The Baseball Economist: The Real Game Exposed (11 page)

John Smoltz, who pitched for Mazzone in the minors and majors, said:

He’s had a lot of great pitchers. One would say that he’s had an easy job. I’d disagree with that. I’d say he hasn’t screwed it up. He’s done a great job of not screwing it up. A lot of other people could have messed it up. Personalities sometimes get in the way, but for the most part, everyone’s who’s been under the system—myself, Glavine, Maddux, Charlie Leibrandt, Avery— despite how much grief we give him personally, we all would acknowledge that he’s helped us a lot in our career. What we were able to accomplish, what we were able to do? It certainly can’t go unnoticed.
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Jorge Sosa, who had an ERA that was half his previous career average during his one season with Mazzone, said:

I am where I am today thanks to Leo, because he helped turn me into the pitcher I am.
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And Jaret Wright went further in his praise than seems deserved, but his enthusiasm is unassailable:

Physically, everything came together, and Leo’s philosophy jelled well with where I was at in my career. He definitely helped me, and it’s stuff I don’t know if I would have figured out on my own. But once you know it, you can move on and keep what he taught you.
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Leo Mazzone’s influence seems to extend beyond a simple training strategy or secret method for his pitchers, and both starters and relievers benefit from his oversight; furthermore, pitchers seem to lose the Leo magic when they leave Mazzone’s guidance. If the powers that be ever decide to open the Hall doors to pitching coaches, Leo Mazzone has a very strong case.

6

The Big City vs. Small City Problem

—FINAL REPORT OF THE BLUE RIBBON PANEL ON BASEBALL ECONOMICS
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IS THERE SOMETHING FLAWED in MLB’s current structure that leaves some teams always on top and others always on the bottom? Commissioner Bud Selig, the former owner of the small-market Milwaukee Brewers, has long argued that the fact that some cities are bigger than others puts the smaller cities at a disadvantage. Does this supposed competitive imbalance threaten the game?

All of the major professional sports teams in North America represent geographic areas. And though the geographic origins of sports competition seem perfectly natural, the continued association of sports teams with regions is not so obvious. For example, professional tennis, golf, and auto racing all involve competition among participants who represent only themselves. Couldn’t team sports operate in the same manner? Professional sports teams are composed of players from all over the world, who may not even reside in the cities of the teams they represent. Television allows fans to watch games from anywhere in the world. Why couldn’t the Atlanta Braves become the Coca-Cola Braves, barnstorming the U.S. or just playing in front of cyberfans in Holly-wood, garnering followers from all over the country? The economic necessity for geographic organization of sports teams has passed, but professional athletes continue to play as representatives of cities, states, or regions. Why does the geographic structure of all professional team sports leagues persist?

Local ties give fans like me something extra to cheer for. It is not easy for a Southerner to root for the Yankees, as my father found out when he moved from New York to Tennessee in his youth. While geographic proximity is no longer a prerequisite for watching a baseball game, the home team is easy to grab on to for fans who don’t closely follow the game. Fans who reside outside of a metropolitan area with a baseball team don’t have a home team to support, but those who do have a built-in reason to like the team. Win or lose, these teams evoke a sense of identity and pride that induces people to become fans. It is ordinary to hear sports fans say “we” in reference to a team they follow, and the logic is straightforward: the Reds play in Cincinnati; we live in Cincinnati; therefore, the Reds are
our
team.

Participants in sports without geographic representation sometimes have a hometown following; but when Bill Elliott wins a NASCAR race, no one in Dawsonville, Georgia, says, “We won,” like baseball fans do when their team wins. These professional athletes have no homefield advantage because they have no home field. It’s easy to see how such sentiments can lead to more fans and generate more revenue for owners. And if more fans mean more money, then owners will attempt to locate teams in the most populous cities. It is no surprise that MLB has at least one team in all but two (Portland and Sacramento) of the top twenty-six cities in the U.S. The greater the fan base is, the greater the revenue owners will receive.

However, this is where the problem starts. The Blue Ribbon Panel, which Commissioner Selig organized to study the impact of market size on competitive balance, identified the importance of fan-base size for the profitability of teams as a fundamental flaw in MLB’s inherited league structure. The following is from their final report in 2000:

Many observers of MLB believe that the root of the competitive balance problem is the fact that clubs located in smaller or less fertile markets are unable to generate sufficient revenues to support the level of payroll necessary to be competitive on the field. The inability of a club to generate sufficient revenue in a particular market may be related to a lack of population, poor demographic composition, a lack of sufficient corporate presence and/or the proximity of other clubs.
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It just so happens that North America lacks thirty identically sized cities. Table 12 ranks the population of every metropolitan area with a major-league team. Extending the logic that geographic ties generate fan loyalty, this means that bigger cities ought to yield more revenue to owners than smaller cities. More people means more loyalty expressed
in fans purchasing tickets. Teams in large cities have a greater pool of fans to enjoy wins; therefore, wins ought to be more valuable to big-market teams than small-market teams. In an open market for players, the best players will gravitate toward the teams with the highest salary offers. This means trouble for teams in small cities, because the big cities will be able to pay higher salaries that teams in small markets cannot match. While an extra win per season in Kansas City may increase yearly attendance by 10,000, one more win for a New York team could generate a 100,000 more fans, as New York has the population of ten Kansas Cities.

