In a recent TSE post, Brian writes:
The league’s testing procedure (“analytic evidence”) uncovered only 13 users from 2009 to the present. Yet, now there is strong evidence that many players not only using PEDs, but doing it right underneath the nose of the testing process. Whether through MLB’s feckless attempts or the Player’s Association foot-dragging, the testing procedure is a joke. Players are tested upon reporting to spring training, providing them with full knowledge of the test’s timing. MLB should just include a warning sign to users – if you are using PEDs, then stop or mask them before this date. During the season, the collective bargaining agreement allows for one random test. So, once that is out of the way, a player can supplement with PEDs to their heart’s content without the threat of a test. Of course, cycling and Olympic sports have shown that sophisticated doctors, labs, and chemists can mask PED use quite well even with more randomized tests, but baseball’s procedures don’t even make it difficult.
This raises an interesting question: why has MLB been feckless in reigning in PED use? The answer is in the absolute quality of play.
The absolute quality of play refers to the overall quality of competition. In American baseball, the absolute quality of play is higher in MLB than in the minors. The higher the absolute quality of play, all else equal, the higher the demand for the sport.
PED’s, well, enhance player performance, making them faster and stronger, and allow players to recover faster from injuries. If a sufficient number of players use, then the absolute quality of play, as perceived by fans, will improve. If fans don’t really mind whether players use, we’d expect there to be more demand for baseball and higher revenues for teams.
The increase in fan demand should also be reflected in higher player salaries. As long as the revenue increase exceeds the salary increase, then looking the other way on PED use is what we would expect.
Companies have long been able to insure their most valuable assets against loss. In sports this means that teams can take out insurance policies that protect them against injuries to their marquee players.
But apparently, player injury insurance is no longer available solely to real team owners but also to fantasy team owners as well. Fantasyplayerprotect.com now allows fantasy football owners to salvage their season in case of injuries to their key players. For example, for a mere $16.50, you can insure a $100 league entry fee against a season-ending injury to Adrian Peterson.
Kudos to the company for providing a market where none existed before, but from an economic standpoint, it is not at all clear that purchasing this type of insurance makes sense. Because insurance companies need to make a profit, the expected value of an insurance contract is always lower than the actual price of the insurance policy itself. In other words, insurance buyers typically take a loss in expected income by purchasing insurance.
Insurance may make sense from an expected utility standpoint, however, since it protects individuals from large, unaffordable losses. We buy homeowners insurance, not because we plan on coming out ahead on premiums vs. payouts, but because most of us don’t have $300,000 sitting around in the rare chance we have to rebuild a house that burns down. However, if one can afford to take the hit when things go bad, it is almost always best practice to self-insure.
While Peterson going down almost certainly destroys the Vikings’ chance of making the playoffs, it is hard to imagine an Adrian Peterson injury causing “unaffordable” financial hardship for most fantasy owners, and therefore the $16.50 that insurance would cost is probably better spent on beer and guacamole for your draft party.
(Thanks to Ron Gecan for pointing out that there is, in fact, and market for absolutely everything, and to Arnie Quinn for a bit of research assistance.)
In criminal justice studies, the problem of separating actual crime from enforcement policies across jurisdictions is well known. Over the past decade, cycling has suffered from a decade of embarrassing revelations about steroid and other PED use. The suspension of 13 major league players, including one of its all-time sluggers, Alex Rodriguez, it exposes the pitiful weakness of MLB’s testing process and penalties for PED use. Use may have been no less than cycling, just pursued with less vigor.
The evidence in the recent case is best described as “out of the blue sky” in that it hit MLB in the head through no effort of their own. A former disgruntled employee of the Biogenesis lab purported to have supplied the players with PEDs started the process in motion. To its credit, the league then pursued the case with vigilance by bringing suits against former employees in order to obtain records.
The league’s testing procedure (“analytic evidence”) uncovered only 13 users from 2009 to the present. Yet, now there is strong evidence that many players not only using PEDs, but doing it right underneath the nose of the testing process. Whether through MLB’s feckless attempts or the Player’s Association foot-dragging, the testing procedure is a joke. Players are tested upon reporting to spring training, providing them with full knowledge of the test’s timing. MLB should just include a warning sign to users – if you are using PEDs, then stop or mask them before this date. During the season, the collective bargaining agreement allows for one random test. So, once that is out of the way, a player can supplement with PEDs to their heart’s content without the threat of a test. Of course, cycling and Olympic sports have shown that sophisticated doctors, labs, and chemists can mask PED use quite well even with more randomized tests, but baseball’s procedures don’t even make it difficult.
