalue certain players for subjective or sentimental reasons, rather than a rational analysis of their likelihood to succeed in the major leagues. In adopting a value investor approach to the draft, the A’s manage to get more bang for their buck than anyone else.
The 2002 draft is a key moment for the Oakland A’s, giving them the opportunity to replenish a 2001 roster than had been depleted through trades and free agent poachings from other teams. During the offseason, the team loses stars like Jason Isringhausen, Johnny Damon, and Jason Giambi. But we should explore why they left the team in the first place. For the answer to this also lies in Billy and Paul’s data-driven, sabermetric approach to running the team.
As a cash-strapped club, the Oakland A’s simply can’t afford to go out on the free agent market and throw money at the available stars. Payroll cannot exceed $40 million. On a 25-man roster, this means an average salary of around $1.5 million per player—far below the league average of $2.3 million. Thus, the A’s must acquire inexpensive players through the draft and then trade them once their entry level contracts expire and they become too expensive to retain.
This is what happened with the players from the previous season, all of whom the A’s had no longer been able to afford on their meager budget. And this is what makes the 2002 draft so critical: they are counting on the newcomers to fill in these gaps.
Despite the total mismatch of financial resources between the A’s and the rest of the league, the team is remarkably successful under Billy’s leadership. The 2001 A’s finish 102-60. The 2002 iteration of the team, meanwhile, goes 103-59, good for first place in the American League West Division. On paper, the 2002 team is far worse than its 2001 incarnation. Yet they manage to post a nearly identical win-loss record with what looks like an inferior roster.
They achieve this through shrewd, value-driven management of their most important asset: the players. Billy and Paul, with their sabermetric approach, realize that no player is irreplaceable. All players make measurable, on-field contributions to team success. Taking a page from Bill James, Paul crunches the numbers and determines exactly how many runs each player contributes to total team runs. He understands that every action taken by a player has an expected run value, by either helping the team score runs or preventing opponents from doing so.
Paul is able to calculate exactly how many runs any player is worth. In a dysfunctional and irrational market for baseball players, expected run value becomes the gold standard for the A’s, a tool that enables them to more accurately price the assets in any given trade. This knowledge gives the A’s an edge in player trades with other teams, enabling them to receive far more value than what they give up, while saving money. The rest of the league is making these vital franchise decisions on instinct and subjective reasoning; the A’s are using a formula that enables them to far more accurately gauge the value of their players.
If the market for baseball players had been rational in any way, the A’s shouldn’t have been able to enjoy the success they do. If player salaries accurately reflect player value, the continually outspent A’s should be bottom-dwellers instead of perennial contenders. But Billy and Paul know the market isn’t rational. Some players are wildly overvalued, while others are undervalued for the most spurious of reasons, having nothing to do their actual level of performance.
This flies in the face of what has crystallized into conventional baseball wisdom by the late 1990s and early 2000s. At the time, there is growing concern within baseball circles that small-market, low-budget teams can never hope to compete with the likes of the Yankees. The rich teams will simply scoop up all the best talent, leaving the rest of the league with lower quality players. This concern is premised, of course, on the assumption that salaries reflect true value—that is, the teams with the most money and highest payrolls should have the best on-field record. But there is one glaring exception to this theory: Billy Beane’s Oakland A’s.
In 1999, MLB Commissioner Bud Selig convenes a blue ribbon commission to examine the wealth inequality in major league baseball, exploring possible solutions to this “problem,” including revenue-sharing and player salary caps. Under such schemes, the rich teams would effectively be subsidizing the poor teams. Selig, as owner of the cash-strapped Milwaukee Brewers, has his own self-interested reasons for spreading the money in baseball around more equitably. And the idea of the poor teams being hamstrung by financial constraints rather than poor management is certainly a comforting nostrum to many GMs around the league because it excuses their weak performances.
Billy Beane himself gives testimony before Selig’s commission, and in his report (authored by Pual DePodesta), he echoes the views of the commissioners, arguing that his team’s success is a mere fluke. Beane’s presentation argues that his team’s recent success does not disprove the larger point that low-budget teams like his can’t afford to compete with the rich teams in the long run.
But Billy does not believe his own presentation. Sure, he’s happy to tell the commission what it wishes to hear, especially if it might result in the containment of player salaries or even revenue-sharing with the major teams—having more financial resources certainly wouldn’t hurt the A’s. But he also knows that he doesn’t need it. He has seen firsthand, as a player and now as a general manager, just how irrational the market for baseball players really is. He is fine with letting the rich teams mindlessly throw money at aging and overpriced stars, while leaving the undervalued and overlooked players for him. He knows most bad baseball teams aren’t bad because they lack cash—they are bad because they are poorly managed. And he is confident that effective management will beat money every time.
Before the start of the season, Paul DePodesta calculates that it will take about 95 wins to reach the playoffs in 2002. With this as the end goal, it’s then a matter of working backwards: to achieve 95 wins, they will need to have a runs scored vs. runs allowed differential of +135 (Bill James had discovered that there is a stable ratio between run differential and wins).
