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Ross Ohlendorf : Sabermetrician

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Ross Ohlendorf is a smart guy. First of all, he went to Princeton. Secondly, his major was in Operations Research and Financial Engineering. So what did he do his college thesis on? The draft. Be still, my heart. Here's a snippet -- The 126-page thesis is brilliantly written and so complex, only a mathematician would be able to completely comprehend its meaning. So Ohlendorf broke down his thesis in layman's terms. For each player, he estimated how much less the team paid the player in each of his pre-free agency years than it would have paid a comparable free agent. He gathered salary data for both the players in the study and for all free agents for the relevant years. He used Win Shares (a statistical formula used by Bill James) to determine each player's value. "Many of the players in the study did not make the major leagues,'' Ohlendorf said. "However, many of those who did produced tremendous returns for the teams who drafted them. When looked at as a group, the internal rate of return on all the draft picks in the study was 60 percent. This is an extremely high rate of return. It is saying that if you invest $1, it will grow to $1.60 after a year and $2.56 after two years, and so on … I believe the stock market has had a historical rate of about seven or eight percent, prior to the last year. So even though many of the investments did not work out, the upside on those that did was so great, signing the high picks to large bonuses appears to have been a very smart investment.'' Ross, if you are out there, we'd love to have you as a guest writer at BtB!

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