Russ Roberts

Michael Lewis on the Hidden Economics of Baseball and Football

EconTalk Episode with Michael Lewis
Hosted by Russ Roberts
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Michael Lewis talks about the economics of sports--the financial and decision-making side of baseball and football--using the insights from his bestselling books on baseball and football: Moneyball and The Blind Side. Along the way he discusses the implications of Moneyball for the movie business and other industries, the peculiar ways that Moneyball influenced the strategies of baseball teams, the corruption of college football, and the challenge and tragedy of kids who live on the streets with little education or prospects for success.

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Readings and Links related to this podcast

Podcast Readings
HIDE READINGS
  • Moneyball: The Art of Winning an Unfair Game, by Michael Lewis
  • The Blind Side: Evolution of a Game, by Michael Lewis
  • "An Economic Evaluation of the Moneyball Hypothesis", by Sauer and Hakes. Free online preprint. Published in the Journal of Economic Perspectives, August 2006.
  • Sportometrics, by Robert D. Tollison. Concise Encyclopedia of Economics.
  • Sports, by Gerald W. Scully. Concise Encyclopedia of Economics.
  • The Economics of Moneyball, podcast with Skip Sauer.
  • Highlights

    Time
    Podcast Highlights
    HIDE HIGHLIGHTS
    0:49Baseball. Billy Beane, the Oakland A's. "If I can't measure it, I can't invest in it." Used statistical analysis to find ways to evaluate players to try to put together a better baseball team. Why did Beane trust that approach? Scouts? Cash?
    6:07Ability to get on base: on-base percentage and walks. Was on-base %-age overvalued? Is it still? Five years ago, exploiting an arbitrage opportunity meant looking for players with ordinary batting averages but unusually high on-base %-ages. What about now? Defense vs. offense; fielding percentage.
    12:50JEP article: In late 1990s, Beane was correct, but already that market imperfection has been corrected through competition. Why did Beane give Lewis this trade secret? Baseball traditionalists vs. team owners. Sports books.
    20:50Relationship between General Manager and Coach. Have Beane, Epstein, statistical analysis changed that relationship in particular baseball teams? Role of General Manager in baseball vs. in football. Catch Me If You Can, the National League. Weakness does occur when you change the roles. Red Sox.
    27:08Is baseball less efficient because there is no entry? Does that enable mediocre strategies to persist? Industry perspectives: Examples of university hiring, football and 2-point conversion, G-rated movies vs. R-rated movies. What is the size of the edge? Media's response to first to try new strategy.
    36:55Football, The Blind Side. The unseen--what is measured, what is paid. The left tackle, offensive line highly paid but off-camera! How do players get valued? Michael Oher example, Memphis, social class change. Asymmetry of left vs. right tackle: right-handedness, passing game, quarterbacks, running backs. What if quarterback is left-handed?
    48:58Is the family that took in Michael Oher really that altruistic? The mother, Leigh Anne Tuohy, saw special urgency, plus coincidences, plus religious background all came together. Changed sports valuations may also have made it more feasible.
    1:00:29National Collegiate Athletic Association (NCAA) and the Tuohys: Did the Tuohys violate NCAA regulations by taking Oher in, thus influencing his college choice and opportunities? Scholarships, jobs, adoption, college acceptances, perks like weight rooms, how student athletes are supported: Do players' funding opportunities threaten the NCAA's romantic fiction that everyone starts college as an equal? Chilean soccer league example: even name matters.
    1:11:05New England Patriots have let glorious players go as overvalued but continue to win. Is Bill Belichick a genius or is it something else? Front office and coaching. Who's going to win the SuperBowl?

    Comments and Sharing



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    COMMENTS (5 to date)
    John writes:

    Does any one know if Beane's discoveries have significantly altered the coaching of baseball skills at minor league, college or high school level?

    Baseball Ticket writes:

    I'm very impressed with Michael's conclusions. Interesting take on the situation. I'm curious; what does the conclusions about the economics of poverty mean for smaller venues?

    Matt writes:

    Just wanted to point out that the blog The Sports Law Professor thinks that Left Tackles are over paid and quarterbacks are under valued and he says why.

    http://thesportslawprofessor.blogspot.com/2007/02/nfl-quarterbacks-are-underpaid-and-left.html

    [URL corrected--Econlib Ed.]

    pdbailey writes:

    Russ used and odd points in this 'cast. The assumption is that the owners are profit maximizing and have complete information. This is the same as assuming that there is no such thing as technological advancement--if you have complete information then you would realize all technologies instantly. Oakland had a technology improvement, it's undeniable, look at the stories of pitchers where there is no argument that a lower ERA isn't more exciting than a a higher ERA.

    Salaam Yitbarek writes:

    I hope you don't mind that I comment on your Michael Lewis interview here - I've only just listened to it, I feel compelled to comment, but comments are disabled there.

    You talked about negative reactions to Moneyball from certain members of the baseball community often because of its implications on their livelihood. I think there's another reason to dislike this rationalization or optimization of the game, and that is aesthetics.

    For me, sport is first and foremost an art. For the most part, it is the imperfections in the game that make the art attractive. I don't know if baseball would be as enjoyable if, for example, all field managerial decisions were made by a computer. Or if baseball athletes were all seven foot tall, 300lbs, and ran a four second forty.

    Undoubtedly, some would enjoy the art of 'manager software', and others would enjoy the video-game feel of bionic athletes playing baseball. But it would be a changed art form, one that perhaps many current fans would no longer be interested in.

    [Note: This comment has been moved here from a different thread, and comments reopened temporarily. We'll keep them open unless they attract spam.--Econlib Ed.]

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