Baseball Pay and Performance

1
Baseball Pay and Performance

• By
• Mikhail Averbukh
• Scott Brown
• Brian Chase

2
Outline

• Introduction
• Research Objective
• Roles
• Existing Research
• Data Source and Collection methods
• Selection Criteria
• Findings
• Conclusion
• References

3
Intro to Baseball
4
Objectives
5
Roles
6
Research

• Pay, Productivity and Aging in Major League
  Baseball, 2007, Turner, Chad and Hakes, Jahn.
• Average Salary and Contract Length in Major
  League Baseball. Meltzer, Josh.
• Free Agency and Contract Options How Major
  League Baseball Team Value Players. Dinerstein,
  Michael.
• Are baseball players paid too much? Moorehand,
  Timothy.
• Desperate GM can cripple a franchise. Law, Keith.
  2007.

7
Data source and Collection

• Lahman database from baseball1.com
• Used Java and SQL queries
• Access Database to store data
• Data from 2000-2007 for salary and player
  statistics
• Inflation in baseball salaries
• Median salary goes up 100k/year
• Data put into Excel
• Analyzed with Excel and Minitabs

8
Attributes Pitchers
9
Attributes Batters
10
Experience
11
Playing Time
12
Results - Pitchers
Correlation 0.670 R-Squared 0.436
13
Results - Pitchers
Correlation 0.657 R-squared 0.420
14
Results - Batters
Correlation 0.737 R-Squared 0.544
15
Results - Batters
Correlation 0.722 R-Squared 0.521
16
Results Batters top 10
R-Squared 0.243
17
Results Batters bottom 90
R-Squared 0.221
18
Results Players with equal performance
19
Results Salary vs On Base Percentage
Salary ln(OBP/0.3196) 108 The formula is 90
accurate for 17 of players,
80 accurate for 28 of players,
not applicable for 30 of players(OBP lt
0.3196)
20
Results Team budget vs pay

• Teams with higher budgets are able to attract
  better players

21
How Teams choose and pay their players

• Tampa Bay Devil Rays
• Smaller budget so they look for players with
  less experience, but higher statistics where the
  player will be satisfied with their salary.
• Carl Crawford 2002-2006 makes 4.125M
• New York Yankees
• High budget so more players will have a lot of
  experience playing with good teams, higher
  statistics, and be more recognized
• Derek Jeter 1995-2006 makes 21.6M

22
Experience to Salary Correlation based on Team
Budget
23
High Market Teams
24
Lower Market Teams
25
Conclusion
26
Conclusions
27
References

• Pay, Productivity and Aging in Major League
  Baseball, 2007, Turner, Chad and Hakes, Jahn.
• http//mpra.ub.uni-muenchen.de/4326/
• Average Salary and Contract Length in Major
  League Baseball. Meltzer, Josh.
  www.econ.stanford.edu/academics/Honors_Theses/Thes
  es_2005/Meltzer.pdf
• Pay for Play Are Baseball Salaries Based on
  Performance? Watnik, Mitchel. Journal of
  Statistics Education v.6, n.2 (1998)
• Free Agency And Contract OptionsHow Major League
  Baseball Teams Value Players. Dinerstein,
  Michael. http//www-econ.stanford.edu/academics/Ho
  nors_Theses/Theses_2007/Dinerstein2007.pdf
• Are baseball players paid too much? Moorehand,
  Timothy. http//www.helium.com/items/154172-imagin
  e-which-employees-could
• Desperate GM can cripple a franchise. Law, Keith.
  http//insider.espn.go.com/mlb/hotstove06/insider/
  columns/story?columnistlaw_keithid2728948univL
  ogin02stateChanged