Beyond the testing, baseball’s CBA permits only a 50 game suspension for the first positive test. A second positive test incurs a 100 game suspension, still less than a year. At a third test, the hammer comes down with a lifetime ban. Given the extremely low probability of being caught even one time, it’s not hard to see how players tempted by PEDs descend into that pit. If I assume that the likelihood of the testing process catching a user is 1 in 100 (the data suggest its even smaller), a player’s “expected value” of games lost is less than 1. So, the threat of lost games is trivial. The threat of embarrassment is likely a greater deterrent, at least for some players.
A cynical viewpoint is that MLB’s foot-dragging on PED testing and punishment makes some strategic sense. After all, cycling’s public relations wounds seem self-inflicted through its enforcement. That viewpoint maybe correct, but until recently, it has only been implemented by the cooperation or, at a minimum, complicit actions of the Player’s Association. All of a sudden, the voices of the anti-steroid players have grown loud. This heightened degree of peer scrutiny and disapproval may prove a stronger deterrent to use than the current or even stiffer policy.
Here’s a lengthy excerpt from an interview with Missouri AD Mike Alden published in the Columbia Daily Tribune:
Q: Should the NCAA take another look at its stance on amateurism?
A: I think it’s healthy to do that. I think if you step back and say, “No, we’re not going to touch that,” it’s a different age today. Now, you might not change anything. I have no idea. But should they step back and have the membership and others take a look at that and say, “Hey, do you really want to rethink this model?” Sure. It’s no different than when we relaxed all of those regulations on men’s basketball, allowing unlimited texting, and everybody thought, “Oh my gosh, this is a whole different thing.” Shoot, that’s worked out fine. It’s been good for the prospective student-athletes, it’s been good for the parents, it’s been good for the coaches, it hasn’t given anybody a competitive advantage, so I think that it’s really healthy to analyze your entire organization regularly, and I think amateurism would be an issue that you should look at and say, “Do we have the right model? Is there some tweaking, some adjustment we can make here.” …
It’s no different than asking, “Should we take a look at an additional division within Division I?” I happen to think that you should. I think that there are 60-70 schools that are different than everybody else in Division I. Different than anybody else and I think the time has probably come where we need to recognize that, that what goes on Michigan State is different than what they have to deal with at Eastern Michigan. It just is. What happens at Illinois is different than what they deal with at Illinois State. So let’s recognize it, let’s admit it, and let’s just say, “OK, let’s find the commonalities of those 60-70 schools and let them deal with some of the issues they need to deal with” while at the same time there are other common denominators that all of us have to deal with — whether it’s amateurism or whether it has to do with minimum hours toward graduation or standardized test scores, whatever that may be. All of us should have to deal with that. But I do think the time has come for us to look and to admit that there are 60 schools to 70 schools that are different than everybody else.
Q: That was going to be my next question was about the fourth division. Part of the problem at the core of this is that they in the last 20 years, made it so easy to move to Division I. Did you have a sense as that whole process was going on, that this was getting too big?
A: It’s funny you say that because 15 years ago I was the athletic director at Texas State, an FCS, I-AA football program. Their aspirations always were to be Division I — Division I-A. Now, I was there. I’m living this. Texas is right down the road. I’m living in a stadium of 95,000 people at that time. Now it’s over 100,000. I’m thinking, “It is so much different at Texas than it is at Texas State. Why should we even imagine that we should be Division I-A?” The answer generally that you’ll see is that we want to associate with I-A so we can look like them. We can get the afterglow effect, the ability to be able to be touched by it. So when you saw that happen and when you saw Louisiana-Monroe saying, “This is what we need to do,” when you saw Arkansas State saying, “This is what we need to do” and you saw UT-San Antonio. And again, that’s not to offend them. That’s just the reality of that.
There couldn’t be anything more different than night and day between Texas State and the University of Texas. There’s nothing. So when you saw the gravitating, going from 110 programs to 112 to 116 to now 120, whatever.
