“So much for Moneyball”

Andy Carroll’s £35 million move has surprised a lot of people, particularly in the light of the Liverpool owners’ reputations as careful, smarter investors.   NESV, as you’ll know, famously took over baseball’s Boston Red Sox and won a long awaited World Series, and in so doing used what were termed “moneyball” principles.

People were unsure what that might mean in a footballing context, and they certainly didn’t expect *this*.  I’m not really surprised.

A (fairly) quick overview of Moneyball:  this was a book written by a gifted writer called Michael Lewis.   Lewis had extraordinary access to the Oakland Athletics baseball club, run by a man named Billy Beane.  Despite not spending much money relative to his peers, Beane was able to consistently win lots of games.   How?  Among other things, sabermetrics.

Sabermetrics is a term invented by Bill James, a compiler of statistics and another good writer.  Saber comes from the acronym SABR, the Society of American Baseball Research.  Metrics is measurement.  Sabermetrics.   James and others counted a lot of things in the 70s (baseball is a series of countable actions:  pitch, hit, run, pitch, swing, miss, etc).  James et al *proved* a number of things about the game that were not then accepted within the game.  Proved them, beyond any doubt.

But the ideas didn’t catch on.  Baseball insiders complained that these stat geeks hadn’t played the game, and should spend more time at the ballpark rather than sitting in their mothers’ basements (this still comes up as a put-down, even now).  So these ideas, which could have transformed the way teams ran themselves, didn’t take.

James had a hard-core underground following though, and self-published four annuals of his writing.  He got a book deal and from 1982 to 1988 published his work each off-season.   It remains fantastic stuff, combining hard analysis with a very readable style.

His readership grew and in time some of these readers acquired positions of responsibility within baseball.  One of these men was Sandy Alderson, who ended up running the Oakland A’s. In time he hired Billy Beane, and suggested Beane read James’ work.

Something clicked in Beane’s mind:  of course!  Beane’s revelation was so strong because he himself had been exactly the kind of player that teams overvalued:  tall, athletic, handsome (some baseball scouts looked for ‘the good face’ which they thought showed character, resourcefulness, etc), super-fast.  Scouts would see Beane in action and drool.   Never mind that he couldn’t really hit a baseball.

Beane realised that actual production on the field was everything, and with James’ analyses, found better ways to measure this production.   In the old days players would be valued by their speed, by their batting average (how often they hit the ball safely) and something called RBI (how often they hit the ball and a teammate scored), but these things didn’t tell us enough about a player:  sure they helped, and the good players would have good scores in these measures, but so too would some bad players.  What’s more, a lot of good players would not score well on these measures.  They might be slow, or miss the ball too often (but when they did hit it, they hit it a long way).   These players would be undervalued by baseball’s decision makers who were conditioned into an old school mindset.

So Beane sought out players who didn’t look like athletes and who were productive in ways that the mainstream didn’t value highly enough.   By doing this he could put together an effective team on the cheap.   This is a gross oversimplification, of course, but the point holds and the method worked:  Oakland won a lot of games.

Michael Lewis went to find out more, and wrote a book outlining a lot of these methods, profiling a number of Beane’s players and telling a really engaging story.   He called the book Moneyball, and a phenomenon was born.   Old school baseball types rejected the book, and one prominent commentator (Joe Morgan, effectively (and frighteningly similar to) Alan Shearer) even denounced Billy Beane for writing such a book bragging about his accomplishments!  (of course Beane had done no such thing, and didn’t even know what Lewis was writing.)

John Henry, a wealthy man through his work in the financial markets, was also (I believe) aware of Bill James.  The financial markets are a bit like baseball in their search for undervalued assets, so James, Beane and the Moneyball phenomenon resonated with him.   And if Beane could be so successful without spending much, what might be achieved with the appropriate financial backing?   Henry and his team bought the Red Sox and went about finding out.

