Keynote
Moneyball: The Art Of Winning An Unfair Game

Michael Lewis, Bob Lefsetz and Billy BeaneIt turns out that the business of baseball isn’t so different from that of concerts. The playing field is not even close to fair, the price of talent fluctuates in extreme, often irrational, ways and the art of making a deal is still of paramount importance. It’s also easy to get burned by relying too much on gut instinct.

“We didn’t feel we were being risky. We felt we had better information,” said Oakland Athletics general manager Billy Beane when asked about adopting a new ap-proach to building his team. “We thought it was perfectly rational and that doing anything else would be irrational.”

Beane, the character study of Michael Lewis’ bestselling “Money-ball” book that recently got the Hollywood treatment with Brad Pitt in the lead role, is credited with changing the way major league baseball teams are built. His small-market, low-budget ballclub strung together multiple playoff seasons, beating teams with double or triple the payroll by finding and exploiting inefficiencies in the market of available players.

The core of Beane’s philosophy was a highly statistical, data-based method of evaluating talent. How-ever, this was not merely checking which slugger clobbered the most home runs or which pitcher threw the best fastball, as those were the players every team wanted and therefore commanded the fattest contracts.

Billy Beane

“Instantly I saw that this was not just a baseball story,” said Lewis, who was the co-star of Thursday’s keynote panel discussion. “It had general application to any market. Especially the way markets value things.”

What the Oakland front office discovered was that most of baseball was overlooking a hitter’s ability to get on base by walks as well as hits (on-base percentage) rather than by hitting alone (batting average). Players with lackluster batting averages but solid on-base percentages were just as effective in winning games, but they were priced differently. This allowed Beane to replace players who left for greener pastures, and super-sized contracts.

“The ‘save’ statistic was an example of counting things that didn’t really mean that much,” Lewis said. “It distorted the value of these relief pitchers. The statistic called a ‘save’ was not actually a big deal.

Michael Lewis

“It’s amazing this exists in baseball, a sport that’s been around for 150 years. Millions of people think they know a good player when they see him, but Oakland built a juggernaut” with relative unknowns, players other teams did not appreciate.

With the release of the book, the secret was out. Other teams had already taken notice of what Oakland was up to, and the Boston Red Sox were so committed to “Moneyball” that they offered Beane much more money to join their franchise and do it himself.

He ultimately turned it down, and the Red Sox, who had not won a World Series since 1918, found the promised land in 2004.

“We were probably the first to hire maybe a pure statistician,” Beane said. “The Yankees now have 21 guys, headed by a single mathematician. All he does is run data.” Old-school player scouts began to panic, fearing they would soon be replaced by eggheads on computers.

Keynote moderator and industry commentator Bob Lefsetz kept things on track, including asking whether ballplayers are like rock stars, quoting David Lee Roth (“Get laid every night, just maybe not with who you would want”). Beane, as a former Major Leaguer with a wife and daughter, mostly let the crowd’s laughter answer that question, but he did mention how on long road trips in the minor leagues the guys would employ empty KFC buckets rather than move the poker table to get to the bus bathroom. Sounds not much unlike tour buses.

Asked where a baseball player would learn the shrewd negotiating skills required of a GM, Beane said, “I actually have an answer to that but I’m not going to tell you.” Lefsetz jokingly inquired whether prostitutes were involved.

As far as Beane’s reaction to all the attention, “When Brad Pitt’s playing you, it’s all good.” And he only had one problem with the book. “I thought it was that I had given away his secrets,” Lewis said. “But Billy says, ‘You have me saying ‘fuck’ all the time. My mother’s going to be so pissed.’” Sure enough, at a speaking event in San Diego, Lewis had no doubt who was the scowling woman “of a certain age” up front.

“She came up to me and said, ‘My son does not talk like that.’” Lewis took her to dinner and tried to charm her for two hours. “She was uncharmable.”

On changes since the 2002 season, which for Oakland culminated in a record-breaking 20-game winning streak, Beane says the most dramatic is the acceleration of technology, which makes for quicker and more accurate player data collection.

Lewis wasn’t making predictions, but said it’s possible to someday see a “Moneyball”-type change in the concert industry.

“In this industry, where talent is very widely priced, finding a little edge is going to mean a lot in dollars if you price that talent better. In industries when talent is appraised by the gut, those are a natural place for new methods.

“People willing to behave unconventionally and use it as a weapon will always have an advantage.”

And, just like with baseball, a new school of thought in concerts would surely face resistance from “the old guard.” In that case, only time will tell who’s right and if there’s room for both.

| Ryan Borba |