Mr. Alden makes a point that I have felt for a long time: the NCAA, especially Division 1/FBS, is simply too big. The economic differences (i.e. willingness to pay for tickets, to donate, etc.) between the fan bases of, say, the top tiers and lowest tiers makes the current NCAA structure an unstable equilibrium. What will it look like in 15 years? Only the shadow knows.
The Tampa Bay Rays are definitely an economic anomaly in Major League Baseball (MLB). As of July 30, 2013, the Rays are in first place in the American League (AL) East, sitting just a half game above the Boston Red Sox in an exciting pennant race. Yet the Rays payroll of only $57 million pales in comparison to $159 million payroll of the Red Sox (source). This is not another Moneyball story, rather, the Rays just seem to have a really good farm system that keeps producing productive players. This is a story about the Rays attendance and poses the question how long can the Rays ownership survive in Tampa Bay? Stuart Sternberg, owner of the Rays, was quoted in 2011 as saying
“When I came in here in ’05 and ’06, I saw the stars, and I was confident that we could put a winning product on the field — and I was told by you guys and others that all we needed was a winning team. Well, we won. We won. We won. And we won. And it didn’t do it.”
Sternberg is referring to profit when he referred to “all we needed was a winning team”. Sternberg made significant investments in talent for the start of the 2007 season and the payroll jumped to $57 million. The results began to show in the 2008 season when the club won 97 games, clinching the Eastern division pennant but losing the World Series in 5 games. Unfortunately the tremendous success did not translate into fan interest and the club experienced only a modest improvement in revenue for 2008, but did move up somewhat compared to the MLB average revenue. The Rays made the playoffs again in the 2010 and 2011 seasons with the payroll reaching $80 million in 2010. But revenues did not keep up and profits shrank to levels below the 2005 season (it is quite likely that the Rays benefited from baseball’s revenue sharing agreement much more in 2005 than in 2010). By the end of the 2011 season, Sternberg gave in and cut the Rays payroll to $40 million.
The Rays are a strong contender in 2013 to win the AL East pennant and move into the playoffs. Sternberg upped the payroll by acquiring all-star reliever Jesse Crain from the White Sox on July 29 and they appear to be gearing for a pennant run. Unfortunately Ray fans have not responded at the gate. Per game attendance is down by 2,860 from the 2012 figure and the Rays have the second lowest attendance in MLB (source) only slightly above the far-worse performing Miami Marlins, despite the Rays having a better winning record compared to this point last season. What gives in Tampa?
The standard economic model of a professional sports league is not working in Tampa. Revenue is a function of winning in that model, so attendance should be surging and so should revenues at the single equilibrium the model assumes. Putting aside the notion that Sternberg only receives utility from the satisfaction from winning (see the quote above), the model needs to be overhauled. Or does it? It is simple to augment the standard model to generate more than one winning equilibrium: small market clubs can have a low and a high winning equilibrium, but only the low equilibrium achieves the globally highest profit. Steve Easton and I generate such a result in our forthcoming book (Springer) that is based on our 2010 paper published in the Journal of Sports Economics. The burning question is why a profit-maximizing owner would wish to move to and stay at the high equilibrium, even though it is only a local profit maximum? Revenue sharing helps the Rays for sure, but that can’t be enough. We suggest some answers, citing the Hubris effect, the desire to have the local government build a new stadium, or that owners care more about maximizing the sale value of a club rather than current profits. If all this fails, then Rays fans had better start supporting the team or the team could leave (maybe the fans don’t care). All good for me since there are rumors of a potential owner with deep pockets owing a team in Montreal. Les Expos?
Yesterday the US Men’s national team wound up a successful Gold Cup, the biannual North American soccer championship, by beating Panama 1-0 in the title match. The US win was an all-time record 11th in row for the Americans who dominated the tournament from start to finish. While the US does not have a particularly strong soccer tradition, winning the title came as no surprise. Since the tournament began in 1991, the US has a 48-6-7 record in the tournament, has won the championship 5 times, and has another 4 second place and 2 third place finishes to its name. There is one simple reason for the Americans’ success: economics.
