Pitched Unfairly

Oakland Athletics Baseball Operations

103 wins at a third of the price.

2003 budget case · November 2002

Final · 2002WinsPayroll

OAK103$40.0M

NYY103$125.9M

Head to head: NYY 5–4. Noted.

The decision

Keep buying wins where nobody's shopping.

Approve the 2003 plan: payroll stays in the bottom third, and we keep paying for on-base percentage instead of reputations.

Our cost per win, 2002

$388K

Payroll
$40.0M
28th of 30
Wins
103
Tied for most in baseball
League average
$837K
per win, all 30 clubs

The cost of the status quo

Every star we grow, a richer team buys. Last winter, three.

DeparturesTo2002 salary

Jason Giambi1B · 2000 AL MVP NYY $10.43M

Johnny DamonCF · Leadoff BOS $7.25M

Jason IsringhausenCL · 34 saves STL $2.75M

Their new teams pay them. Half our payroll. $20.4M

The options

Three ways to replace them. One fits the budget.

  • Option A Outbid them Match New York's $125.9M. We have $40.0M. Out of budget
  • Option B Trust the eye test Buy speed, tools and batting average, like the scouting room always has. 29 teams already bidding
Option C Buy on-base percentage Walks, patience, outs not made. The market prices them like they're free. They're runs.
Recommended

What's undervalued

The market prices the name. We price the work.

The market buys

Jason Giambi

1B · New York (AL)

2002 salary
$10,428,571
Times on base
300
On-base pct.
.435

$34,762per time on base

Our 2000 MVP. Now in pinstripes.

We buy

Scott Hatteberg

1B · Oakland

2002 salary
$900,000
Times on base
212
On-base pct.
.374

$4,245per time on base

A catcher who can't throw since elbow surgery. Learned first base in spring.

8.2xcheaper per time on base

The ROI model

A marginal win cost New York 3.5 times what it cost us.

(Payroll - floor) ÷ (Wins - replacement)

Assumptions. Change them.

25 players at the $200K minimum = $5.0M

Compare with

OAK$40.0M · 103 W

$636K

NYY$125.9M · 103 W

$2.20M

3.5xwhat we pay per marginal win

Proof, against all 30 clubs

The league line says $40M buys 74 wins. We won 103.

60 W80 W100 W $40M$60M$80M$100M$120M +29 League line

Results

Then it won 20 straight, an American League record.

  1. 1 W TOR 5-4
  2. 2 W TOR 4-2
  3. 3 W CHW 1-0
  4. 4 W CHW 9-2
  5. 5 W CHW 7-4
  6. 6 W @CLE 8-1
  7. 7 W @CLE 6-3
  8. 8 W @CLE 6-0
  9. 9 W @CLE 9-3
  10. 10 W @DET 9-1
  11. 11 W @DET 12-3
  12. 12 W @DET 10-7
  13. 13 W @KC 6-3
  14. 14 W @KC 6-4
  15. 15 W @KC 7-1
  16. 16 W MIN 4-2
  17. 17 W MIN 6-3
  18. 18 W MIN 7-5
  19. 19 W KC 7-6
  20. 20 W KC 12-11

Game 20 · Sept 4 · vs Kansas City

  1. After 3 11-0 Comfortable.
  2. Top 9 11-11 Less comfortable.
  3. Bottom 9 12-11 Hatteberg, pinch-hitting, walks it off.

Risks

Every risk on this list already happened. We're still here.

RiskWhat happenedMitigationStatus
Short seriesPostseason Lost the Division Series to Minnesota, 3-2. Game 5 by one run. Budget for 162 games, where talent shows. The $126M Yankees also went out in round one. Accepted
Stars leaveFree agency Giambi, Damon and Isringhausen walked last winter. Departing free agents return draft picks. Ours came back as six extra first-rounders. Converted
Key personGeneral manager Boston offered our GM $12.5M to run the Red Sox. He said no. Declined

The plan

Grow it cheap. Buy it unloved.

  1. June 2002 Draft for performance Seven first-round picks, every one a college player with a track record.
  2. You are here This winter Buy on-base, not names Replace whoever leaves with what the market underprices.

Cy Young winner. Salary: $295,000.

The decision

Approve the plan. Keep buying on-base.

Next step: sign-off before the winter meetings.

Ownership approval required. Scouting room approval appreciated.