So much for the notion that teams should have a near-equal shot at winning. The joy of competition is watching players on the field exploit all of their abilities to win the game. The uncertainty of the outcome is part of the thrill of witnessing sports events. If fans just wanted to watch good games, they could simply go to ESPN Classic Sports. The uncertainty of the outcome is important, if not critical, to the fun of watching. If certain teams have an advantage over other teams solely due to the population of their fan bases, the indeterminacy of competition disappears. The end result of competitive imbalance from the league’s standpoint is that fans will stop watching the sport altogether.

At first glance, the recent history of baseball seems to confirm our suspicions that the population bases of teams influence the play of the game on the field. Over the past decade, the New York Yankees— representing a metropolitan area of 18 million—have been a dominant team, while several smaller markets—such as Milwaukee, Kansas City, and Pittsburgh—have been pushovers.

Although larger cities may have a revenue-generating advantage over smaller markets, it does not mean necessarily that small markets are doomed to perpetual failure. As long as the advantage is not too large, the league may possess a sufficient level of competitive balance. And any prolonged under/overperformance by small/big-market clubs does not prove market size to be the main culprit. Poor management and plain old bad luck may be contributing, if not dominating, factors.

In order to determine whether or not there exists a problem that needs correcting we must measure how market size translates into wins and losses. Do big-market teams have an insurmountable advantage over clubs in small markets? To find the answer, I use regression analysis to measure the effect of city size on wins. Using the metropolitan population of MLB cities as a proxy for the size of the fan base, the regression estimates the magnitude of the impact of population size on on-field success. The regression uses the data to identify how much differences in population are associated with differences in wins. With this information the regression procedure generates a predicted number of wins based on population size.
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The results from the analysis both confirm and reject some widely held beliefs regarding market size and winning. It is true that larger populations are associated with more wins than smaller markets; however, the magnitude of the impact explains only a minority of the difference in wins between the best and worst teams in recent history. Figure 2 maps population and average wins per season.

Each point in the figure plots the average wins by team from 1995 to 2004 and the population of the metropolitan area of the city as measured by the 2000 U.S. Census. The upward-sloping line shows the estimated relationship between wins and city size. The upward slope of the line matches the casual observation that for the past decade teams in big cities have won more games than teams in smaller cities. This is consistent with the theoretical prediction that big cities have more revenue than small cities to use on free agents, coaches, management, minor leagues, etc.

However, the story does not end here; the real question is
how large
is the big-city advantage? The regression estimates that every 1.58 million residents generates one extra win per season. For illustration, the largest market (New York) is expected to win 10.61 more games than the smallest market (Milwaukee) in terms of wins predicted solely by population. In this sample, the most successful of the New York teams
(the Yankees) won an average of 26.3 games more than the Milwaukee Brewers. This means the difference in market size explains about 40 percent of the difference in wins between the top and bottom markets. Forty percent isn’t chump change, but what about the other 60 percent? These factors include the ineptitude and skill displayed by the front offices of these organizations.

On the ineptitude side, Joe Posnanski of the
Kansas City Star
recounts a story that points to an example of mismanagement of the Kansas City Royals—the second smallest MLB market and a perennial looser—that ran sabermetrics guru Bill James out of town and into the open arms of the Boston Red Sox:

It was Brent Mayne who finally broke Bill James. It’s nothing personal. Mayne is a fine fellow. But he’s also a 34-year-old catcher who hit .236 with no power, ran like he was a mime fighting the wind, guided the Royals pitchers to the second-worst ERA in baseball and got paid $2.5 million. This year, the financially strapped Royals will pay him $2.75 million. Meanwhile, catcher A. J. Hinch, who hit .298 the last two months of the season, banged the ball with significantly more power than Mayne and had a much better record behind the plate—plus, he’s a bright, loyal team player who got paid $250,000—was cut during the offseason. And that’s when James threw his hands up in the air. It’s not that he thinks Hinch is Johnny Bench or that he blames Mayne for the Royals’ downfall. It’s not that this was the dumbest thing the Royals have done, or even in the top 100. No, it’s just another spectacularly illogical move by a team that has become the new sports leader in spectacularly illogical moves. This is just the move that finally pushed Bill over the cliff.
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If you are looking to blame something for the woes of your favorite small-market club, don’t just jump to blame the inherent inequities of the league. Small minds can be just as dangerous as small markets.