Matt Schwartz recently wrote a piece at Baseball Prospectus examining the best players according to "MORP", a sort of "best bang for your buck" statistic that estimates how valuable a player was in terms of dollars of revenue generated. The idea of the article (and I am vastly summarizing and simplifying here) was to find the most valuable players in baseball last year by subtracting their MORP from the amount of money they were actually paid (again, I am vastly simplifying the methodology).
The article, and MORP in general, is fascination; dollar for dollar Prince Fielder wasn’t nearly as valuable as Josh Johnson last year. There are, Matt concludes, a lot of players (a crazy number of whom are playing for the Rays) providing excellent value to their teams. Clearly, signing great players to cheap contracts is a great way for small market clubs to compete with the big boys. If you can sign Ben Zobrist, Evan Longoria, Carlos Pena, BJ Upton, Carl Crawford, and three or four fantastic pitchers to absurdly cheap deals, you can, as it turns out, run a train straight through the wallets of the AL East.
Near the end of the article Matt seems to insinuate that the availability of cheap talent is a big reason why complaints of big market v small market competitive inequity are overblown. I am in no way trying to lambast Matt Schwartz here; he is a great author and I have always enjoyed his work. More importantly, the sentence in question was a complete throw away thought in the last paragraph of the article. Attacking Matt for this one sentence would be crazy nit picky.
The idea that the Evan Longoria and Ryan Brauns of the world somehow prove that there is no competitive imbalance is, I think, a widely held belief, and Matt is just one of many to express the sentiment. As a Royals fan I am naturally predisposed to hate, with a visceral passion, anything that insinuates the Yankees and Red Sox aren’t all but handed the World Series every year by the economic structure of Major League Baseball. I was around when the members of the great outfield that could have been but never was (Dye-Beltran-Damon) all said "screw you, I am chasing the money" to the fans.
Just to be clear, the argument in question here is that small market teams can compete with large market teams by developing talented players and signing them to contracts that are, presumably, well under their ‘true’ value. In other words, the Royals/Pirates/Twins/Indians need to quit complaining, if they could draft and develop some good players they would be able to compete with the big boys. Because I am lazy and don’t feel like being creative with my prose, when I say ‘the argument,’ I am referring to this idea.
After spending some time with the indispensable baseball cube and some nerdtastic spreadsheets, I have, less than surprisingly, come to the conclusion that this idea is junk. The idea that player development can cure competitive imbalance caused by market size does not stand up to any sort of analysis, empirical or otherwise.
First, the argument makes a few presumptions that are ridiculous. Every team can draft good players who will eventually contribute in the big leagues. Player development is not the sole province of small market teams. The Red Sox and the Yankees have farm systems too, and, in the case of the former, damn good ones at that. Given that all clubs, big and small, have farm systems, why should it be the case that smaller clubs only get the privilege of competing with the big boys if they can vastly outperform their rich brethren in player development? If team A is significantly better at scouting and player development than team B (and has been for some time), then it seems like team A should be a significantly better team than team B. The argument presupposes, though, that this isn’t the case. If the Royals can significantly outperform the Yankees in player development, then, maybe, they will get the chance to compete with the Yankees for a title. Until then, though, the Yankees are just going to roll everybody, because that’s what you do when you have $200 million to blow.
But wait, the ******** Yankees’ fan argues, the Royals get great draft position every year. Its not the Yankees fault that the Royals keep pissing away premium draft picks on Colt Griffin and Chris Lubanski. In fact, the Rays are competitive exactly because they spent a decades worth of great draft picks on good players (Price, Longoria, Niemann, Young, and Upton were all top five picks).
First off, the underlying assumption here is still junk. Small market teams should have to spend a decade in the dumpster in order to amass enough talent to finally compete with the Yanks and Sawks? There is, though, a lot of intuitive pull to this idea. In basketball bad teams get lottery picks, draft good players, and are competitive again relatively soon. The Lakers are always going to be the Lakers, but there are plenty of good teams that stunk just a few years ago. These teams drafted good players like Lebron or Howard or Wade and soon found themselves relevant again. Ignoring for a moment that the NBA has salary cap, this seems relevant to baseball. Bad teams get good draft picks, and good teams get bad draft picks, right? Shouldn’t, then, bad teams have an advantage in drafting top talent?
To see if this is actually true, I took a look at where each player in Matt’s MORP article was drafted. The article has two relevant lists, pre arbitration and post arbitration players who, last year, provided the most value for their team. I wanted to see if there is any relationship between a player being drafted high and providing value to his future team.
To do this I took the quick and dirty route and, stealing an idea from fantasy baseball, looked the average draft position (ADP) of each group. I ignored the ten international free agents who were never drafted. The ADP for the mot valuable players in the post arbitration, pre free agency years of their career was 92.55. For the pre arbitration eligible (the cheapest of the cheap players, who usually make the major league minimum), the ADP was 112.15. The ADP for both groups was 102.35.
If you look at the top fifty most valuable players in their team controlled years, there does not seem to be much relationship between draft position and value provided to a team. Sure Zack Greinke and Joe Mauer were pretty solid number one selections, but the average player on the list was passed over about three times by every team in baseball before finally being picked. To reiterate; in the group of top fifty most valuable players in baseball who are still under team control, the average player was, in the draft, passed up by every team in baseball, then passed up by every team in baseball again, then passed up a third time, and then finally drafted just outside of the top 100.
ADP makes a nice, intuitive point about talent evaluation and scouting. Scouting is, at best, an inexact science. Scouts are tasked with looking at either college or (gulp) high school kids and trying to figure out what kind of a player they will be in five or six years. The difficulties of scouting are bourn out in the draft; Albert Pujols famously went in the 13th round, and, as the MORP ADP shows, a lot of really good players had to wait a while to hear their name on draft day.
The idea that draft position does not correlate to future value is supported by (slightly) more sophisticated analysis. For the post arbitration, pre free agency players the correlation between draft position and value is -.44. In a perfect world where the top draft picks always produce the highest value the correlation would be a -1. A low draft number should mean a better player, leading to a high value number. -.44 is not a strong correlation, though, and the correlation for the pre arbitration group is even worse at -.19. The correlation for the two groups combined was a still unimpressive -.29. The relationship between draft position and future value is very weak. If you, like me, prefer a pretty picture to a boring set of numbers any day of the week, here is a graph that nicely illustrates the point.
The vertical axis is value (roughly MORP minus compensation), and the horizontal axis is draft position. A few players, Ian Kinlser most notably, had to be left out to keep the graph from stretching all the way to yankeesreview.com. If you think the graph just looks like a bunch of random dots, you are basically right. As the low correlation attests to, there isn't much relationship between draft position and value.
So, no, having a good draft position is far from a guarantee that a team will draft a player who will eventually provide solid value. The lack of correlation between draft position and value bears out a simple truth; young talent is tough to evaluate, and plenty of valuable players drop far into the depths of the MLB draft before finally being taken. Sure, the Royals could have drafted Ian Kinsler or Albert Pujols, but every other team in baseball, big and small market alike, also had every opportunity to pick them up. The top fifty most valuable players is a list of really, really good baseball players signed to really, really good contracts. If the average player on this list was passed on three times by every team in baseball, it’s hard to argue that a high draft position is the ticket to competitiveness for small market teams.