Innovations Keep Baseball Alive and Well

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It is amusing to hear people complain about Major League Baseball’s big financial disparities between large- and small-market clubs, and lack of competition. Usually this is a product of belief in the NFL’s self-glorifying propaganda or misplaced faith in the efficacy of the NBA’s central planning. To the contrary, MLB has demonstrated that a simplified and open league structure creates a competitive and exciting pro sports league.

In August 2002, MLB neared a reenactment of the infamous 1994 strike. Owners were bellyaching about losing money and the need to control spending, so the players threatened to strike. Pundits piled on the players by bemoaning a rising wealth disparity that would inevitably lead to a competition gap. Rich teams would purchase all the best talent and effectively price small-market squads out of contention. The nightmare scenario of the same teams making the playoffs and winning the World Series every year, thus killing off small-market franchises, seemed inevitable. 

On the surface, the prophets of doom had a decent case. The early 2000s saw some teams experience financial troubles (Minnesota Twins) and bankruptcy (Montreal Expos), and the specter of contraction loomed. Moreover, the New York Yankees had recently won four titles in five years and kept raising their payroll. The Atlanta Braves, Florida Marlins and Arizona Diamondbacks had followed suit by building champions through spending. 

A last-minute deal averted a likely season ending strike. Many probably assumed 2002 marked a reprieve instead of a final settlement on the financial questions. Yet, baseball flourished. No contraction occurred, although the Montreal Expos moved to Washington D.C. And from a financial standpoint, the sport has never been healthier. In 2012, MLB accrued $7.5 billion in revenue while the average value of a franchise rose to $605 million (an all-time high) according to Forbes Magazine

So what happened? How did MLB go from near ruin to success? The sport avoided the trap of “competitive balance.”

That phrase is a staple of discussion in the pro sports landscape, and a false hope. It implies that league officials can engineer a level competitive playing field that produces desirable outcomes. The NBA, and the NFL less so, have consistently demonstrated just the opposite. Centralized policies breed competitive imbalance by promoting standardization; think the omnipresent “Big Three” or “franchise QB” models. It is hard to have fluid competition when everyone follows the same idea. 

By contrast, baseball has competitive mobility. Beginning in 1995, MLB has seen a plethora of squads enjoy success. Some success stories endured, while others did not. But this instability says much about MLB’s open competitive structure, in contrast with its peer leagues. 

For starters, baseball has the fewest playoff slots and the longest regular season. Yet, not all the same teams make the playoffs every year. Beginning in 1995, only the Atlanta Braves and New York Yankees have had double-digit playoff streaks. No one else has made more than five consecutive trips to October. And, only three teams (Toronto Blue Jays, Kansas City Royals, and Pittsburgh Pirates) have zero playoff appearances in the post-strike era.

What about championship droughts? The numbers declare a triumph. Seven droughts longer than 25 years ended from 1995 to 2012; the Atlanta Braves in 1995 (38 years), Los Angeles Angels in 2002 (41 years after inception), Boston Red Sox in 2004 (86 years), Chicago White Sox in 2005 (88 years), Philadelphia Phillies in 2008 (38 years), San Francisco Giants in 2010 (56 years). Others such as the Cleveland Indians, Detroit Tigers, Texas Rangers, and Houston Astros at least won the pennant. Even recent expansion teams own a title (Miami Marlins and Arizona Diamondbacks) or pennant (Colorado Rockies and Tampa Bay Rays).

Central to competitive mobility is the capacity for clubs to stage quick turnarounds. Indeed, a decade of bad teams undergoing radical reversals has ended talk of five-year plans to progress from losing to winning. A glance at the standings from the past decade provides some memorable examples: the 2002 Los Angeles Angels (+24), 2005 Chicago White Sox (+16), 2006 Detroit Tigers (+24), 2008 Tampa Bay Rays (+31), 2011 Arizona Diamondbacks (+29), and 2012 Oakland Athletics (+20). 


The importance of the quick reversal should not go understated for two reasons. First, it generates fan interest. Every year since 2002, fans of losing clubs can validly ask themselves why not us? Second, and more importantly, quick turnarounds sometimes signal that a team innovated into a new way. The early 2000s Athletics of Moneyball fame and late 2000s Rays are excellent examples.  

By now, the story of those Athletics is well documented. But it is worth reiterating that GM Billy Beane did not invent the statistical analysis he used. He took existing literature, written by Bill James, and had the courage to implement it. He capitalized on baseball’s ingrained anti-intellectualism, to build a cheap offense that coupled with good pitching to produce eight consecutive winning seasons (1999-2006). However, despite its necessary myth busting, Moneyball did not lack excesses. 

One of the unfortunate oversights in Moneyball was the dismissal of defense, turning balls in play into outs, as “five percent of the game.” This is ironic considering how the Athletics’ AL West rivals, the Mariners, used a massively upgraded defense to win 116 games in 2001. But the defensive metrics back then were primitive and/or misunderstood. A few years later, the Rays began a necessary re-evaluation. 

The perpetual AL East bottom-feeder realized something that many had overlooked. Defense is less about not making errors (or fielding percentage) than converting balls in play into outs (measured by defensive efficiency). The Rays used their high drafts pick on versatile players, such as Evan Longoria, and premier pitchers, David Price, to build a run-prevention machine. And it worked brilliantly. The Rays allowed 273 fewer runs from 2007 to 2008 (944 to 671) and rocketed from last to first in defensive efficiency. The laughingstock became a contender, and initiated a league-wide trend toward run prevention.

Critics will inevitably claim the Rays’ sustained success is an aberration. But this charge misses the point. Winning is difficult, and must be built upon. Teams can and do regress for numerous reasons. Some falter because a winning season turned overwhelmingly on luck, such as a great record in one-run games; see the 2005 White Sox. In other cases, a trailblazer’s edge fades. The Athletics endured down years after 2006 because their success raised the cost of acquiring players previously identified as undervalued. The Rays may suffer a similar fate.

But beneath individual achievement is a collective benefit. Allowing teams to win by innovating diversifies competition. Baseball has adages about good pitching beating good hitting, and it lacks the one-size-fits-all models that plagues the NBA and NFL. Indeed, the wealth of literature on baseball since Moneyball demonstrates that open competition breeds self-corrections. Moneyball forced a needed discussion on statistical analysis, but erred on the importance of defense. Thankfully, smart franchises are correcting this oversight until the next breakthrough comes along.

Baseball is not past its time, not even close. The data, structure, and recent history affirm it as the most inventive sport. So as a new season dawns, fans should remember that hope springs eternal. And unlike the NBA or NFL, MLB means it. 

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