The End of Moneyball

I remember reading the seminal book Moneyball and wondering to myself, why is Billy Beane letting Michael Lewis spill all his secrets? Beane had created a juggernaut in Oakland from 1999-2006 with a payroll that could hide in CC Sabathia's shadow. He had done so by exploiting inefficiencies in the baseball marketplace.

Beane had determined that other teams were overvaluing batting average and paying little attention to on base percentage, so he signed unwanted walking machines like Matt Stairs for pennies on the dollar. 

He discovered that any decent pitcher with some moxie and reasonable righty-lefty splits could get three outs in the ninth, but that other GMs still drooled over saves. So he let his hard-throwing closer rack up saves, traded him for good young players, and then plugged in the next guy. Shampoo, rinse, repeat. 

Beane recognized that the on-field manager isn't a field general; he's a squad captain with good personal skills. So he told his manager, Art Howe, who to play and how much. When Howe sought genius money after leading the As to the playoffs, Beane let the Mets pay it and hired another middle manager.

He realized that the best predictor of a pitcher's future success was his college baseball aptitude, not his build, or his athleticism or the speed of his pitches or other mysterious elements.So he avoided drafting high school pitchers, who had a very high bust rate.

Beane knew that buying baseball players on the free market could sink a low-income franchise if they didn't pan out. At the same time, players' salaries are immune to free market forces in their first four years in the Majors, and then are still undervalued through arbitration in years 4-6. (On average, players can expect to earn 40% of their free market value through arbitration in year four, 60% in year five and 80% in year six.) So he milked the core of his team --Tim Hudson, Mark Mulder and Barry Zito -- until just before free agency, when he traded each of them for a shower of good, young, underpaid performers. This effort provided the A's with Rich Harden, Dan Haren, Joe Blanton and Justin Duchscherer, among others, while only Hudson of the original trio has come within an elephant's butt of delivering value to his new team.

Since Beane's success depended on suckering fellow GMs, why on earth would he let someone publish his strategies? The answer, it turns out, was that other teams were on to Oakland by 2003 and were eliminating those market inefficiencies. In fact, the A's shortly thereafter turned away from OBP and began stressing defense as the next undervalued commodity.

By 2007 or 2008, whatever market inefficiencies existed were difficult to find and hardly worth exploiting. Baseball fans and sportswriters may not accept the conclusions of new baseball research, but all 30 franchises have and they are toiling diligently to develop their own, proprietary insights. Billy Beane's big advantage is gone.

The result, in case you haven't noticed, is that the A's are simply a low-budget team with predictable results -- between 10 and 12 games below .500 each of the last three years. Even if they squeeze value out of players now, with their lowest-in-the-league $57 million payroll (the Yankees are somewhere around $210 million), getting a lot for their money still leaves them under .500. To wit: the A's signed Kevin Kouzmanoff to staff the hot corner this year for $3.1 million, roughly one-ninth of Alex Rodriguez's pay. If Kouz is three times as effective per dollar as ARod, he's still one-third the player.

Beane's strategy these days seems to be to wring value out of the last bastion of sabermetric research -- middle relief -- and to take calculated flyers on low-cost retreads and imports. The $10 million gamble on Ben Sheets is a prime example of that. Sheets has a golden arm, but has been healthy about as often as the Haitian economy. And so, the once vaunted Oakland sabermetric machine will present the good people of the East Bay with a roster including the likes of Coco Crisp, Kurt Suzuki, Rajai Davis and Jack Cust. No wonder Michael Lewis moved on to the thievery on Wall Street.