It is possible for economists to have a non-dismal side. I double as a sports economist and a sports fan, and often do both at the same time. I find this an ideal combination, especially when the teams I follow do well (or, as is usually the case, do badly). I follow many teams, some are more successful than others. One of the teams I will confess to supporting are the Australian National Rugby League (NRL) team the South Sydney Rabbitohs
. The Rabbitohs are the most successful club in the history of the New South Wales/National Rugby League with 20 premierships from their inception in 1908. Their last premiership, however, was won in 1971. They were also cut from the NRL in late 1999 and spent two years in the wilderness before being reinstated into the League for the 2002 season. They are presently part-owned by the actor Russell Crowe, who purchased the club in 2006. This season they surprised more than a few people including myself when they captured 3rd place in the NRL premiership and enjoyed their first playoff victory since 1987 in only their second finals appearance since 1989. They were defeated by both finalists, and there is no shame in that. The fact that they exceeded expectations makes for an intriguing question when one puts on an analytical hat: How did they manage that? Did privatisation play a part? Or was it something else?
An absolutely fascinating example of how to think about the question of ‘how’ comes in the form of another team I follow closely – the Major League Baseball Oakland Athletics (also known as the A’s). Some may have heard of this team before – they are the subject of the movie
Moneyball. Well, they have shocked the baseball world this season by doing the unthinkable again – making the playoffs despite one of the league’s lowest payrolls. They did it on the back of trading two of their star starting pitchers and their All-Star closer in the offseason and securing what many believed to be no better than castoffs from the other trading partners that included a mix of rookies and journeymen. Almost everyone, myself included, gave them no chance. They were supposed to be rebuilding. They were supposed to be scrapping for the lower rungs on the league table. They didn’t have what it took to challenge the Texas Rangers and the Los Angeles Angels, two powerhouses who spent up large to make runs at the playoffs. It is generally accepted that it is incredibly difficult to succeed in the major leagues if you are a small market/low payroll team. The A’s knocked the Angels out of playoff contention by winning their third to last game of the season on Tuesday (NZT) and seemingly unbelievably securing the wild card position in the American League on the back of stellar pitching by a largely unproven starting rotation, a bullpen that has gone from strength to strength as the season has worn on, and a stunning clutch hitting offense that gets the runs necessary to outscore their opponents. By winning their penultimate game against the Rangers yesterday (NZT) they are now incredibly tied with the Rangers for the division lead, and a win today will give them an even more improbable division title. If you haven’t read Moneyball or seen the movie, I would recommend it. The story is utterly compelling, and the analytical nature in which the success of this team who outperformed their more wealthy opponents by identifying an alternative way to build a team and do it on the cheap. Oh, and not just compete, but win consistently. There has also been a really, really interesting paper by economists Jahn Hakes and Skip Sauer on evaluating the Moneyball hypothesis in the Journal of Economic Perspectives – it’s also a great read (linked here – ungated access
). I dare say questions will be asked as to how they have done it again in 2012 from seemingly nowhere. Everyone said the Moneyball strategy had lost its edge when the A’s dropped from sight after their last playoff appearance in 2006. Six years later, they are back in the most unlikely of circumstances. Is it Moneyball Mark II? It is questions like these that make an economic way of thinking such an interesting and challenging discipline!
As an aside, I can’t help but wonder whether the crapshoot that is playoff baseball will this time shine on the A’s. I hope the ride lasts.
POSTSCRIPT: The A’s defeated Texas in their final regular season game of the season to win their division. Interestingly enough, while Moneyball got them to the playoffs in the early 2000’s, will Moneyball Mark II get them to the World Series?