The Business of Player Development
The pitch to MLB teams
Player development will be to the 2020s what Sabermetrics was to the 2010s. That’s it. That’s the pitch.
Don’t take my word for it.
It’s what Ben Lindbergh and Travis Sawchik wrote in the MVP Machine. It’s what Eric Longenhagen and Kiley McDaniel’s hinted at in Future Value.
It’s why Driveline grows and grows and grows. And it’s why the LA Dodgers hired my co-founder Jimmy Buffi nearly 5 years ago.
Once we accept player development is what will separate teams for the next decade, the next question is how teams should position themselves.
Realize where value lives
Given the current rules of Major League Baseball, there is extreme value in having a superstar on your team who has yet to hit free agency.
This is true in every sport.
Dak Prescott offered tremendous value for the Dallas Cowboys as he earned less $3 million total overs his first 4 years…while performing like a top 10 quarterback. Even if Prescott improves, his value will be fundamentally different when he earns over $30 million in 2020 alone.
While this idea is more obvious in a hard capped league like the NFL, front offices and team owners will always care about their bottom line.
Finding value
Throughout sports, every organization knows finding hidden talent- in the draft or in free agency- is a boon to team success.
This was the core of Sabermetics and the Moneyball movement.
Over a decade ago, a few teams were fundamentally better at realizing what correlated with wins and losses. They realized basic statistics like batting average, RBIs, and ERA had too much randomness and were too greatly impacted by things outside of the player’s control.
So instead, these teams looked at “advanced statistics” like OPS (on base percentage + slugging percentage), WHIP (walks and hits per inning pitch), which stripped out external variables, and more, as they were more predictive of future success.
Additionally, they calculated Wins Above Replacement, or WAR. This all-encompassing metric shows how much a single player contributes to a team’s win loss record- and predicts their ability to do so in a subsequent season.
To be clear, these metrics work today as well as they did ten years ago. The problem is they work for everyone. There is not a team in Major League Baseball that doesn’t view roster construction through this lens, and there is not a team without multiple advanced statistics degrees in their organization.
Finding value is still possible. It just gets tougher every day.
Creating value
As teams cannot easily find overlooked players, the smart ones find new ways to gain an edge- they create value.
MLB teams draft prospects that almost always spend time in the minors, most likely for multiple years. This gives prospects time to develop- to throw harder and run faster; to improve their swing, their study habits, and more.
Rather than looking for a 1st round talent in the 10th round, top organizations create environments where their 10th round picks develop into better players than the 1st rounders picked before them just a few years earlier….even if the players were properly evaluated at the time.
We see examples of the player development movement all over the sport:
Look no further than Driveline Baseball, which has grown from a small training facility in 2012 to the gold standard for player development due to their emphasis on objective data.
Or look at the deal between Major League Baseball and Hawk-Eye, installing high tech cameras in every stadium to aid in ball and player tracking.
Finally, look at the countless sports tech companies popping up, with industry leaders like Diamond Kinetics, Kinatrax, K-Vest, and others.
An extreme focus on data driven player development gets 1) more important and 2) easier to implement every day. It is why we- at Reboot Motion- argue player development is the single best way to drive value to an MLB organization.
How we pitch MLB teams
While the value of player development goes way beyond Reboot Motion, I wanted to give an example of how we pitch teams:
One of the amazing things about baseball is- thanks to Sabermetrics- determining value is easy. According to Fangraphs:
The cost of 1 win on the free agent market in 2020 was $8 million.
Every 9 runs scored (or not given up) correlates to 1 win
A 1 mph change in fastball velocity = .3 change in ERA
If a starting pitcher throws 150 innings in a season, we estimate that 1 pitcher adding 1 mph to his fastball is worth nearly $4.5 million.
(And don’t worry- we do way more and charge way less 😉.)
What does “worth $4.5 million” mean?
We understand letting up 5 less runs per year does NOT mean an MLB owner will put another $4-5 million in his or her pocket.
But it does mean an organization can:
Spend less on free agency and remain as/more competitive
Build a robust farm system for future flexibility
Create an attractive environment for talent
Put simpler: all else equal, teams that focus on player development will win more.
Does this take money from athletes?
No. Quite the contrary. A team’s player development focus allows athletes to achieve their full potential. While it is very possible that player will reach free agency and move on, this should be viewed as a positive by all parties.
For the team- they got multiple years of a great player. And yes, they probably got some of those years “below market”.
For the player- they get a big pay day earned through their hard work, but aided by a great organization.
Why player development will dominate the next decade?
In summary:
Finding value is too competitive. Dominate teams will look elsewhere. They’ll look earlier in the process.
Technologies are emerging. While we are biased to what we’re developing, companies and individuals are doing great work everywhere. Whether it is top academies emphasizing smarter training or great advancements in motion capture and software products, teams and players can do so much more today than they could 10 years ago.
Players know their value and will take control of their future. Young, top performers in any industry gravitate towards organizations that help them grow. Top engineers want to work at Google. Top business professionals want to be at McKinsey and Goldman Sachs. Top athletes will find organizations where they can develop.
Investing in people is always a winning strategy. We’ll see who rises to the top in baseball.
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Fangraph sources: