Money Ball

I just finished reading “Money Ball”. I watched the movie some time ago. It is not the same.

You will have to read the entire book, but in a nut she’ll, the traditional baseball stats are meaningless, (kinda like GAP accounting) and the clubs are in fact run like clubs, not businesses.

In a way Saul’s secret sauce is to find business managers who are tracking the correct numbers and partner with them via equity ownership.

I wanted to write these down somewhere and I thought this board would appreciate it more than others I hang out on.

Start Quote

Chapter Nine Trading Desk “Money Ball”

Having kept the team close enough to hope, Billy could now go out and shop for whatever else he needed to get to the play-offs. When he set off on this shopping spree, he kept in mind five simple rules:

  1. “No matter how successful you are, change is always good. There can never be a status quo. When you have no money you can’t afford long term solutions, only short-term ones. You have to always be upgrading . Otherwise you’re f@#$ed.”

  2. “The day you say you have to do something, you’re screwed. Because you are going to make a bad deal. You can always recover from the player you didn’t sign. You may never recover from the player you signed at the wrong price.”

  3. “Know exactly what every player in baseball is worth to you. You can put a dollar figure on it.”

  4. “Know exactly who you want and go after him.” (Never mind who they say they want to trade.)

  5. “Every deal you do will be publicly scrutinized by subjective opinion. If I’m[IBM CEO] Lou Gerstner, I’m now worried that every personnel decision I make is going to wind up on the front page of the business section. Not everyone believes that they know everything about the personal computer. But everyone who ever picked up a bat thinks he knows baseball. To do this well, you have to ignore the newspapers.”


end quote



I have the impression that the stats modern teams worry about are stats that leads to finding “better” players - i.e. the ones that will help the team win. But perhaps certain stats like home runs or strike outs lead to more ticket sales even if they don’t necessarily lead to more wins. If the baseball teams really ran like businesses, then they should find the stats that maximize profits regardless of whether the team wins.



Billy has never won anything. Period.


This thread is pretty far off topic, but Michael Lewis wrote quite a few interesting books on the financial world. I have a lot of respect for him. There’s an online talk of him with Malcolm Gladwell that I haven’t gotten around to watching yet.