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Wednesday, September 20, 2006

 

Steroids and Money Ball - updated

This was published elsewhere a while back, I'm reposting it here, together with an update at the end:

N.B.! THE FOLLOWING ARTICLE IS SPECULATION AND NO LEGAL CLAIM OF CRIMINAL ACTIVITY BY MANAGEMENT OF ANY LEAGUE , TEAM, OR SPORT IS MADE IN THIS ARTICLE. NO DEFINITE CLAIM AS TO THE STATE OF MIND, KNOWLEDGE, OR INTENTIONS OF ANY PRESENT OR PAST MEMBER OF MANAGEMENT OF ANY LEAGUE OR TEAM WITHIN OR WITHOUT THE MLB IS MADE HEREIN.

I'm beginning to think that while there's something to "moneyball", it's not the real story. Sure, stats help you select players and always have, but all the hype may (also) have largely have been a useful cover story for the real bargain hunting: namely consciously going out and finding young players with merely good stats who weren't taking steroids, but were likely to do so, or who had just begun to - who therefore were going to be a whole lot better than their stats would make you think.

Seems to me, speculating, that Billy Beane was in an excellent position to watch that economic process take place, understand it exactly, and exploit it thoroughly. It would be hard to argue that he has uniformly avoided hiring or retaining all players who might use steroids.

So what did Billy Beane know and when did he know it? He's said what he lacked as a player was (paraphrasing badly, from memory) "that he had real skills that excited the scouts but lacked the will to do whatever it took to be a really good baseball player." We now know (as he presumably knew way back when - unless my timeline is way off, and maybe it is) exactly what "whatever it took" cashes out to - performance enhancing drugs that were known to carry real risks by then. Certainly, unlike a certain Californian governor, Beane wasn't willing to do whatever it took to his body pharmaceutically to have a truly spectacular career at any price - that much seems clear in any case - but in struggling with this question, or once he was in management, Beane may have realized that he had some very valuable economic information about just which undervalued players were in fact likely to become stars. With regard to that timeline, Billy Beane's debut in the majors was in 1984 and his last game in 1989.

Perhaps his consolation prize for knowingly watching less highly talented cheaters pass him by and get the biggest headlines and longest careers as players, was to proceed directly to management and cash in this knowledge. ("Assuming any major league player has ever used steroids during this, earlier or subsequent periods.") As the old saying goes, the fox knows many things, but the porcupine knows one big thing. Steroids, and just whose stats were about to climb skyward thanks to them, were a big thing to know about back then "if anyone in baseball has used steroids to enhance their performance." Very big, if you were building a ball club on a relatively small (but still multi-million dollar) budget.

The key realization in this, would be that players who hadn't taken steroids but were now started, or were about to, were the greatest bargains in the marketplace, with the greatest hidden upside possible, unreflected in their known stats. Maybe Billy Beane was the first person to both figure that out, if he ever did, and then to discern the extreme economic value that seemingly small bit of knowledge represented. Maybe he still hasn't, or hasn't consciously figured this out to this day. But if I were a betting man....

That doesn't mean that there's nothing to sabremetrics. Not at all. But on base percentage (under whatever terminology) isn't a new concern, and the new stats and studies may actually have been very much the smaller part of the moneyball story. Or, the renewed value of novel statistical studies may have come about precisely because steroid use had altered so many trends and made traditional expectations, once better founded statistically, had become somewhat obsolete. (See initial legal claim.)

Maybe congress should have called one more witness. But then again, pardon my cynicism, but perhaps that's precisely why they didn't call on a bunch of prominent management figures to testify.

A REPLY TO UNPUBLISHED OBJECTIONS/QUESTIONS FROM DAN AGONISTES (danagonistes.com):

With it's concentration on OBP, pitching accuracy, and so much more, I agree that there's much to moneyball - but I do wonder whether it's a full and adequate explanation of Billy Beane's success. However we have to keep in mind that what was privately known by some or many experts but kept private as a business advantage can't be directly known. We don't know this sort of thing except by, say, looking at prices paid for various types of pitchers to see what knowledge has been discounted, or not, as in any other market. No doubt much proprietary knowledge about baseball development was neither very uncommon nor widely broadcast. I do begin to suspect that a flurry of publicity over moneyball may in part at least have been a good cover for the real bargain hunting, which was looking for players whose performances were just about to get pumped up. Also, as I'll argue shortly, statistical study of baseball skills development can hardly help but incorporate knowledge of what are in fact the consequences of steroid use "if indeed statistically significant numbers of developing baseball players have ever taken steroids" - last clause applies to whole paragraph.