They hired a 28 year old to run the side, Theo Epstein.  Epstein knew Bill James’ work inside out, but hired James as a consultant anyway.  He spent money, lots of it, and after 100 years of winning nothing, the Red Sox soon won the World Series.  Moneyball vindicated!

Kind of.  The Red Sox took things to a new level.  A quick look at their roster of players shows that they used some Moneyball techniques:  First baseman Kevin Millar wasn’t wanted in Major League Baseball and was just about to sign on in Japan before the Red Sox intervened; Mark Bellhorn was a scrappy player who had his ups and downs, but who certainly wasn’t considered championship calibre before joining Boston.  But he did all the important things that people don’t notice well.  David Ortiz, who walloped a lot of big hits (literally and figuratively) for the Red Sox, had been let go by the Minnesota Twins.  He could barely run, but could hit a baseball miles.  Bill Mueller, the third baseman, was like a Bellhorn but better.  Manny Ramirez, their eccentric outfielder, was mightily productive but hard to control.  The Sox kept faith, happy to let his work on the field do the talking. The pitchers were good in anyone’s eyes, but it’s worth noting that the ‘missing piece of the jigsaw’ was Curt Schilling, a player for whom the Sox had to pay a lot to acquire.

Moneyball?  I think you’d define it as making decisions for a reason.  They bought in a number of good, undervalued players, but realised that this alone isn’t enough to win things, so supplemented these core parts with superstar talents like Curt Schilling, players who were among the best paid in the league.

Let’s bring this back to Liverpool.  One of the issues NESV had with the current squad, and also Roy Hodgson’s signings, is that the players are all relatively old.   Older players can be over-valued:  they have built up big contracts but are probably past their peak; they are trading on their fame now, not necessarily on the ability that earned this fame in the first place.  So there’ll be a big emphasis on young talent, talent coming into its peak and which might then be usefully sold on in due course.   (The Torres deal is terrific for them, too: a player who was briefly great, but has since only been good, but who still commands the fee of a great player.  Torres = Carroll + Suarez?  Yep.   Torres might very well become great again, Carroll might never become great at all, but the equation does balance and under the circumstances (Torres wanting to leave for one) it feels like a good move).

Andy Carroll makes sense for Liverpool on a few of levels.  One: he’s young.  In five years he’ll be in his prime (or perhaps past his prime, but near enough that someone will still want him) and can then be sold on for good money again.  If transfer fees exceed inflation (as surely they will, especially if there’s an economic recovery) then there’s a fair chance that a good amount of that £35million can be recouped.   Especially because two:  he should age well.  He hasn’t played a lot of games for his age, and his skillset is one that ought to hold up.  Three: he’s unique.  Seriously, Carroll has an ability that not many others have.  He’s phenomenal in the air, has a decent touch, and appears to have the instincts to make the most of his skills.  He’s what Peter Crouch should have been.   Four:  (ack) he’ll enhance the brand.  He’s John Charles, John Toshack, a most English of English centre-forwards (and yes, I’ve just picked two Welsh players…).   Liverpool fans are nothing if not backward looking: they’ll love their all action number 9.  He’ll make the club a fortune in shirt sales around the world.

So there are reasons to spend big on Carroll.  No, he’s not undervalued at all; but he’s not without value, and as a signing (especially given the context of receiving so much for Torres) he makes sense.   Liverpool’s owners will have done the analysis and will know that success costs money.  The more you spend the better you get.   From there it will have been a question of working out how to spend that money.   You can buy seven five million players for £35 million, but then you end up no better off;  you can buy three ten million players and maybe that does make a difference;  but if you think you have found premium talent, talent that is not available from any other source, you have to pay up.   With Carroll and Suarez Liverpool have paid up; they’ll know what they’re doing here, and just as Chelsea and City had to spend away to kick start their ascendency, so too are John Henry’s team.   He needs defenders now and a few more £10 million types dotted around the pitch to make this really pay off, but the recovery is on.   It’s not Moneyball in the “undervalued player” sense, but it’s Moneyball in the “we know what we’re doing” sense.