And this is where the team’s data-driven approach really pays dividends. The loss of Isringhausen, Damon, and Giambi definitely costs the team, but it costs them in a way that can be measured and quantified. If these players’ contributions to the positive run differential is now gone, they must find the players who, based on past performance, will be able to fill in those gaps. Such players don’t need to be highly paid stars, they just need to contribute to the team’s net run total. And such players can be had for very little, thanks to the irrationalities of the labor market for baseball players.
As a closer, Isringhausen only pitches at the end of the game, in relief of the starting pitcher. But closers, Billy realizes, are highly overvalued and overrated because GMs put too much stock in the usefulness of “saves.” A closer earns a save by doing nothing more than not losing a game that is already nearly finished by the time they take the plate.
The likelihood of a team winning or losing any game is largely determined before the closer makes their appearance. A save is earned mostly on the backs of the team effort that precedes them—if a closer comes into a game in the ninth inning, with his team already leading and no one on base, he is likely to earn the save regardless of what he does. The save, the key metric by which closers are valued, is, like the RBI or the error, heavily weighted by luck.
But Billy knows that the rest of the league still believes in the value of closers. When Beane had acquired Isringhausen back in 1999, he was a minor league pitcher in the Mets organization. So the A’s groom him into a role as a closer, giving him the opportunity to inflate his save totals. When Isringhausen later becomes too expensive (because his ability is overvalued by the rest of the league), Billy ships him off to the St. Louis Cardinals, in exchange for two first round picks in the 2002 draft—one of which will later be used to acquire Jeremy Brown. The practice becomes known inside the Oakland organization as “selling the closer.”
Johnny Damon is a center fielder and a slugger with a talent for extra base hits. He boasts a great slugging percentage (a similar statistic to batting average, except weighted to account for extra base hits like doubles, triples, and home runs), is thrilling to watch at the plate, and is a fan favorite. Yet Beane and DePodesta also see that Damon strikes out a great deal—indeed, he makes outs at a rate that greatly reduces the return on investment of retaining him.
After revising Bill James’s old “Runs Created” formula, DePodesta concludes that an extra point of on-base percentage contributes three times as much to runs as slugging percentage. A player who rarely hit triples or home runs, but consistently gets on base through walks and singles, is more valuable than a flashy slugger like Damon who tends to strike out—yet such a player is likely to command a much smaller salary than a player like Damon.
Evaluated this way, Damon performs poorly, with a .324 on-base percentage—ten points below the league average. Thus, his offensive skills are replaceable. The team needs to find a combination of players that can compensate for the loss of Damon’s expected run value. And with the rest of the league having such a poor understanding of these concepts, Beane and DePodesta know they can get such players for a fraction of what they are really worth. This is why they allow Damon to walk after the 2001 season.
The loss of Giambi to the Yankees will be harder to replace. Although defensively weak as a first baseman, Giambi is a highly efficient scorer at the plate, a run-creating machine with a stellar on-base percentage of .477. He is the rare player, like Nick Swisher, on whom the sabermetricians and the old baseball guard can agree. But even still, Beane and DePodesta know that Giambi isn’t irreplaceable.
For the team is simply the sum of its parts. And while certain star players obviously contribute more runs than others, their output can be replicated. The production of a Giambi might not be easily replaced by another single player, but it can be replaced by a combination of other players, each of whom can do their part to fill in the gap left by his departure.
They don’t need to find the total package in a new player—they just need to find a fraction of that package, which will form part of the whole when joined with other players. They aren’t looking for the next Giambi, nor, frankly, can they afford to. They need to find the parts of Giambi, which can be obtained for far less.
The players Oakland loses after the 2001 season (including Giambi) have an average on-base percentage of .364. The task before Billy Beane is thus to find new players who can man the former players’ field positions competently, while collectively contributing an on-base percentage 30 points higher than the league average, thus filling Giambi’s gap. Surprisingly, Billy is able to find such players for next to nothing—a testament to how most major league clubs discount the importance of on-base percentage.
The players brought in to replace the lost offense are catcher Scott Hatteberg, outfielder David Justice, and first baseman Jeremy Giambi (Jason’s younger brother). These are players whom most of the rest of the league has written off as inadequate or defective, which, of course, is why the A’s are able to acquire them so easily.
On Wednesday, April 24, 2002, the A’s are hosting the Yankees. The game makes for a compelling story, as it is Jason Giambi’s return home to the team he spurned. While the fans jeer him and brandish signs labelling him a “Sellout” and “Traitor,” the A’s front office sees the game as an interesting experiment, a test of their sabermetric principles.
DePodesta, ever calm and calculating, makes the point that focusing on the results of any one game in a 162-game season is shortsighted. He argues that the process of how teams play games and accumulate runs matters far more than the results of individual games. Everyone else does the opposite: making decisions based on outcomes rather than processes. If a team maintains their discipline and consistently gets on base, they are likely to win more games over the course of a long season. But it’s impossible to completely remove the element of luck from baseball, and random, unexpected events in a single game can always overwhelm probability.
