2: Case Assessing the Value of Alex Rodriguez
Teresa Sonka Gail Bernstein
Alex Rodriguez
First overall pick in the 1993 Major League Draft at age 17 Played with the Mariners for 5 years Set the American League record for home runs by a shortstop Became a free agent in 2000
Year Team Batting Avg. 0.358 0.3 0.31 0.285 0.316
Home Runs 36 23 42 42 41
RBI 123 84 124 111 132
Stolen Bases 15 29 46 21 15
1996 Seattle 1997 Seattle 1998 Seattle 1999 Seattle
2000 Seattle
Texas Rangers
Owned by the Southwest Sports Group The strategy of the founder, Tom Hicks, was to spend considerable resources on talent The Texas Rangers were one of the main teams interested in Rodriguez Needed to determine the incremental benefits of Rodriguez Wanted to determine an offer price that would attract Rodriguez without overvaluing him
Hitter is the Center of Attention
All eyes are on the hitter and no one notices the other basemen and outfielders until the ball comes their way We don't notice the third baseman until a hitter smashes a ball down the third base line and the third baseman makes a diving stop to throw the hitter out o Runs win games and hitters create runs o There are more significant offensive than defensive statistics
What is the most important offensive statistic for a baseball player?
A. B. C. D. E.
RBI Batting Average Home Runs Onbase percentage Slugging average
Important stats according to Moneyball
Slugging Average: Total Bases/At Bats Each base is weighted differently SLG = (1B + (2 x 2B) + (3 x 3B) + (4 x HR))/ AB For example, if in 1 inning a team sent 4 people to the plate and 1 got a home run but the other 3 struck out, the slugging average would be a 1.0 Rodriguez 2000 Mariners' season slugging average: .606
On-Base Percentage
Measures how often a batter reaches a base OBP= (H+BB+HBP)/(AB+BB+HBP+SF) H= home run, BB= walks, HBP= times hit by pitch, AB= at bats, SF= sacrifice fly An onbase percentage of 1.0 for a team would mean that every hitter got on base; theoretically a team could then score an infinite number of runs because they would never get an out Onbase is percentage given a higher weight than slugging average for this reason Rodriguez 2000 Mariners' season onbase percentage: .420
On-base Plus Slugging
Weighted addition of onbase and slugging percentages Convential baseball wisdom assigns on base percentage a weight of 1.5 and slugging a weight of 1 Paul DePodesta, Oakland A's statistician, assigns onbase percentage a weight of 3 Rodriguez 2000 Mariners' season statistic according to the Oakland A's weight: 1.866
Runs Created
According to Bill James:
(At Bats + Walks)
Runs Created=(Hits +Walks) x Total Bases/
Used to determine how many runs a team will score Batting average and stolen bases, two traditionally important statistics, not included as factors
AVM Systems
Founded in 1994 by two former derivatives traders Wanted to find the "derivatives" of runs; to value the worth of each tiny event in a baseball game and extract luck Aimed to assign values to the minute components of a baseball player's performance by analyzing the value of these events on average in the past Turned every major league diamond into a mathematical matrix of location points They did not reference any traditional baseball statistics
For example, hits were defined by their velocity and tr...