There is a fairly lengthy scholarly literature on the relationship between sports success and economics. Whether one looks at medal count in the Olympics or FIFA rankings for either men’s or women’s soccer, there is a strong correlation between population, GDP, and GDP per capita and sports success. A large population gives a country a large pool of potential athletes from which to draw, and a high GDP or GDP/person gives the country the resources required to adequately train its athletes.
Thus, it should actually come as no surprise that the US is the dominant soccer-playing country in its region. It has a GDP five times larger than the rest of North America combined and a population that also exceeds the rest of the continent. Aside from the US, only Mexico, a six-time winner of the Gold Cup, is consistently a real challenger for regional supremacy, and again it is all about economics. Excluding the US and Canada, Mexico’s population is larger than the rest of the continent combined and its economy is roughly three times bigger. Indeed, Canada, with the region’s second largest economy and third largest population, is currently the real underachiever.
So, kudos to the Americans for their on-going win streak and latest championship, but let’s keep things in economic perspective. Aside from a nice win against economic and soccer power Germany to begin the streak, the American’s last 10 wins have come against countries with a combined GDP of roughly the same size as Boston’s.
Milwaukee Brewer Ryan Braun surpised the baseball world this week by admitting his use of steroids and accepting a suspension. Of course, after failing a drug test and avoiding suspension on a technicality, he only admitted the obvious and after months of denial. I suppose there is some honor in that.
My question for players is why hasn’t the MLB Player’s Association emerged as a stronger voice against PED use? Yes, there should be due process protections for suspected players, but the MLBPA has never stepped out front on this issue. And, yes, there are now indications that times may be changing as I note below. For a long time, however, the pressure has run the opposite direction — protect the users, silence the critics. That’s certainly the case a few years back when Mets player representative, Tom Glavine, told fellow Met Turk Wendell to shut up about PED use.
The campaign to reduce or eliminate steroid use in baseball usually comes across as either a push by outsiders (media, drug testers, former players…) or by league management. Yet, the strongest case is internal — clean players against those who are users. Roy Oswalt stated the case with force in this 2009 MLB.com article:
“It does bother me,” Oswalt said. “Especially for the guys that went out there and did it on talent. We’re always going to have a cloud on us, and that’s not fair at all. “The ones that have come out and admitted it, and are proven guilty, [their numbers] should not count. I’ve been cheated out of the game,” Oswalt continued. “This is my ninth year, and I’ve done nothing to enhance my performance, other than work my butt off to get guys out. These guys [who took PEDs] have all the talent in the world. All-Star talent. And they put times two on it. “I’m going out there with the ability God gave me. They have that ability, too, and they’re putting something on top of it.”
Such strong statements by players are rarely heard and certainly not taken up as a banner by the Player’s Association. Roy Oswalt is not the voice of the MLPA. The internal politics of the MLBPA that continues to drag its feet intrigues me. What drives this deference to users? Why isn’t the MLBPA out front on the matter? Why isn’t it pushing for longer suspensions and more frequent testing? Why are players still snared by backdoor investigations of labs rather than up front testing? The political possibilities include:
1. A majority of players are users and dominate the MLBPA’s voice through sheer numbers. That would not have been hard to believe in the 1990s or early 2000s, if the now believable statements by players like Jose Canseco or Ken Caminiti were, indeed, accurate. While, clearly, many players are still using, one would think that the percentage has dropped, even with MLB’s rather weak testing and penalties.
2. Star players are at risk who have greater than average influence on the association’s leadership. Whether Ryan Braun, or players on the list associated with the Florida lab such as Alex Rodriguez, these are high profile players. Their status makes player reps and union leadership reluctant to be aggressive.
3. The institutional culture of the MLBPA enforces a fraternal conspiracy of silence. Members of close-knit organizations or insiders frequently adopt standards that strongly discourage negative revelations, even when it works to the detriment of the group, and, in retrospect, even seems stupid down the line. Anyone who steps out of line becomes a disloyal “narc.” This kind of thing is seen among police, military units, and even in the Penn State case. Glavine’s assault on Wendell fits this to a tee.
Whichever of these or some combination of them have held sway, a couple of pieces by ESPN’s Buster Olney signal that the non-user players are becoming more vocal against the users.
The NYTimes has an article about keeping score at baseball games.
