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OT-Baseball Market Inefficiencies

This off-season of the Hot Stove League has been fairly interesting in that it’s opened up yet another market inefficiency. Just looking at the unsigned free agents when we are about a week away from pitchers & catchers reporting shows some of the following players who are out of work:

Hank Blalock
Russell Branyan
Carlos Delgado
Felipe Lopez
Gary Sheffield
Kevin Gregg
Jermaine Dye
Rocco Baldelli
Nomar Garciaparra
Joe Crede
Garret Anderson
Johnny Damon
Cliff Floyd
Jason Jennings
Pedro Martinez
Noah Lowry
John Smoltz
Mark Mulder
Jason Schmidt
Jarrod Washburn

My guess is that most of those guys will find work at some point in time, but it does bring up an interesting change in how baseball is evaluating talent. Dave Cameron even suggested the new market inefficiency is graybeards!

Market inefficiencies are interesting in baseball because it’s not as athletic a sport as football or basketball is. True, you need athletes to play baseball, but unlike football or basketball or even soccer, you don’t have to have a specific 40-time or bench press max to still be an exceptional ballplayer. Just look at guys like Greg Maddux or Willie Mays if you want examples.

When Moneyball came out the clamor for OBP% became virtually universal eliminating that market inefficiency. The new market inefficiency that is certainly upon us currently is defense as advanced metrics are getting better at identifying defense and how much of an impact it has on games. For the most part sabermetrics has studied offensive statistics to death because they are fairly easy to compute, but there is no getting around the logic that a run prevented is as good as a run scored.

I think speed is going to eventually be a huge market inefficiency as well. It already is to a degree seeing how speed correlates with defensive prowess on a few levels. Everything is cyclical and I wouldn’t be at all surprised to see baseball head back towards the days where the sacrifice bunt and small ball was the norm. It certainly makes sense if defense becomes so good that runs scored will come at a premium. Getting that early 1-0 lead and holding on won’t seem as odd as it sounds today in the ear of home run hitting.

Remember that Earl Weaver was before his time in that he valued 2 walks and the 3-run jimmy jack because in Weaver’s time everyone was playing small ball and the HR was the great equalizer. It still is, but with a shift towards defensive acumen, we may see a slow down in HR hit if only because great defensive players aren’t likely to be huge boppers.

As to a possible market inefficiency in graybeards? I don’t see it unless those same guys start to play for peanuts. Unfortunately for the elder statesmen of baseball, general managers have figured out advanced ways to figure value and oftentimes prospects playing for the league minimum can give just as much value as a graybeard who feels he should be paid based on what he’s done rather on what he will do.

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February 10, 2010 - Posted by | Baseball

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