I don't think Billy Beane or anybody else had to push steroids - the carrot of multi-million dollar contracts and fame was surely more than sufficient for many players “if indeed any have taken steroids”, and these humongous incentives were already in place. Not to mention that the legal implications from civil suits spurred by later medical problems by anyone pressured to take steroids could obviously have been massive, too. Plus, and this is very important to note, I'm not saying he or anyone else in management isn't ethical (as ethical as other non-whistle blowers at least, and there are hordes of those) much less a criminal, or performed any act that would now be criminal. I'm only saying that he or they may have realized just how important that key data point, steroid use, was in changing all the other data points; and figured out that this meant that the real, spectacular bargains in the marketplace were those players whose known stats reflected no steroid use and who were middle-of-the-pack or a bit better - but who had recently started to take steroids seriously, or whose known attitude or associates suggested they would or might soon "assuming any steroid use at all" - quoted fragment applies to paragraph as a whole.

In fact, to exploit this for economic advantage, it might only have been necessary to invest broadly in players from places where steroid use was known to be relatively low, such as colleges without a high priority on athletics in general or baseball in particular. The purpose of such a strategy being to scoop up players who hadn't yet been exposed to a lot of steroid use, or seriously considered it. Conversely, a related strategy would have been, or might still be, to investigate carefully and avoid all players who were longer-term steroid users since their stats and market price had already "discounted" that steroid use, giving them a much lower upside under modern conditions (as well as a possible health and injury downside.) That is, there would be no further large "bounce" from steroid use available to such long term users. Thus, paradoxically, one could economically exploit the trend toward steroid use efficiently by actively avoiding some steroid users – namely the long term users - or even all steroid users, in effect counting on the fact that at least some of there still pure players might start using on their own. Economic profit lies in the upside, after all.(Literally so, since "economic profit" is a technical term within the field of economics to designate above-market profits, and that's how I'm using it here). To summarize this "steroid avoidance" strategy, players who have been taking steroids for some while and don't have a further upside possibility from now deciding to live "better" through chemistry are, relatively speaking, worse investments in the long term.

Of course, sabremetrics, etc could have discovered and exploited such trends, partially at the very least, with or without having explicitly discovered the underlying variable of drug use - but too many people in the industry knew precisely what was going on for that to be an entirely credible claim, I suspect. And who better to explicitly notice the economic and career consequences of drug use than a talented player who was deprived of the shining career it looked like he was going to have, in no small part because of widespread steroid abuse by so many others who didn't care as much about their future health? That's a description that may well fit Billy Beane, a first round draft pick in 1980, to a T. One has to imagine that watching that happen to one's career hopes would have stung deeply, "if indeed anyone in baseball Billy Beane knew or knew of ever took steroids during this period." Billy's a very bright guy by all accounts, I suspect he knew just what had happened to his career "whatever that was", and I also suspect his being bone lazy or ill-omened despite his talents wasn't the backstory to his unspectacular career. Maybe I'm wrong - it's very difficult to vouchsafe what other people thought or knew and kept largely to themselves, but I do believe a good argument can be made that he was in a position to know these things and that if he did, the consequences over the last decade or so would have been similar to what we've seen. See beginning legal claim.

Whatever anyone knew, it's no doubt true that a certain amount, maybe even a very large amount, of the hidden upside that moneyball-type statistical investigations have uncovered and exploited has in fact been made up of diverse markers of steroid use (such as, say, paradoxical increases in stats when players move up to a higher class of league), together with novel trend changes caused by steroid use "if steroids have been in use." Whether or not anyone ever discerned that as an underlying cause wouldn't have prevented the economic exploitation of such secondary trends once they were unearthed. An obvious possible example of a novel change in trends - is increased injury. This could perhaps be a factor explaining why it's now true that early pitching talent is heavily discounted because injury is pretty likely to erase that early promise, or injury-related changes in trends might only affect hitters to a large degree "if steroids have ever been used."