Sure enough, the Yankees roar out to an early 5-0 lead. Billy Beane, for all his focus on long-term results, is still highly emotional when it comes to baseball. His frustration and anxiety become too much to bear and he departs the stadium. This is why he seldom watches the games in real-time: he does not want his player decisions to be influenced by the outcomes of single games and single plays.
Although he does criticize individual player decisions in the heat of the moment (derisively labeling shortstop Miguel Tejada as “Mr. Swing at Everything” when he steps up to the plate during this game), he does not want to fall prey to the scout’s fallacy of judging players based on statistically insignificant sample sizes.
The game is a test of Oakland’s new acquisitions of Justice, Hatteberg, and the younger Giambi. The 36-year-old Justice, for instance, is written off by other teams as too old. Despite this, he boasts a high on-base percentage and excels at drawing walks. This unglamorous style of play seldom makes the highlight reels on ESPN, but it contributes significantly to helping teams win games, which is why Oakland acquires him. Sure enough, Justice’s patience at the plate yields results during the game, earning him a walk which leads to a run that cuts the Yankee lead to 5-4.
The next batter up is Jeremy Giambi, believed by many around the league to be too slow to succeed in the majors. But he does have an above-average on-base percentage, derived largely from his patience and ability to wear pitchers out, which ultimately draws walks. And Giambi, to his credit and the crowd’s delight, draws a walk during this at bat, bringing home the tying run for the A’s. The team’s methodical approach appears to be yielding fruit.
Although a run of bad luck in the final innings (and some questionable calls from the umpire) cause the A’s to lose this game to the Yankees by a score of 8-5, the team is clearly competitive. And although it’s only one game, the parts assembled by Billy Beane clearly appear to be working as intended.
The final player acquired to replace Giambi’s offense, Scott Hatteberg, goes to the locker room after the loss to the Yankees to review the tape of the game. This is one of the qualities the team most admires about Hatteberg: he is a smart, analytical player, a student of the game who wishes to learn from his mistakes.
Once a catcher in the Boston Red Sox organization, with some hitting ability, injuries have robbed Hatteberg of his ability to throw the ball. As a result, his market value rapidly declines, and he struggles to find a major league team willing to take a chance on him after his contract expires in 2001. But, as we’ve seen with other players, Billy Beane’s Oakland A’s see upside in Hatteberg where other organizations see only downside.
For Hatteberg is also a remarkably disciplined hitter, with an uncanny ability to draw walks and get on-base. His mediocre .270 batting average conceals his true value. Because of his injury history and his unrecognized offensive contributions, Beane is able to sign Hatteberg for a mere $1 million.
No longer able to throw, Hatteberg is re-molded into a first baseman by Oakland. Although he struggles in his new role during 2002 spring training, by mid-season, he blossoms into an above-average first baseman. But that is just a bonus for the organization. Billy Beane has not brought Scott Hatteberg to Oakland for his fielding ability—Scott Hatteberg is in Oakland to hit.
Hatteberg is the opposite of what Billy Beane had been as a player. Where Billy was petrified of striking out (which caused him to madly swing at every pitch), Hatteberg is unafraid of the third strike. He has the patience and discipline to wear out opposing pitchers, forcing them to throw inferior pitches which he can then hit. He knows how to wait for the game to come to him, rather than trying to force the game to bend to his desires. In short, he has the mental durability that Billy Beane had never developed as a player.
Oakland is the ideal environment for a player like Hatteberg to thrive. The Red Sox had scorned his thoughtful approach to hitting as weak and passive. They wanted hitters with flash and power, even if these hitters also struck out on the regular. The team would yell at him for drawing a walk with a man on base, foolishly labelling such behavior as “selfish.” They had wanted him to swing at everything. The Boston hitting coach, Jim Rice, even derided Hatteberg for working the count and grinding pitchers down, pointing out that Hatteberg had a .500 batting average when he swung at the first pitch. Of course, Hatteberg would only swing at the first pitch when it was too good to not swing at, which was rarely the case. Still, the Red Sox organization would not hear of it and tried to force Hatteberg to become a slugger.
But everything is different in Oakland. Hatteberg’s style blends perfectly with Beane’s philosophy and he thrives. By the end of the 2002 season, Hatteberg is one of the stingiest swingers in the league, choosing not to swing at 64.5 percent of pitches thrown to him—the third-highest rate in the American League. DePodesta calculates that if Scott Hatteberg had taken every at bat for the A’s in 2002, the team would have scored between 940 and 950 runs, more than the entire roster of the powerhouse Yankees. Put another way, nine Scott Hattebergs are worth more than the entire Yankee team.
Examine your attributes or qualities that might go unnoticed by others.
What are some of your best attributes, skills, or qualities that you believe are relatively unnoticed or undervalued? Describe them briefly.
In a few sentences, why do you think others are unable to see these hidden talents?
Going forward, how can you better highlight these undervalued skills?