UPDATE: a couple of updates made to reflect some comments on other sites about the piece:  Qualified “Torres was great; now good” comment; I do know that Toshack and Charles weren’t English, but hopefully the point stands; finally, I’m not American!  (not that there’s anything wrong with that… and my esteemed co-author here is American, and all the better for it.  Stops digging hole)

23 thoughts on ““So much for Moneyball”

  1. TonyGilroy

    We won’t know the precise figures but for me spending £35M on Carroll is crazy.

    On the other hand swapping Torres for Carroll and Suares with a top up of £6M or so seems like good business.

    The big “if” with Carroll of course is the extent to which his personality interferes with or even wrecks his career. Liverpool are gambling that he’s a kid who’ll grow up.

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      1. Josh

        I agree with this; I thought the amount of money Chelsea splashed out on Torres was pretty ridiculous. I guess the thing is, Drogba and Anelka aren’t that young anymore, and Kalou isn’t really a pure striker, so if they think Sturridge and Kakuta and Borini aren’t ready yet (as presumably is the case), Torres is a guy in his prime who can bang in goals if the two older guys go off a cliff in the next year or two. £50M pounds worth of goals? I don’t know about that. Suarez seems a much better value for a similar type of player.

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  2. Alex L

    The only thing about this whole affair is that for both clubs, the timing just seems wrong.

    Chelsea – Do they need Torres now? I guess they think the Champions league is still in reach but could they not have waited until the summer? Torres would have been more around the £35m mark then anyway, especially if he was agitating for a move.

    Liverpool – again, what value does Carroll bring to them immediately? They will finish mid-table, probably in the Europa league spots (they would have finished there anyway) and could have saved the money and gone for Carroll in the summer when again, the price would have been lower, I am thinking more like £20m.

    Both clubs needed these players, but did they need them right now?

    p.s. On a completely unrelated note Charlie Adam just inadvertantly saved his career by not joining spurs. Which position would he fill in their already stacked midfield? I guess we could have picked him up in a few years a la Danny Murphy!

    Reply
    1. rich Post author

      Good point: I think it’s telling that blackpool bought Andy Reid. Charlie Adam looks like a half decent player, but that team is all about attack and everything goes through him. In any normal team I’m not sure he’s any better than Reid, who has been a Championship/Premier League tweener for a long time.

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      1. Alex L

        I would go as far as to say that if Blackpool get £8m+ for Adam and now have Andy Reid, that is fantastic business.

        If we did not have Duff and Davies, Reid would be a good addition for us.

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        1. rich Post author

          Yep. Reid would be a traditional moneyball player, incidentally. Doesn’t look like a footballer but probably creates goals at a decent enough rate to be a premiership player (he says without checking on Reid’s productivity).

          Reply
  3. b+w geezer

    The overall situation is what counts, as in the original post and Tony’s second para. The potential resale within English football, in which English talent will always remain overvalued, means that any long-term risk involved is on a far lesser scale than the club that is making it. Meanwhile the fans have two stars to whet their appetite instead of one. Liverpool’s owners are fortunate that Carroll was available to fit those circumstances, because who else in the domestic game would have done so other than those near the end of careers? That alone was worth a premium.

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  5. McBride of Frankenstein

    Excellent post. I think a lot of people have only a vague understanding of Moneyball tactics, and it never means simply not spending. The comment on top nails it too, I think: who wouldn’t trade out Torres for Suarez and Carroll? The Red Sox are consistently a top spender in baseball, and in most recent years only the Yankees outspend them.

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  6. Another David

    As a Liverpool fan with an affinity for the Boston Red Sox and Michael Lewis, I congratulate you heartily on this post. Moneyball as per the Oakland As was only ever about surviving as a bottom feeder. The ‘application of Moneyball principles’ to the Boston Red Sox was largely lip service to the buzzword, based on spending more, given their greater resources, but still getting value for it.