In horseracing, drug use leads to a sharply increased risk of injury (harness racing being one historic response to that risk, one may speculate, but see the initial legal claim again.) This risk comes about not so much because of direct damage to the body as indirect injury, since performances are pushed over the redline with erratic consequences. Nature likes to work within what structural engineers would call "margins" and drugs work in good part simply by overriding these safety margins, enforced by fatigue and otherwise. If you push your fighter aircraft over the redlines on the dashboard dials and outside its secure "performance envelope" more mechanical breakdowns occur, not just to moving components of the engine, but also to passive restraint mechanisms that are the avionic equivalent of hamstrings. The same sort of injuries have likely been happening in baseball "if indeed steroids have been used in major league baseball at any time." I think it would be difficult indeed to argue that today's players are markedly more robust, and less susceptible to injury than previous generations. (Lawyers are a leading cause of double negatives.) It would be somewhat confounding to medical science if steroids have nothing at all to do with recent injury trends "if indeed steroids have ever been used by major league baseball players." (Lawyers are a contributing cause of quotation mark usage.)

A large economic/investment change from widespread steroid use in earlier career stages "if any players have taken steroids early in their career or otherwise" would be a trend toward more drop outs from injury of talented players who don't reach the majors at all, shorter careers for first draft picks than in earlier times, and a consequent advantage for those teams making broader investments in many cheaper players rather than making very heavy investments in a very few highly performing young players who are now more likely not to have a career at all (or to be passed by egregious drug abusers.) A strategy of broader investment sounds somehow familiar, to me, and might to the reader. (Quoted fragment applies to the paragraph as a whole and by implication, to each sentence of same.)


In case this article disappears from everything2.com, I might mention, with the greatest respect to Everything2, that I will be posting articles of mine censored from everything2 (about twenty percent of the articles I've written for them so far) at my blog at completeconfusion.com. Revisions and fuller versions of articles and late additions to bibliography will also be posted there for similar reasons - censorship always has a degree of predictability, so I do self-censor some of what appears under my rubric at everything2 in advance of publication there; needless to say. I don't mention this self-censorship as a slight to everything2 in any way at all, since this is of course an all but inevitable consequence of any external restraint on speech.

I'm very grateful to Everthing2. Everything2 is a private concern with every legal right to censor what appears there by elimination as a whole, for any reason whatsoever, which I recognize and respect fully. I'm grateful for the opportunity to publish many things at everything2.com, as well as being glad that the internet is large.

Initial message similar to first part sent July 12, 2005. First published here and on the web July 14, 2005. Last revised July 14, 2005.
Russell Johnston
This article may be found at:
http://confusioncomplete.blogspot.com/2005/07/steroids-and-moneyball.html
Note that this address is confusioncomplete, etc not completeconfusion, etc. Suitably confusing, eh?
completeconfusion.com however does redirect to the above site at blogspot.

* * * * * * * * * *

The Update is some support from a recent article (excerpt):

Drugs: Sports' Prisoner's Dilemma
By Bruce Schneier (WIRED)
02:00 AM Aug, 10, 2006

The doping arms race will continue because of the incentives. It's a classic prisoner's dilemma. Consider two competing athletes: Alice and Bob. Both Alice and Bob have to individually decide if they are going to take drugs or not.

Unfortunately, Bob goes through exactly the same analysis. As a result, they both take performance-enhancing drugs and neither has the advantage over the other. If they could just trust each other, they could refrain from taking the drugs and maintain the same non-advantage status -- without any legal or physical danger. But competing athletes can't trust each other, and everyone feels he has to dope -- and continues to search out newer and more undetectable drugs -- in order to compete. And the arms race continues.

Some sports are more vigilant about drug detection than others. European bicycle racing is particularly vigilant; so are the Olympics. American professional sports are far more lenient, often trying to give the appearance of vigilance while still allowing athletes to use performance-enhancing drugs. They know that their fans want to see beefy linebackers, powerful sluggers and lightning-fast sprinters. So, with a wink and a nod, they only test for the easy stuff.
For example, look at baseball's current debate on human growth hormone: HGH. They have serious tests, and penalties, for steroid use, but everyone knows that players are now taking HGH because there is no urine test for it. There's a blood test in development, but it's still some time away from working. The way to stop HGH use is to take blood tests now and store them for future testing, but the players' union has refused to allow it and the baseball commissioner isn't pushing it.
In the end, doping is all about economics. Athletes will continue to dope because the prisoner's dilemma forces them to do so. Sports authorities will either improve their detection capabilities or continue to pretend to do so -- depending on their fans and their revenues. And as technology continues to improve, professional athletes will become more like deliberately designed racing cars.

http://www.wired.com/news/columns/0,71566-0.html?tw=wn_technology_medtech_11

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