Despite Billy’s savvy moves, the 2002 Oakland A’s get off to a rocky start. By mid-May, they are on a losing streak and are six games below .500. Clearly, they are not on pace to meet DePodesta’s 95-win benchmark for a postseason appearance.
The trade deadline looms ahead on July 31. After this date, teams cannot conduct trades until the end of the season. The trade deadline is a moment of reckoning for every team in the major leagues, when they must take stock and determine whether they are still in contention for the playoffs or whether they should begin planning for next season. Teams that are doing well might decide to be aggressive at the deadline and give up future assets to acquire star players. Teams that are out of contention, meanwhile, will offload expensive stars in exchange for younger and cheaper prospects.
Billy always excels at the trade deadline. Since 1999, the A’s have always performed remarkably better in the second half of the season, after the deadline, than in the first half. The reason for this is Billy’s shrewdness as a GM and his keen understanding of what his team needs—not to mention the foolishness and shortsightedness of his rival GMs, whose ignorance he consistently exploits.
The A’s organization has quantified the value of every player in their system, as well as every player in the systems of the other teams. They know exactly which players they want to go after, and which players of their own they want to get rid of. Billy’s advantage over his rival GMs is better information: he has a better understanding of value, which enables him to get more from trades than he gives up. Under Beane, the A’s don’t overpay for players and don’t give in to pressure from fans or the media to make desperate deals under pressure—which nearly always lead to a bad outcome.
Oakland’s strategy going into the season is to assemble a roster that is still in legitimate contention at the trade deadline. At that point, Billy will be able to take advantage of other GMs who are looking to offload their stars at a discount. The glut of available players causes their price to drop. The trade deadline is a classic buyer’s market, and Billy knows exactly how to take advantage of it, acquiring players that he could never have afforded at the beginning of the season.
Even before the trade deadline starts, Billy is exploiting the irrationality of the other teams. He has on his own roster players who are overvalued by the rest of the league because they have gone on recent hot streaks, making them look better than they actually are. This causes other GMs to overstate the true worth of these players, looking at short-term trends instead of long-term performance. Either way, Billy Beane is happy to let these players’ stocks rise.
One such player is Carlos Pena. At the beginning of the month, Billy deals the overvalued Pena to Detroit in exchange for ace pitcher Jeff Weaver and $600,000 in cash. He then trades the pricey Weaver to the Yankees (who think nothing of his $2.6 million salary) in exchange for two excellent prospects and the highly underrated pitcher Ted Lilly. It is a classic Billy Beane trade, trading an inferior player for a superior one while cutting costs.
A few weeks before the trade deadline, Billy shops pitcher Cory Lidle around the league. Lidle has performed poorly all season, but he’s now on a hot streak. This causes Lidle’s stock to rise in the eyes of GMs who only look at the short-term. Billy sees that he is overvalued and knows that the time is ripe to get maximum return for Lidle. To his surprise, the Chicago White Sox are willing to give up All-Star second baseman Ray Durham for Lidle and a Triple-A pitcher.
Beane acquires Durham, however, for different reasons than those valued by his scouting staff. They like his speed and ability to steal bases, attributes which Billy sees as adding little value to the team. Instead, Billy prizes Durham’s success in getting on base and not making outs.
Billy knows that Durham, who will become a free agent when his contract expires at the end of the season, will be too expensive for the A’s to retain past 2002. But this is part of the strategy. Durham is a rental, someone who will be used for a deep playoff run this year and then allowed to walk after the season. The A’s will also receive a compensatory first-round draft pick from the team that signs Durham, a valuable opportunity for Oakland to inexpensively replenish their roster.
On July 1, a month out from the deadline, the A’s stand at 46-36, good for third place in the AL West, six games behind the division-leading Seattle Mariners. As the deadline approaches, Beane wants to acquire Cleveland Indians pitcher Ricardo Rincon. The Indians, all but eliminated from making the playoffs, are looking to get rid of Rincon, but their GM tells Beane that another team, the San Francisco Giants, is also interested in the pitcher.
Billy is also hemmed in by financial constraints: Rincon is owed $508,000 for the rest of the season, money that the A’s don’t have. Billy needs to both outbid the Giants (or at least convince the Indians that his is the better offer) and find a way to pay Rincon’s salary. He needs to shed some money from his team’s current payroll to make room for Rincon.
He decides to auction off pitcher Mike Venafro to other teams that he knows are in the market for Rincon, hoping that they will be willing to settle for the much cheaper Venafro as an alternative. This will also have the benefit of lowering the price for Rincon, as teams will see that there is another viable left-handed pitcher on the market. Most importantly, it will take Venafro’s salary off the books, partially clearing the way for the A’s to afford Rincon.
After calling both the Giants and the Mets with an offer to trade them Venafro in exchange for a minor league player, word gets around the league that Venafro is on the market. Sure enough, the Indians’ GM calls Billy to tell him that the market for Rincon has now softened, and he is now willing to trade him to the A’s for less than he’d initially asked.