But today’s fans go to ballparks that feature upscale restaurants, play areas for children and other attractions besides the game. Digital apps aside, there are also e-mails and social media sites to check, photos and videos to shoot, phone calls to make.
I didn’t become a baseball fan until after I graduated high school and I didn’t go to my first baseball game until I was 21 years old. A friend and I drove from my hometown of Sioux City, Ia to Kansas City to watch the Royals play the A’s and Jose Canseco. I was too excited to see my first game to even think about keeping a record of the game and, admittedly, didn’t realize there was such a thing as formally keeping score. So I was well into my adult years before I learned to keep score.
The first time I remember keeping score was at an Omaha Royals game, probably in 1989. I bought a program and found a scorecard inside, got a pencil, read the program’s instructions on how to keep score, and, well, kept score. It wasn’t a hard thing to do.
I usually don’t keep score when I go to games these days and I can’t tell you the last time I kept score at a professional game. If I’m at a game, I’m likely there with my family and I’d rather talk to them and take in the atmosphere of the game. Oh, and I must use my smartphone.
The last time I kept score was a couple of weeks ago at my 11 year-old’s baseball game. If you’ve ever seen 11 year-old baseball, there are a few hits. But there are lots of BB’s, K’s, HBP’s, WP’s, PB’s. Oh, and there are lots of E-x’s where x = (1,2,…,9). So they kept me busy.
And off my smartphone.
The oldest prize in Test cricket is once again up for grabs. Commencing earlier today, Australia is taking on England away from its own backyard in an attempt to regain the Ashes. Michael Clarke’s men have shown transparently that this one is the series they have the greatest desire to win, despite the old urn’s grossly underwhelming aesthetic stature.
Following its creation as the spoils of victory in series between these combatants in 1882 (though curiously never designated as such formally), its place in the sport as a bilateral trophy (one that can be won only by either of two teams) was unique for almost 80 years.
This changed only during the remarkable 1960/61 West Indies tour in Australia, which was capped with the minting of the Frank Worrell Trophy, to be contested thereafter between those teams. There has more recently been a real proliferation of these trophies, especially since the mid-1990s.
Currently, with 10 Test playing nations involved in World cricket, there are consequently 45 bilateral sets of opponents, and a total of 11 different bilateral trophies (effective since 2008) are now actively played for periodically, with Australia being the ‘worst offenders’, playing for 6 such trophies out of its 9 Test rivals.
Cricket fans – please feel free to disagree, but one’s personal view is that with the Ashes an obvious exception (given its history), many of these other bilateral trophies are surplus to one’s interest above and beyond the simple significance of the Test series and its ultimate result, and often play a role of little more than a shameless gimmick, and a diminution of the actual cricket.
Nonetheless, in any individual Test series, the simple tactical objective is generally to win the series, and if that becomes mathematically impossible or even improbable, a series draw is still better than a loss.
A complicating factor in cricket, however, is that there is no universal consensus – the ICC ranking system aside – on the value of a draw relative to a loss, unlike other sports where league points make this explicit (one-half in many sports, one-third in modern soccer). The existence of a trophy, assuming that ‘holding’ it really matters to players and fans, muddies the tactical waters, as the holder has to be beaten for the ‘silverware’ to change hands.
There is relevance in this setting of interest to microeconomists through incentives and strategy. Sporting contests have much potential to tell us economists more than a thing or two about the way firms behave in duopolistic industries where the competitors are not equally resourced.
Assuming there is some value to holding the trophy, potential follows for this value to skew attacking and defensive tactical decisions of both captains, comparative to the identical series scenario where there is no trophy on the line.
This upcoming series can be used to illustrate a textbook case of how a bilateral trophy being at stake may just alter team behaviour at the margin. However unlikely you think it, suppose the series is level at 1-1 after four Tests, and that late on day five of the fifth test, the final and deciding game is on a knife’s edge (and that a draw is still a comparable possibility).
Since 1-1 is not good enough for Australia to return home with the prize (England currently holds the Ashes), it is easy to envisage how Michael Clarke would throw caution to the wind to give his XI every possible chance of winning the decider, not to mention what Alistair Cook’s ‘game theoretic’ tactical response might be.