    Newcastle have got their upside with £35m for Carroll. Chelsea have got a player with no upside, but a pretty neatly defined worth. Liverpool have got two players with big downsides and big upsides. This is the game.

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  7. mk11

    Agreed, Carroll is worth the fee, in the context of the Torres sale, because there were no other credible alternatives within the English game and no time to look abroad for better value. It’s a punt, but a good, measured one, as at least he arguably has the potential to be worth a similar sum, or even more, in 4-5 years.

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  8. Ecuared

    Great read, thanks for that.

    The price for Carroll is of course inflated. But then of the teams in the top four now who hasn’t overpaid to get important players?

    Arsenal are the only ones but then they’ve never had to get themselves out of a hole like Liverpool is in now. And, of course, they haven’t won anything for ages, when a big signing or two might just push them over the edge. I doubt any of their fans would argue if they took Pepe Reina off our hands for 35 million, inflated or not.

    The success of this deal balances on whether or not Carroll can behave off the field. Even if he is just a very good player for us, and not a sensation, his price will be justifiable as a necessary evil to keep our club on the ascendancy at this critical moment in our history.

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  9. timmyg

    Let me echo McBride of Frankenstein Another Dave and thank you Rich for not saying Moneyball=Frugality. It never has and never will. Oakland didn’t have any money, so they adapted the system to their market strength to make it work.

    And Dave, as you say, the Sox really just paid lip service to Moneyball. They had the second highest payroll for years. Unlike the Yankees that were more like Chelsea (spending ridiculous sums of money on big stars: lest we forget, Chelsea spent just 5million pounds less on Shevshenko than Liverpool did on Carroll!), the Sox spent lots of money on players that had high OPS, RISP, or VORP; not on pitchers that may have won 15 games — a completely useless stat that is out of the pitchers hands — or have a low ERA, or on batters that have loads of hits.

    Oh, and Alan Shearer may be a complete moron, but his is no Joe Morgan.

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    1. Colin_K

      I think more than anything, Moneyball sought to show that things cannot be right or wrong when it comes to scouting…some prefer seeing a player do his thing with their own two eyes, where others find it important to look at the data that has been compiled for a particular player over a period of time.

      The Red Sox still do this to a degree, having the likes of Kevin Youkilis on the team. But I think the principle of looking where othersmay not has been copied but just about every team in the league. The Phillies (my team incidentally!) were very successful in finding Shane Victorino and Jayson Werth in that fashion, who were both instrumental in them winning the ’08 World Series. Vic was castoff and let go in similar fashion to David Ortiz via the Rule 5 draft twice (which is something that happens when a player reaches 5 years after being drafted, and it is up to the team that they are property of whether or not to protect them or let the other teams have the opportunity to acquire their services). All that needs to be paid to acquire such a player is $50,000! And Werth was an injury reclamation project that actually turned out quite well for the team and player. He just signed a $125M contract with another team this offseason.

      I would go so far to say that this tactic is in play by every non big 4+ Spurs and ‘Pool side. I think of the way Murphy or Pantsil or Etuhu or even most recently Sidwell was acquired. Let the big money teams sign these guys to the big deals, then when they become surplus because some team has dropped a load snapping up the new prospect of the hour, that is the time to sign them up to your favorite mid-table squad.

      Reply
  10. John Craven

    I definitely wouldn’t call this Moneyball, although I don’t think that Theo Epstein was in the position to have to play Moneyball either. The A’s are a very small market team – think Fulham, actually, even down to the bit about having to share the market with another more popular team in their backyard (the San Francisco Giants are to the A’s what Chelsea is to the Cottagers) who *had* to make those low-cost, smart moves to stay competitive. The Red Sox definitely built on Moneyball but it’s not really so much Moneyball as it is staying sabermetrically smart while spending a lot of dough.