Billy wants to send Venafro to New York in exchange for a minor league player and $232,923 in cash (the remaining difference in salary between Venafro and Rincon, which he believes the Mets can easily afford). The A’s are actually more interested in getting rid of Venafro’s salary than acquiring anything from the Mets—in fact, when the Mets ask Billy what he wants in exchange for the pitcher, he chooses a player from one of the Mets’ minor league affiliates at random.
But Billy proves unable to actually unload Venafro—it turns out that the Mets actually need the cash. Billy calls up the A’s president, Mike Crowley, and tells him that if he is unable to shed Venafro’s salary this year, he will sell Rincon for twice the price next year. If he falls short of this goal, Billy vows to cover the difference personally out of his own salary—but if he manages to sell Rincon for more than twice the price, Billy will pocket anything over this amount. Billy Beane is taking a personal equity stake in one player. This convinces the A’s ownership to give Billy the greenlight to acquire Rincon from the Indians.
Billy makes the deal for Rincon, only giving up a minor league second baseman named Marshall McDougall. Billy demotes underperforming pitcher Mike Magnante to make room for Rincon on the roster. It’s all part of Billy’s efficient management of his baseball club—upgrading the team through new assets, and discarding the old ones when they’re no longer of use.
That day, as Billy works the phones, he learns through one of his media contacts that Montreal Expos left fielder Cliff Floyd is going to be traded to the Boston Red Sox. In this development, Billy sees an opportunity. For while the A’s could never afford to pay a player like Floyd, he knows that the Red Sox can do so quite easily, and are actually desperate to acquire the left fielder. The Red Sox have violated one of Billy’s cardinal rules about never making a deal out of a perceived necessity—they have convinced themselves that they must have Floyd by any means necessary and are willing to pay any price to get him. This naturally puts Boston in a dreadful negotiating position.
Billy doesn’t want Floyd to actually play for the Oakland A’s. Instead, he wants to acquire Floyd to use as trade bait for the Red Sox. Floyd will be pure leverage—almost ransom—in Billy’s negotiations with Boston, enabling him to take whatever he wants from the Red Sox. But first, he needs to actually get Floyd, even if it’s only to trade him a few hours later. And that means he has to kill Montreal’s plans to deal Floyd directly to Boston.
When Billy speaks with Montreal GM Omar Minaya, he realizes that Boston’s bid is far better than anything he can offer for Floyd. The Red Sox are willing to give up a slew of coveted major league and minor league players, along with $2 million in cash. Minaya claims to be quite happy with what Boston is offering. Billy’s only hope in this situation is to convince Minaya that the Red Sox are fleecing him and that he could, in fact, be getting far more for Floy.
Billy proposes to Minaya a three-way trade, in which Montreal will get all of the players that Boston is offering, plus another player from the A’s system. All Minaya needs to do is deal Floyd to Oakland and let Billy negotiate directly with the Red Sox. What Billy doesn’t tell Minaya is that he plans to extract other players from the Red Sox beyond those whom Minaya has already secured—and those are the players that Billy would be keeping for himself.
The player in the Red Sox system whom Billy most covets is Kevin Youkilis, the “Greek God of Walks.” He is a college player, whose stats had initially jumped out at Paul DePodesta. In 2001, the A’s had targeted Youkilis as a prime draft pickup; the team failed to draft him thanks to the influence of the traditional scouting staff, which still had some say in these decisions at that time.
Youkilis is Billy’s quintessential dream player. Because he is overweight, he has been overlooked and discounted by the collective wisdom of baseball traditionalists around the league. But he also possesses a stellar on-base percentage, an extraordinary ability to grind pitchers down and contribute offense. Billy’s plans to get Montreal to trade him Floyd is merely a gambit: he wants to use Floyd as bait to get Youkilis.
But Minaya is still skeptical—he is worried that Billy’s machinations will cause his deal with Boston to fall apart. Billy tells Minaya to simply ask for Youkilis in addition to the package of players he’s already getting. He assures Minaya that the Red Sox will raise no objection to Minaya slightly raising the price of the transaction. Billy is certain that Boston management will not allow themselves to be lambasted by fans and the media for letting an overweight, no-name college player like Youkilis stand in the way of acquiring a star like Floyd.
But Billy has misread the situation in Boston. The new Red Sox assistant GM, Theo Epstein, is a young Harvard graduate, a number-cruncher and sabermetrics devotee in the mold of Paul DePodesta. In fact, he is a keen admirer of Billy Beane and the entire Oakland organization. And Epstein has convinced the Red Sox of the true value of players like Youkilis. Once Minaya asks for Youkilis as part of the deal, the Red Sox know that Billy Beane is somehow behind it, and they’re not willing to part with Youkilis. It now seems that other teams are getting wise to Billy’s strategy.
But there is more to baseball than hitting and on-base percentage. Pitching still matters a great deal. The A’s apply their value investing approach to finding pitchers just as much as they do with hitters, seeking out players with unusual throwing styles or unconventional physical make-up whom they think other teams will look past.
