Baseball's Most Overpaid Players - Forbes at Yahoo!

I've been making a big effort to stay positive lately, but sometimes it's worth discussing something that's poorly done so that others can do it better. This article by Forbes is an example of baseball analysis that really misses the boat.

The main flaw is that the author compares the salary of each player to the other players at the same position. So if a position is full of overpaid players, nobody will rate as overpaid because they don't earn more than the rest. (Cough cough first base.)

Derek Jeter is cited as an example of an overpaid player, not because his performance isn't worth the money, but because the next highest AL shortstop (evidently we're limited to players in the same league now) earns $4M this year. Uh, isn't that really just a good argument that Orlando Cabrera is underpaid?

The author then argues that the most overpaid players aren't the mediocre guys getting big bucks or the "fading veterans finishing out big contracts". Instead, it's somehow the stars who are the most overpaid. Um, no. A good analysis of overpaid players would compare what each player should earn to what they actually do. And the stars are so much better than the mediocre players that they deserve the huge bucks. Carlos Beltran somehow gets a bad rap in the article when one Beltran is worth 3-4 league average players and earn only about twice as much. And why are we giving aging veterans a pass? I don't even understand the argument behind that one.

Switching gears to the methodology, players were rated by averaging batting average, home runs, runs batted in, and OPS (which the author notes is "now a major metric of production".) By including OPS, the other three metrics are overkill, and last I checked, defense matters. When you argue that Brian Roberts at $8M is one of the worst deals in baseball, you've done something seriously wrong.

Uh, hey, you guys at Forbes, I don't know much about finance, but if your advice in that department is anywhere near as shoddy as your baseball analysis, you've lost me as a potential customer.

4 months ago Sky Kalkman 25 comments 0 recs |

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Comments

The non-linearity thing

Is what really kills me. Why would you assume that twice as much production is only worth twice the price? It seems pretty obvious that a player who hit 80 home runs would be worth more than twice what a player who hit 40 home runs would be worth.

But leaving out defense altogether is just sloppy.

by Tommy Bennett on Jul 12, 2009 1:39 PM EDT reply actions 0 recs

Well, I'd argue that pay:performance IS linear, if you go by WAR.

But this article seems to be arguing that each extra WAR is LESS valuable than the previous one.

And, actually, I may get your point now: If 10 home runs is “replacement level”, then the better player in your example leads in home runs over replacement 70 to 30, which is 2.3 times more valuable.

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by Sky Kalkman on Jul 12, 2009 1:54 PM EDT up reply actions 0 recs

Right. If he were using WAR

it would absolutely be linear. But he’s using OPS and HR and RBI and all that.

by Tommy Bennett on Jul 12, 2009 1:56 PM EDT up reply actions 0 recs

He needs to incorporate everything

With Leadership alone, Jeter is worth 8 million

No one goes there anymore, it's too crowded. - Yogi Berra

by trademan56 on Jul 12, 2009 2:04 PM EDT up reply actions 0 recs

at the very least

I Have Spoken.

by The_Fan on Jul 12, 2009 3:07 PM EDT up reply actions 0 recs

WAR is actually pretty linear nowadays

When I looked at Pennants Added, I found that a 10 WAR player has basically the same value as two 5 WAR players. David Gassko did the same study a while back and found that the value of a win in fact decreases at the highest levels, although I think my methodology was a little more solid. Still the point is that it doesn’t appear that the pay scale should be exponential.

Derosa.

by vivaelpujols on Jul 12, 2009 4:17 PM EDT up reply actions 0 recs

While I'm never one to disbelieve anything Dave Gassko does...

He didn’t account for the fact that on better teams, a high WAR player is more likely to push a decent player to the bench. For example, on the Yankees, one of Melky/Gardner would play full time if the other wasn’t around. Or if Tex was gone, Swisher would be at 1B with Melky/Gardner both playing. Crappy teams can move people around to push a worse player off the field.

Gassko doesn’t think that effect is significant, but I’d like to see it addressed to really convince me.

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by Sky Kalkman on Jul 12, 2009 4:33 PM EDT up reply actions 0 recs

Yes I agree with that

I would like to re-run the study (again), but instead of using value over replacement level, I would use value over average player on that team. So a player going to a 90 win team wouldn’t be replacing a replacement level player, he would be replacing a 1.7 WAR player (90-48 / 25) . How does that sound to you?

Derosa.

by vivaelpujols on Jul 12, 2009 4:37 PM EDT up reply actions 0 recs

That's pretty interesting.

A 70 win team would have 22 WAR or about .9 per player.

Actually, the starting lineup has more like 15 players (8/9 position players, 5 starters, and 1.5 significant relievers.)

My guess is that you don’t want the average player, but more like the median player. Or a bit worse, like the 25th percentile player.

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by Sky Kalkman on Jul 12, 2009 4:50 PM EDT up reply actions 0 recs

Good Shot

Like tbsmkdn said, he needs to use defense too

No one goes there anymore, it's too crowded. - Yogi Berra

by trademan56 on Jul 12, 2009 2:05 PM EDT reply actions 0 recs

Unrelated -- should I feel the need to include the ! after Yahoo(!)?

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by Sky Kalkman on Jul 12, 2009 2:08 PM EDT reply actions 0 recs

What's the trademarked name?

Use it.

OverTheMonster - ALLERGEN WARNING: May contain peanut butter.

by bs.uf15bosox9bears23 on Jul 12, 2009 4:37 PM EDT up reply actions 0 recs

Then I'm changing "Beyond the Box Score" to that symbol Prince used for a while.

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by Sky Kalkman on Jul 12, 2009 4:48 PM EDT up reply actions 1 recs

O(+> ?

OverTheMonster - ALLERGEN WARNING: May contain peanut butter.

by bs.uf15bosox9bears23 on Jul 12, 2009 9:29 PM EDT up reply actions 1 recs

Awesome.

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by Sky Kalkman on Jul 12, 2009 9:34 PM EDT up reply actions 0 recs

If only he didn't choose to make the curve thing next to the circle curve away from it.

Of OJ+> would work better.

OverTheMonster - ALLERGEN WARNING: May contain peanut butter.

by bs.uf15bosox9bears23 on Jul 13, 2009 2:59 PM EDT up reply actions 0 recs

I feel the need to point out that Orlando Cabrera is absolutely overpaid at $4 million a year

Linda's in the cold ground, won't see her anymore
Somewhere out on the highway tonight, the drunken engines roar
It's just one of those things, one of those things
-- Al Stewart, "Accident on 3rd St."
In memory of Nick Adenhart and all victims of drunk driving

by PaulThomas on Jul 12, 2009 2:35 PM EDT reply actions 0 recs