OK, all you data geeks and baseball fans . . . “Moneyball“ has been on DVD and Blue Ray for a few weeks. How many times have you watched it in anticipation of April 4? You know, Opening Day for Major League Baseball and the start of a very special season for the Boston Red Sox, who will celebrate the 100th anniversary of Fenway Park on April 20.
And we expect the analytics discussion to have a banner year in the field of baseball, especially in the aftermath of “Moneyball’s” popularity.
Focusing on Opportunities & Outcomes = More Wins
“Moneyball,” the story of the Oakland Athletics General Manager Billy Beane, who pioneered the use of player statistics and analytics to scout players, maximize payroll, and utilize talent that was often overlooked or undervalued, shows the value of an analytics plan in action.
Beane worked with a lean budget (like so many of us in technology and business) that was dwarfed by the budgets of big-market teams such as the New York Yankees and the Red Sox. His story is a helpful reminder that the competitive landscape doesn’t always favor the big players anymore. Star power doesn’t decide who wins the game. There are many more factors to consider.
The companies that are taking advantage of data analytics to identify opportunities and act on them in real-time are very similar to the Oakland A’s, a ball club that wasn’t concerned so much with a player’s batting average but more with establishing a team that could get on base. Getting on base increases a team’s odds of scoring runs. Focusing on opportunities that lie in the data can help your company score a few more runs.
By making use of analytics-backed strategies, Beane was able to maximize player strengths to build a winning team. The A’s were also able to make game-time changes when things weren’t working, such as Beane’s trade of first baseman Carlos Pena to the Detroit Tigers in 2002 – despite the protestations of Art Howe, the A’s coach.
Opening Day – An Outlier?
Many of you may know that April 4 isn’t actually the official Opening Day for Major League Baseball. The previously mentioned A’s and the Seattle Mariners have already played two games – in Japan. While baseball purists are a bit outraged (according to this article from the San Diego Reader) that the first pitch won’t happen in Cincinnati (as tradition has dictated for the past several decades), the owners of these two teams made a “money” decision.
According to the Reader, a media contract with Japanese advertising agency Dentsu promises $475 million over six years (MLB is currently into the third year of the contract), with the owners splitting the revenue. Taking advantage of this opportunity opens doors for the owners to recruit Japanese baseball talent.
It’s Small World, After All
Interestingly, Bill James, the statistician and baseball historian behind the analytics principles used by 10 of the MLB teams and originally by the Oakland Athletics, now works for one of the big-time teams, the Boston Red Sox – the team that once offered Beane the largest general manager contract in history. Beane is still with the A’s, and the Red Sox organization has embraced player analytics as part of its game play. It’s considered one of the keys to their World Series win in 2010.
Making the Business Case for Baseball with Analytics
The topic has become so hot, the Society for American Baseball Research (SABR), Major League Baseball and Bloomberg Sports hosted the first-ever SABR Analytics Conference just two weeks ago. This conference brought together several general managers, statisticians and even graduate and undergraduate students who competed in the SABR Case Competition.
This competition was to determine who could analyze and present the best baseball operations decision. Four students from the University of Chicago’s Booth School of Business won the competition, which centered around a hypothetical situation involving the Washington Nationals.
The students were supplied with details about the first half of the team’s season and the trade options available from other GMs. They were then tasked with making decisions to “buy or sell certain players such as starter Edwin Jackson or Cincinnati Reds second baseman Brandon Phillips, or stand pat and do nothing at the break.”
The winners of the first business-baseball analytics contest will present their case at the SABR annual convention this summer. If you want a full recap of the event, you can find the audio and complete presentations here.
- Tweet us your plans for Opening Day. Will you attend a game or hang out by the grill?
- Sign up for our April 5 complimentary webcast: Make Better Decisions with Predictive Analytics in Spotfire with Lou Bajuk-Yorgan (@LouBajuk), Tibco’s Sr. Director, Product Management.
- Download our complimentary “5-Minute Guide to Business Analytics“ and learn how analytics technologies can help you uncover the most relevant data when you need it.
Spotfire Blogging Team