Most other teams look for the athletic equivalent of a sports car or a thoroughbred racehorse in a pitcher. They want speed more than anything, and they treat a pitcher’s average pitching speed as the most important measurement of his performance. Billy believes this to be foolish. Pitchers ought to be judged solely on their success in making outs, preventing runs from being scored against the team, and thus contributing to run differential and wins. Velocity for its own sake is irrelevant.
Years before, Bill James had pointed out that many commonly used fielding statistics, like errors, judged players based on luck. The dreadful state of fielding statistics made it difficult to evaluate these players rationally. By that same token, it would be hard to judge pitchers based solely on their merits, because so much of team defense depends on what the fielders do, not the pitcher. There are too many events on the field that are completely beyond the pitcher’s control.
Although James had never come up with an adequate solution to this problem, one does emerge from an unlikely source—a bored Chicago paralegal named Voros McCracken. McCracken argues that measurements like hits and earned runs against should be heavily discounted when evaluating a pitcher’s performance, as they depend too much on fielding. Instead, pitchers ought to be evaluated on the basis of the walks and home runs they give up and the strikeouts they earn, as these are aspects of the game solely under their control.
McCracken proves his theory correct by running the numbers from one season to the next. He sees that there is little consistency between the hits or earned runs a pitcher gives up from one year to the next. But there is remarkable consistency year after year with home runs, strikeouts, and walks. This strongly indicates to McCracken that his theory is accurate and that fielding is padding the numbers for bad pitchers and downgrading them for good pitchers.
McCracken calls his new statistical model DIPS: defense-independent pitching statistics. And his theories happen to line up with those of a major league GM with a nose for finding underpriced assets: Billy Beane.
One pitcher who excels in the DIPS categories is Chad Bradford. Despite his unusual throwing style, he is a remarkably talented pitcher, one of the best on the Oakland A’s staff and one of the best relief pitchers in the major leagues. And at a meager $237,000, he is a steal. Like nearly all the other A’s pitchers, he has been overlooked or written off by the other teams, as someone who could never succeed in the major leagues. Yet he is a key part of the A’s pitching staff—the best in baseball. They’re seeing something that the rest of the league isn’t—and at a fraction of the price.
Born and raised in Mississippi, Bradford barely makes his high school baseball team. The major leagues seem like a pipe dream for him. During his high school pitching days, Bradford’s coach teaches him to throw sidearm, a throwing style in which the baseball is released from the pitcher’s hand just above the ground, with the torso bent at a nearly horizontal axis. Although highly unusual (and initially uncomfortable), Bradford masters the style and sees that it is effective in striking batters out.
After he fails to receive an offer from any of the Division I schools, Bradford attends a local community college, where he joins the baseball team. While there, a scout from the Chicago White Sox takes notice of him, impressed by how naturally Bradford throws sidearm. To Bradford’s shock, he is taken by the White Sox in the 34th round of the 1994 draft.
Over the next few years, Chad works his way up through the White Sox organization to their Triple-A affiliate in Calgary. He is earning a pittance (he needs to take a side job as a forklift operator just to scratch out a living) but is living his dream by playing professional baseball and has blossomed into an exceptional pitcher by this time. In 1998 in Calgary, he gives up only three home runs in 51 innings pitched, with an earned run average of just 1.94. That same year, he is, at last, called up to the big leagues by the White Sox, where he turns in a similar dominant performance.
But the White Sox never really believe in Chad, attributing his success to mere luck. They don’t believe someone with such a bizarre style can succeed long-term in the majors. He just doesn’t look like a pitching ace. They never assign him a full-time spot on the Chicago pitching staff. But Bradford’s success hasn’t gone unnoticed by Billy Beane, who acquires him from the White Sox before the 2001 season for nothing more than a minor league catcher. Billy has stolen another player out from under the nose of a rival GM.
The A’s are reborn after Billy’s wheeling and dealing at the trade deadline. A mediocre third-place team at the end of July, by September, they are in first place in the AL West, going on a 19-game winning streak. On September 4, 2002, they have the opportunity to earn their 20th straight win, an American League record at the time.
That night, the largest crowd ever for an Oakland regular season game gathers at Network Associates Coliseum to watch the A’s try to make history against the hapless Kansas City Royals. The team’s success is a testament to Beane and DePodesta’s strategy of finding player value where other teams see none, and putting their resources into on-base percentage rather than flashy home run hitters. They are a Bill James-inspired team: and the results are showing on the field.
Billy has no intention of watching the game that night, as is his standard practice. Like with the Jason Giambi homecoming game, there is no point in getting emotionally invested in the outcome of a single match. A baseball GM assembles a team for the long haul of a 162-game season. Worrying about one game, no matter its symbolic importance, is akin to a casino manager worrying about the outcomes of individual pulls of the slot machine or draws at the blackjack table.
Billy has created a team composed of players whom he regards highly because of their strong statistical performances in meaningful categories over long periods of time. In the long run of the regular season, he believes that they will meet their statistical destiny. But, of course, anything can happen in a single game.