    These moves strike me as high-risk, high-reward, which is kind of the antithesis of Moneyball. The A’s were/are in a situation where they flat-out could not take financial risks, so instead they did things like sign a career backup catcher with a great eye and taught him to play first base (not really high risk in that if Scott Hatteberg had failed to learn the position, they were in the same position they were in already before they signed him), draft players who didn’t have the “baseball face” and who even had, perhaps, the “Barcalounger gut” (my favorite line from the book: “We’re not selling jeans here”) in relative later rounds, so when Jeremy Brown really didn’t end up panning out it wasn’t really a big loss, and trading off their closers – the most overrated position in baseball – as soon as they started to command more money (because Beane knew that all he had to do to “find” another closer was to promote another decent middle reliever into the slot).

    I thought Fulham actually might have been doing the footie equivalent of Moneyball, and I don’t know, perhaps they still are. I think it ought to be more stat-specific than traditional, though – the whole point of Moneyball is that the combined wisdom of baseball scouting, built up over 130 years, had some major flaws that could be exploited – and I haven’t seen any evidence that Mark Hughes (or Roy Hodgson for that matter) care or even know about those Football Manager-y stats that are available (or the analytical work that you all do, for that matter). Still, if any sport still has room left for an economically minded, unsympathetic guy to swoop in and turn an also-ran into a contender by exploiting value gaps, it’s football.

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  11. Wally

    While it’s correct to say that Moneyball is not simply frugality, it is a little more than simply surviving as a bottom feeder. Under Beane’s stewardship, the A’s did more than just survive, while playing in a wreck of a stadium and in an already crowded sports market. While their playoff success was minimal (1 post season series win, I think), they made money and remained very competitive. Not everyone can be the Yankees or even the Red Sox. Real fans hate to hear it and while everyone, owners included, wants more, sometimes profitable and competitive has to be enough, especially when more than half of the league is neither of those. Who fits that mold in the Premier League? Maybe Arsenal (with the exception of the stadium), although I’m not suggesting that anyone associated with that club is happy with their lack of silverware lately. However, they are almost certainly happy with the bottom line.

    Beane himself is a Spurs supporter and is said to have approached them, as well as the San Jose Earthquakes of the MLS, about crafting a similar ‘metric’ for measuring footballers.

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  12. McBride of Frankenstein

    I’d read in recent years that Beane had become obsessed with soccer, to the point where he apparently is known to neglect baseball for it.

    As an American Fulham fan (pre-Yank acquiring days!), and a Baseball Prospectus subscribing stat-head (Wins? Closer? Pssshaw!!), nice to see so many informed opinions on this board. I’d say it reflects very well on this site! I visit because of the fine analysis but didn’t know there was so much knowledge here about baseball.

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  13. Colin_K

    McB of F…I think you’d be surprised how many readers/commenters here are from the States. Count me as one of them!

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  14. Nick

    As a Liverpool supporter it’s an unusual treat to come across such excellent calm analysis of the club from outside of the blogs and twitterings of people like Paul Tomkins. In the particular case of Andy Carroll, though there was obviously an element of hard-nosed calculation, at least at an instinctive level, I think it was equally important for the club to make a dramatic statement of intent. We’ve taken a battering as a club over the last couple of years that goes way beyond games won and lost and league positions. Self belief is crucial. It’s hard to convey the scale of the mood change that took place when Kenny walked back in and I think he understood that it was absolutely essential to react positively to Fernando’s departure. Andy Carroll is a gamble, but one we had to make and one that could bring big rewards.

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  15. Another David

    Wally, apologies, I should have said ‘thriving’ rather than ‘surviving’. I think, as mentioned above, Fulham are as good an example of this as you’re going to get in the Premier League, though Bolton under Coyle, West Brom and maybe even Blackpool are showing some signs of it.

    I’ve said for a while that Fulham is a team full of players I’ve always liked, but never enough to want to play for my team – Schwarzer, Konchesky (!), Hangeland, Murphy, Bullard, Dempsey, Gera, Etuhu, Duff, etc.

    Reply

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