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NOTE: The following article appeared on the Red Sox mailing list on October 27, 1996 Information on subscribing to the list can be found on the list's web page: http://www.woolner.com/redsox/list
On Fri, 25 Oct 1996 12:32:18 -0400 (EDT), The Solitary Soldier wrote: >Yes, I agree that teams are stronger than others, but the pools of these >teams should change over time. Granted, smaller market teams won't be in >the "competive pool" over long periods of time, but they should be able >to win 3 championships every 100 years, the Twins have won 2 since 87, >and the Expos might have won in 94.[...] but it is now >conceivable that it will take thousands of years for the natural order of >competition to return. Is Keith Woolner still on this list? I'd love to >hear what he thinks about this topic.
Assuming that all teams were of equal strength in the long run, and that each season was independent of the others, then you'd expect that in any given season, each team in an N-team league would have a 1/N chance of winning the championship. Over the long haul, you're expected value of the number of championships won by a given team over N years is one.
However, there are problems with both assumptions that cause problems with the simple case analysis.
First, seasons are not independent of each other. A team that wins 100 games this year is, more than likely, going to have a better than average shot at winning the championship next year. Even if I don't know what's going to happen in 100 years, if you tell me that team X were champs in year 99, they are going to be more likely to win in year 100. As you look over a shorter and shorter time frame, the averages are going to get more and more skewed because certain teams will be systematically stronger for much of that time span. Even in the past 25 years, where you'd expect perhaps 1 repeat champion, we've seen many more than that -- the 72-74 A's (two repeats), the 75-76 Reds, the 77-78 Yankees, and the 92-93 Blue Jays. It looks even worse if you look at repeats for league or division champions, since upsets are much more likely in a short series than over an entire season.
The second problem is the equal strength of teams in the long run. As has been noted, the dominance of the Yankees in the middle of this century can be attributed in large part to their self-reinforcing recruiting strength (the Yankees winning makes it easier to sign talent, which in turns makes them more likely to win), their financial resources (also related to their winning), systematically poor management of other teams (including the Red Sox of the 20's), and the lack of a draft to help ensure competitive balance. Over the last 30 years, many of those advantages have been lessened, though many would still argue that large market teams have an advantage over small market teams because they can afford to sign expensive free agents and "buy a championship".
I happen to feel that baseball teams inhabit their own competitive "ecology", in which teams can play each of many different roles and still be successful. Some teams will rely upon developing their own talent, pouring effort and resources into a farm system, and producing top-quality talent that they can retain for a few years at less than market rates (the Expos). Other teams will prefer to wait for talent to be proven, and then use their resources to acquire it, paying more than if they developed the talent themselves, but without the associated risks of "unproven" players (the Yankees). What's necessary for this to work in the long-run is an environment where both strategies *can* be successful, but are not *guaranteed* to be successful.
The current six-year restriction on free-agency helps teams that develop their own talent retain it as less than market rates. Montreal has let some of its players go as they reached or approached free-agency in favor of younger, cheaper talent. A smart GM can also sign talent that has not fully blossomed to long-term contracts while they are still undervalued -- Cleveland did an excellent job of this with Manny Ramirez and many other of its good young players. On the other side of things, premiere free agents are often at their peak when they first come onto the market (age 27-29), but are seeking a lucrative multi-year contract. A long-term contract would make the signing team pay for that player's declining years, often paying a premium for the priviledge of having retained their services at an earlier age. This is not necessarily a bad decision for the team, depending on their time, risk, and financial preferences. In the later years of the contract, however, this will tie up a spending team's currently available resources in a less than optimal way (e.g. Yankees and Orioles), helping prevent a long-term domination by a rich club.
Of course, a mixed strategy can be the best of all -- as witnessed by the Braves, developing excellent talent in house, along with a few key acquisitions that they are willing to pay market rates for. Other strategies can take advantage of incomplete information in the market -- paying market rates for players who's value is devalued by the buyers (teams). This is what Duquette does extremely well -- recognizing and acquiring talent that is priced below what value they can contribute to a ballclub. He's a "scavenger" to stick with the ecological niche theme.
The optimal strategy for any given team depends on its current composition, its financial resources, the state of its farm system, the quality of decision makers, the long-term financial committments it has already made, and the state of the competition (either in the division or league). More importantly, though, it depends on how the owner and/or GM makes the tradeoff between its two dimensions of value -- winning and money. At some point, the decision-maker has to ask the questions "How much is a win worth?" or "What's the value of a championship?" These can be partially answered using marginal revenues, the financial appreciation in value of the franchise, effect on television contract revenue, and less tangible aspects like the owner's ego, his/her willingness to lose some money on the team, goodwill in the community, personal pride, a burning desire to get that call from the President on national TV, a determination to win the WS before s/he dies, etc. All of these can, and do affect what an owner is willing to pay for a team of a certain quality, and thus affect what decisions his agent (the GM) is willing to make to build the best team possible.
If we could guarantee that the Sox would win the World Series in 1997, but it would take a $250 million payroll, do you think Harrington, et al, would go for it? How about $500 million? At some point, like it or not, it is about more than winning -- the money is a factor. To make rational decision, you have to think about how you're willing to trade off between wins and dollars.
Revenue sharing, incidentally, helps level the field in one respect, in that the owners will be a little closer to each other in baseball-derived resources to fund a team with. It does not, however, address individual owners tradeoff rates between wins and dollars, or any other of the other issues involved in what a player is worth to an owner.
Back to the issue about teams dominating: A key question as to whether this (or any other) arrangement is broken or not comes in how you answer two conflicting questions, plus one other:
1) How long should a team have to rebuild to be successful, assuming good decision-making, and average luck?
versus
2) How easy should it be for a successful team to retain the core of its talent, and for how many years?
and in general
3) How much success is enough to keep a team viable, and how much dominance hurts the marketability of the entire sport?
Note that these are goals not of an individual team, but of the sport as a whole. You have to assume that teams will make individual decision in what they perceive as their own best interest. These questions concern the competitive environment in which they make those decisions, to ensure the long-term viability of the baseball product as a whole, rather than that of a single franchise. As such, these are issues that the owners as a group need to address, perhaps with a commissioner or other governing body that oversees the game.
The first two goals contradict each other to a certain degree -- a team that wants to be successful for many years (a "dynasty") means that its difficult for a bad team to emerge as a top contender quickly (a "rebuilder"). Should it be darn-near impossible to repeat as champion? If so, you should design a system in which a successful team has trouble retaining or acquiring talent at its peak. Should the Expos have been able to hold onto their core of talent for a few years? How can you incent them to do so without risk creating dynasties?
Would a repeat of a 1950/Yankees era of domination hurt baseball's viability in every other market than the lucky one? Will a team's fan base stick with a team through a few lean years to see it rebuild, or are they so fickle that anything fielding anything less than a competitive team every season would drive it to financial ruin?
These aren't easy questions to answer -- and I'm not sure that the current powers-that-be are well equipped to answer them. They may not even be all that inclined to try to solve them. I'm not sure I've done much to illuminate them, other than simply to have stated some of the problems involved, but I haven't got any great solutions to offer.
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Copyright 1997-2001 by Keith Woolner. All included authors retain the copyrights to their original works.