Despite his intentions,But Billy is unable to resist the temptation to watch the A’s go for their 20th straight win. During the game, he finds it difficult to keep his emotions in check. When the A’s roar out to an 11-0 lead in the game, the crowd is ecstatic and Billy is elated. The team’s 20th straight victory seems assured. But bit by bit, the commanding lead evaporates. And as it does, Billy the cold, calculating GM gives way to Billy the emotional volcano, liable to explode at any time.
Clearly, he is highly emotionally invested in this one game, even if he knows he shouldn’t be. After all, the model he and DePodesta had put together shows that the team needs to win 95 games to earn a postseason berth. Ninety-five wins means 67 losses, and tonight might just be one of those 67. But it is impossible for Billy to detach himself from the symbolic importance of this game. He begins criticizing the performances of individual players and calling into question the decisions of manager Art Howe, with whom he frequently clashes (Howe also resents Billy’s micromanaging of the A’s and feels he lacks the on-field deference customarily granted to managers).
Miguel Tejada is a shortstop who Billy has hounded for making flashy, acrobatic plays instead of less glamorous, but tactically sound ones. On this night, Tejada tries and fails to get a runner out at home plate instead of going after the runner on third base. The risky play fails to produce any outs and cuts the Oakland lead to 11-6. Billy is frustrated, claiming that players like Tejada “try to do more than they should.” Later, Billy calls Howe’s impulsive decision to take first Bradford and then Rincon out of the game as “a fucking embarrassment.” As the Royals rally to tie the game at 11-11, Billy begins hurling objects around the clubhouse in frustration.
At the bottom of the ninth inning, with the score tied, Scott Hatteberg, Billy Beane’s reclamation project, steps up to the plate. With the score tied, Hatteberg has the opportunity to win the game in a walk-off. True to his patient hitting style, Hatteberg vows to himself that he will not swing at anything in the strike zone unless he has two strikes against him, after which he has little choice but to swing. He will grind the pitcher down as much as he can, looking for either a weak pitch or an opportunity to earn a walk.
Happily for Hatteberg and the A’s, he doesn’t need to wait that long. On the second pitch, Hatteberg takes a swing at a fastball and belts it out of the park for a game-winning, history-making home run, as the A’s clinch their 20th consecutive victory. Billy Beane will try to pass off the game as no different than any other, but of course, it isn’t. Billy may operate as a calculating, asset-trading GM, but he is still, at heart, driven by passion and emotion.
(Shortform note: The 2017 Cleveland Indians posted 22 consecutive wins, breaking the record set by the 2002 Oakland A’s.)
The Oakland A’s shock the baseball world by winning the AL West Division, with a record of 103-59. They have one of the best regular season records in all of baseball, second only to the Yankees (the team that poached Jason Giambi). Going into the season, the media and old guard of baseball had believed the A’s barely stood a chance of making the playoffs at all, let alone of winning their division. Their success is a testament to Beane and DePodesta’s value investment strategy in building the team and a stunning rebuke to decades of conventional wisdom about what makes a winning ballclub.
One of Billy’s favorite proof points is the fact that the Minnesota Twins have scored 32 fewer runs than the A’s, despite having a team batting average that is 11 points higher. Billy explains to his team and to the media that this disparity is due to the fact that the Twins’ on-base percentage is lower, and on-base percentage matters far more for run production than batting average. The Twins also squander outs by making foolish plays like attempting to steal bases and hitting sacrifice bunts at a rate far higher than the A’s.
This is a major point of contention between the A’s and the baseball traditionalists, particularly television and radio commentators like former player Joe Morgan. Morgan argues that teams must “manufacture runs” to achieve success in the playoffs, i.e., trade outs for runs through stealing bases and hitting sacrifice flies and bunts. Billy thinks this argument betrays a deep ignorance of the game. Why would a team treat outs as anything other than a precious resource to be preserved at all costs? And why should the process for winning a baseball game be any different in the playoffs than it was during the regular season?
Billy knows that much of the baseball commentariat is actively rooting against his team in the playoffs. They seem to not so much disagree with his club’s ideas about how to win baseball games as to be outright offended by them. Winning games without flashy home run sluggers or lighting-speed pitchers, to these keepers of baseball’s conventional wisdom, is a violation of the natural order of things, a perversion of the noble tradition and spirit of America’s national pastime.
Unfortunately for Billy and the A’s, the Joe Morgans of the world get their wish when the A’s fall in the first round of the playoffs, losing three games to two in a best-of-five divisional series to the Minnesota Twins. The naysayers believe that this proves Billy Beane wrong: the Twins, with their high slugging percentage and team batting average, have beaten the sabermetric, on-base percentage-obsessed A’s. The old school of subjective baseball commentary is right; the new school of data analysis and number crunching is wrong.
