Neoliberal Baseball

Taken in one way, the famous book (and then movie) Moneyball is a paean to the benefits of untrammeled competition. Some of the allure of sports is that it seemingly offers pure, uncorrupted competition, unsullied by issues of inherited advantage, racist prejudice, access to information unavailable to other competitors, or an uneven playing field structured by rules/laws that favor some players more than others.  Walk onto the baseball field, where the rules are openly known to all, and the umpires are impartial—and the results will go to the team that plays better.  (The Astros’ sign-stealing violates the equal information requirement.)

In Moneyball, intelligence and innovation succeed by doing what capitalists are supposed to do: find a more productive, cheaper, and better way to meet a need.  In this case, the need was to win more baseball games over a season than the competition.  And to do so while spending less money on payroll.  The trick was to value things the market didn’t value—and thus get productivity at a lower cost.  The stone the other builders rejected would be the Oakland A’s path to success.

Someone in the music business once said that the person who gets rich is the one who does it second.  The market needs to be softened up by the innovator—and then the copy-cat gets the biggest rewards.  Professional baseball embraced the “analytics” that drove the A’s innovative approach over a ten year span (or so). 

But—and here is where neoliberalism comes in—the terms of the embrace ended up reversing the priorities.  It no longer became a question of winning, except insofar as winning increased the bottom line.  Economics triumphed over the ostensible point of the whole pursuit—which is better called “the whole enterprise” at this juncture.

One key move was the conversion of WAR (Wins above Replacement; the key general numerical summary of a player’s contribution to his team) into money.  One WAR is deemed to be worth $8 million (that’s a 2018 figure; perhaps it has crept up a bit.)  In game terms, one WAR means a player will over a season of 162 games contribute to the team winning one more game than an “average player” would.  Added to the calculation of WAR is the ZIPS forecast system, which uses a player’s own history and a series of historical comparisons to predict the player’s likely future WAR over a given span of time.  In short, analytics produced a “scientific” measurement of any player’s “value.”  So much for market processes setting the price.  Now there was an “objective” measure of price. 

One more fact about baseball as a business needs to be added.  Players in baseball require a longer period of development than in basketball and football, the two other major money making sports in the United States.  Players can come straight from college (or even high school in the case of basketball) into the two other sports; there is usually two or three years (sometimes more, fewer times less) in the “minor” leagues before a baseball player is ready for the big time.  To compensate teams for subsiding these development years, those teams get to employ (the term used is “control”) players for the first six years of their major league careers.  In other words, players cannot participate in an open market competition for their services until they have worked for six years—often at a very significant discount from what they could earn if all teams could bid for their services.  There is no free market for the vast majority of players—since less than 30% of players even last six full years in the majors.

What has been the effect of this collision of analytics with the player control system?

Basically, teams now covet the younger, cheaper players as the way to keep operating costs down, while being willing to pay large contracts to “super-stars” (Mookie Betts, Gerrit Cole, Bryce Harper, Mike Trout).  The ones left holding the bag are the players who have been good enough to last six years in the majors, but who are in the one to two WAR a year range.  Few teams are now willing to pay (for example) $12 million a season for a player who is one to two games above the younger player who can be had for about $1 million for the season.  (Yes, it is possible to have a negative WAR; those are the players who don’t last.  As would be expected, a very large group of players clusters around the mean of 0 WAR; after all the whole system is built around identifying what is “average.”)

Let us now count the ways that this all resembles neoliberalism (admittedly an inexact term; but one taken in this instance not to refer to increasing privatization of once public functions, but to the current brand of capitalism that combines loud praise of free markets with various practices that, in fact, stifle competition; places economic return over all other considerations; and has a set of by now familiar strategies and consequences.)

1.  The evisceration of the middle class.  Baseball teams are trending toward having a top 10% (the superstars) on the big contracts and a set of disposable younger players cycling through during the “control” years.  The same growth of economic inequality we have been experiencing in the general economy.

2.  Taking advantage of the way the market is structured as the key to making money.  It is not through innovation, increased productivity, or a better product (see # 3 below on this point) that making money most depends.  Rather, the real key to financial success is working the system in your favor.  Competition is anathema to the neoliberal capitalist—as is risk.  The goal is to grab market share that is immune to competition and ensures little to no risk.  In baseball’s case, market share is secured by the control system and privileged access to the teams’ regional market.

3.  Branding is more important than the quality of the product.  It turns out that if you can maintain a loyal fan base, placate them with a superstar or two, then it doesn’t matter if you have a faceless supporting cast.  (College basketball has taken this to its ultimate logical absurdity, cycling in a new cast of characters every single year.)  The loyalty is to the team, not to the players.  Surprisingly, even winning and losing don’t matter than much given the bars to actual competition.  Yes, winning puts fans’ butts in the seats.  But it doesn’t much impact TV revenues so long as teams get to carve out their regional market—and keep other teams out of that market (as league wide rules enable.)  In short, a shoddy product is no bar to economic success.  Sound familiar?

4.  That the downsides of selling something mediocre are so low is because the real profits come from financialization, not from sales of a product.  Baseball teams are speculative investments—and like California real estate only seem to go up in value.  When the Kansas City Royals are sold for over $1 billion dollars in 2019 by someone who bought them for $96 million in 2000, even losing money on day-to-day operations over that 19 year period is a winning move.  In neoliberalism, it is the company’s overall valuation that is the source of wealth, not what it actually does or delivers for consumers. 

5.  Finally, it is worth noting that neoliberalism is usually associated with aggressive privatization.  But (as Christopher Newfield has demonstrated beyond doubt in his analyses of the “corporatization” of American public universities), the actual practice of neoliberalism (pharmaceutical companies are a great example) is to push certain costs of doing business (basic research for the pharmaceuticals, health care for its workers for Walmarts and McDonalds, transportation infrastructure for just about everyone) on to the public ledger in order to maximize its profits.  There is no more egregious example than the way professional sports teams get municipalities to build hugely expensive stadiums—ones that have a shorter and shorter life span. 

Moneyball may seem a charming story about how the wits of little Jack triumph over the Giant.  But we need to see how the Giant, although a little slow on the uptake, becomes the one who recovers to restructure the field once again to his advantage.  And how the Giant in the process repeats that classic move of economic activity: substituting the desire to accumulate wealth for the actual activity that was the original pursuit.

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