In the counterfactual that there exist no Ashes for him to regain, rather it’s purely the series outcome that matters, one might imagine how he may turn defensive to suffice for a draw and (arguably) claim a moral victory in levelling an away series against a significantly more favoured team. The inclination for him to do this might be accentuated if his captaincy and/or personal form were under scrutiny during the series, with equal honours perversely providing him some measure of vindication.
Even if you summarily reject any possibility that Clarke would ever sway toward that tactical inclination, you might be willing to accept how Zimbabwean skipper Brendan Taylor would analogously almost certainly opt for any stalemate within reach at the death of an away series to their neighbours – the World top-ranked South Africans.
At any rate, I suspect that fans of Australian cricket will have a wide range of views about how they will feel about a drawn series. Many will consider it equivalent to a series loss, since the Ashes are not regained either way. Others like me, with the recent 4-0 whitewash in India still fresh in the mind, will still take some matter of pride in averting a third successive series loss against the old enemy.
In 1988 for the Oakland Athletics, Tony LaRussa initiated his strategy of using Dennis Eckersley as a 9th inning, only-when-leading relief pitcher – a “closer.” The move helped the A’s and resurrected Eckersley from an over-the-hill starter to Cy Young and MVP winner. The success of the Athletics and Eckersley popularized the practice with it eventually attaining universal adoption across MLB. Specific elements of the Eckersley case made the strategy make sense. He was an aging starter with a lot of inning mileage in his arm. Restricting his innings and making them very predictable so as to ease warming up improved his performance and extended his career while helping the team. Beyond his case, however, was the the universal adoption of the practice evidence of it’s wisdom or a case of mindless managerial imitation?
Among all closers over the past 25 years, the Yankees’ Mariano Rivera leads the pack as the most celebrated. Yet, one can make a strong case that he has been underutilized. Arguably, Rivera’s most impactful year was 1996, which preceded his use as the 9th inning closer. At that time, John Wetteland filled the Eckersley-esque role. By simple metrics, Wetteland performed very well, leading the league with 43 saves. Rivera’s numbers, however, both conventional and more sophisticated ones, bettered Wetteland while Rivera pitched nearly 70 percent more innings.
Glaring holes crop up in the universal adoption of the closer strategy. Foremost, as in Rivera’s case, it underutilizes great talent. The rationale might be summarized as “this guy is really effective, so let’s pitch him a lot less and only when we are ahead in the 9th inning.” Where else would that kind of thinking fly? LeBron James is killing the other team, so let’s save him until late in the 4th quarter to help preserve leads? Not only have closers become a universally accepted norm in MLB, but the successful ones command very high salaries. Rivera’s salary has rivaled that of the best starting pitchers even though he pitches 3 to 4 times fewer innings. Would a team pay huge bucks for a pinch hitter, even a great one by historical standards? (The fact that by some sabermetric measures, a reliever like Rivera can influence wins by half as much or more than a starting pitcher like Justin Verlander or Roy Halladay only calls into question those metrics. )
No doubt, certain pitchers, even though very effective, may be better suited to shorter relief appearances because of limited variety of pitches, pitching mechanics, or other issues as with Dennis Eckersley. Maybe Mariano Rivera and many other marquee closers fit this bill. Nonetheless, the nearly exclusive use in the 9th with leads defies easy explanation. Why not use the best relief pitcher in the most dangerous, pressure-filled situations? This is how the best relievers prior to the Eckersley era had been employed whether Bruce Sutter, Goose Gossage or others. Predictability of use, and therefore, ease of mental and physical preparation is sometimes offered as a reason, but use in tight games in pressure-filled situations is fairly predictable too.
The highly structured, ahead- in-the-9th inning (once in a while tied) is even harder to understand for teams struggling to win games. Perversely, it limits the best relief pitchers on the staff to situations that arise infrequently, or, else, puts them in “get-some-work-in” situations that matter very little. With the Yankees regular season success over his career, Rivera enjoyed many opportunities that fit the closer structure. However, in playoff series where the Yankees have struggled for leads, Rivera barely appeared. For instance, in the 2011 AL Championship Series, he pitched only one meaningful inning over 6 games (along with 2 others in blowouts just to “get work.”). Imagine any other player or any other sport where you pay a health guy $15 million just to sit on the bench in key situations.