But is this really true? Can such sweeping inferences be drawn from a five-game playoff series, which the A’s barely lost? To Billy Beane and Paul DePodesta, the answer is a resounding “no.” The A’s poor playoff performance relative to their stellar regular season record is entirely explained by the small sample sizes of the playoffs, in which random on-field events have an outsized impact on the outcome of a series. As Billy points out, “My job is to get us to the playoffs. What happens after that is fucking luck.”
DePodesta notes that during the regular season, the A’s had allowed an average of only four runs per game, but that they allowed 5.4 during the series against the Twins. If a key player has a few bad games in a row during the regular season, it matters little, because the consequences are negligible in the context of 162 games. But in a five-game playoff series, poor player performance can doom a team. This is precisely what happens to the A’s in the 2002 playoffs: Tim Hudson, who had been a rock-solid pitcher all season, pitches two awful games against the Twins. This is entirely anomalous for him and couldn’t have been predicted. The A’s have been hit with bad luck.
While the outcome is obviously frustrating, the playoff flameout does little to undermine the soundness of the team’s overall approach. That Joe Morgan is out in public claiming that Oakland’s loss is due to their inability to “manufacture runs” says more about the absurdity of his critique and his ignorance of how baseball actually works than it does about the A’s.
Morgan is part of an insiders club of pundits, writers, scouts, and ex-players, one almost entirely immune to accountability. No matter how inaccurate their predictions, no matter how wrongheaded their analysis of the game, they are never drummed out of professional baseball circles. The members of this clique always seem to find ways to make a living in the world of baseball, despite their often poor performances and recycled cliches. This situation contrasts with that of active players, managers, and GMs, who are unceremoniously traded, demoted, or fired for the most capricious reasons.
This state of affairs would never exist in a functioning market. In a rational labor market, people who were bad at their jobs, whether commenting on baseball or scouting future players, would be fired. But as we’ve seen, baseball is one big market failure, one in which salaries rarely correspond with actual value. It is less of a business than a social club, one that values loyalty over competence.
Billy Beane is surprisingly calm in the wake of his team’s playoff disappointment. He knows that what he has accomplished with the A’s on a shoestring budget is extraordinary. He is frustrated by the media commentary, which seems inordinately focused on how a team fares in the playoff crapshoot rather than the real test of its mettle during the regular season, but he knows he cannot change this.
What he can change is the makeup of his team, to prepare it for success in 2003. One of his first moves is to get rid of manager Art Howe. He persuades the Mets to hire Howe, taking his hefty $2 million salary off the books, and he promotes one of the assistant coaches to the manager position. And in the A’s organization, the manager is more of a symbolic role: Billy will be calling all the shots.
By this time, the smart team owners around the league see the merit of the Oakland philosophy. Value-driven methods can put a winning team on the field, leading to higher revenue from ticket sales and television viewing figures—all at minimal expense. The year before, in fact, the owner of the Toronto Blue Jays had hired the A’s director of player development, J.P. Ricciardi, as the Blue Jays’ GM, hiring him right on the spot. Ricciardi, who had learned at the feet of Beane and Paul DePodesta, begins remaking the Blue Jays along similar lines, bringing in a team of outside analysts and number-crunchers and shedding team payroll in a drive for sabermetric efficiency.
(Shortform note: Ricciardi’s tenure as Blue Jays GM was largely viewed as a disappointment in Toronto. In eight seasons from 2002-2009, Ricciardi never assembled a team that reached the playoffs.)
The Boston Red Sox are also coming to believe in the sabermetric revolution. New owner John Henry hires Bill James (Henry is shocked that no other baseball team has ever tried to hire James), as well as DIPS inventor Voros McCracken. But there is one more missing piece of the puzzle in John Henry’s quest to remake the Red Sox: Billy Beane.
Henry offers Billy a five-year, $12.5 million contract to take the GM job in Boston. It is a tempting offer, but Billy ultimately declines. He realizes that the only reason he is interested in the job is for the money. As a fresh-faced high school graduate, he had made the decision to sign an entry-level contract with the Mets and become a professional baseball player. It was the only decision he had ever made for money—and it had been the worst decision of his life. He vows to never make that mistake again.
Billy has finally fulfilled his destiny as a winner, but in the front office rather than on the field. In his 20+ year journey through the world of professional baseball, Billy has finally proved his value. And there is no putting a price on that.
(Shortform note: In 2015, Billy Beane was promoted to executive vice president of baseball operations for the Oakland A’s, after serving nearly 20 years as GM. In 2009, Sports Illustrated named him one of the “Top 10 GMs/Executives of the Decade.” His methods of player evaluation have now been widely adopted across Major League Baseball.
Paul DePodesta is currently the chief strategy officer of the NFL’s Cleveland Browns, and has enjoyed a long and successful career as a professional sports executive.)
Think about the main lessons from Moneyball.
Why do you think that baseball traditionalists were so opposed to the way in which Billy Beane ran the Oakland A’s?
Why do you think that players who excelled at flashy plays like stolen bases were so heavily overpriced relative to their actual contributions to team success?
Why did old-fashioned baseball statistics like RBIs and batting average inaccurately measure player performance?