Economics of Winning in Baseball
By Mike Silva ~ November 18th, 2008. Filed under: Business of Sports.
Lane Meyer of Nomaas does a great interview with Vince Gennaro, author of the book Diamond Dollars: The Economics of Winning in Baseball.
In the piece Lane talks about the true value of CC Sabathia, Gennaro’s thoughts on the Nick Swisher trade, and what is the value of Robinson Cano. The interesting part of this interview is how it gives you insight into the business side of the game.
Often fans are so passionate about their team that they forget the fiduciary responsibilities GM’s have to the parent club. Regardless of what kind of “deep pockets” an ownership group has, the team needs to be evaluated as a business unit. There is a limit to how much money one can justify putting into the baseball team. Remember no business unit, even a baseball team, has an infinite return. That is why the type of analysis that Gennaro does is going to be more prevalent in today’s game. If you own a small market club it’s almost imperative.
The best example of this analysis is when he discusses Robinson Cano. Although Cano has annoyed fans with his indifferent play, as a commodity it is the worst time to trade him. You would be selling low in a “Cano market” and very likely would not get equal value. More to Gennaro’s point Cano would have commanded more on the open market after the 07′ season, therefore the deal the Yankees gave him could still be considered below market or a bargain.
Like it or not finances are going to be a bigger part of the game going foward. Teams that master payroll will have increased flexibility that ultimately will sustain winning. Kudos to Lane for finding a great guest and delving into a thought provoking topic.
Oh, and I won’t spoil the surprise, but the description of Ben Sheet as “the girl that is attractive, but getting into a relationship is a bad idea” is spot on.
