WHO ARE THE BIGGEST STARS IN BASEBALL? ECONOMISTS HAVE AN ANSWER
COLUMBUS, Ohio -- Was Don Mattingly of the New York Yankees the biggest star among Major League Baseball hitters from 1990 to 1994?
Such an assertion is sure to spark an argument among fans, but two Ohio State University economists have evidence to back up that claim.
The researchers developed a method to measure the elusive concept of "star quality" among baseball players based on how much fans paid for their baseball cards. They then came up with a formula to figure how much this star quality was worth to the players teams in terms of ticket sales, concessions and other revenue. (See charts at end of release.)
"Millions of baseball fans throughout the country are voting for their favorite players when they buy baseball cards," said Lucia Dunn, co-author of the research and a professor of economics at Ohio State.
"As a result, we can use the prices of baseball cards to
determine how popular certain players are and, ultimately, how much this popularity is worth to their teams."
Dunn did the research with Charles Mullin, a graduate student at Ohio State who conducted the study for his dissertation.
The researchers examined prices of Topps brand baseball cards for most major league players as listed in The Official Baseball Card Price Guide by James Beckett. They looked at card prices for the four years preceding the baseball players strike in 1994.
They then used a complex statistical analysis to determine how much of the value of each card was due to the players on-field performance -- statistics such as batting averages and ERA. The value of the card that couldnt be explained by on-field performance was then attributed to star quality or charisma.
With this data, the researchers determined not only which players brought in the most money based on their star quality, but also which players are overpaid and underpaid. (See charts.)
"We believe star quality is an important factor in determining how valuable a player is to his team," Dunn said.
In the researchers analysis, Mattingly ranked first in star quality among major league hitters from 1990 to 1994, bringing in an estimated $4.2 million to the Yankees in 1990 based entirely on his star quality, apart from his success on the playing field.
A separate analysis of pitchers showed that stars such as Roger Clemens were worth more than $3 million to their teams because of their star quality.
Players for teams in large cities such as New York are more likely to be listed as high in star quality because the large-market teams tend to bring in more total revenue. If these players played for a team in a smaller market, they probably would not have topped the star-quality list, said Mullin.
"Large-market teams such as the Yankees make the most total revenue, so their players are credited with bringing in more money," he said.
But this measure of star quality is based as much on popularity as on the size of the market, according to Mullin. For example, Ken Griffey, Jr. plays for Seattle, a small-market team, but ranks high on star quality.
Determining star quality isnt just an academic exercise, Dunn said. It has important implications for the bottom lines of teams. "Players who have star quality will draw fans to their team even when their playing statistics fall below that of some less popular players," Dunn said. "Clearly, you have to take the revenue-generating effects of star quality into account in measuring a players impact on his team."
One example is Jim Abbott, a pitcher for the California Angels who has become a fan favorite for overcoming his disability of having one arm. "Statistically, Jim Abbott is a rather average pitcher. But he attracts a lot of fan interest and brings people to the ballpark, and that doesnt show up in playing statistics," Mullin said. "Thats why measurement of star quality is important."
Many players are underpaid because there has not been a precise way to take their star quality into account when determining salaries, the researchers said. They calculated the most underpaid hitters and most underpaid pitchers based on the value of their star quality and their playing performance.
For example, Frank Thomas of the Chicago White Sox produced $12.6 million in revenue to his team in 1992, the research showed, but received a salary of only $600,000. "We believe if there was a perfectly competitive market -- which baseball certainly is not -- Frank Thomas would have been paid about $12 million in 1992," Dunn said.
While the researchers also determined which players are overpaid, they caution that the list has some flaws. For example, some players for smaller-market teams may not have been listed as overpaid if they played for larger-market teams that generated more revenue. Also, the analysis cant properly take into account the value of good defensive play. "Someone like Barry Larkin of Cincinnati probably shouldnt be listed as overpaid, but there is no good way for us to quantify his defensive value to the team," Dunn said. In addition, injured players will be credited for bringing in less revenue simply because they play fewer games.
(SEE FREE AGENT SIDEBAR ON NEXT PAGE)
FREE AGENTS SUFFER LESS SALARY DISPARITY IN BASEBALL, STUDY FINDS
COLUMBUS, Ohio -- No surprise here: free agents in baseball receive a better salary deal from their teams than do non-free agents, according to new research.
Non-free agents receive only about 22 percent of the revenue they generate for their teams, while free agents receive about 66 percent, said Lucia Dunn, a professor of economics at Ohio State.
Dunn co-authored a study which looked at how much revenue players generated for their teams based on both their on-field performance and their star quality. This is the first study to quantify how much players star quality is worth to their teams in total revenue. Dunn and Charles Mullin, a graduate student, calculated players star quality based on prices fans paid for their baseball cards. The results will be published this year in the book Advances in Economics of Sport (Volume 2, JAI Press).
The study found that hitters did worse than pitchers overall. Hitters received only 17 percent of the revenue they generated as non-free agents, and 50 percent of the revenue they generated as free agents. Pitchers received 38 percent of the revenue they generated as non-free agents. As free agents, pitchers may actually be overpaid: they received 113 percent of the revenue they earned.
"I dont expect baseball owners to stand up and say were right," Dunn said. "But I think this research is something for them to think about. There has been a certain amount of inequity because baseball is not a competitive industry. Thats one of the major issues that caused the baseball strike."
Dunn said she and Mullin plan to update this research regularly. "We hope this will have some impact on the owners assessment of the value of players. As sports become a bigger business, the owners are going to have to manage the teams in a more economically efficient manner. Theyre going to have to be more precise in measuring things like star quality when they negotiate new contracts."
Contact: Lucia Dunn, (614) 292-8071; Dunn.firstname.lastname@example.org
Charles Mullin, (614) 292-1361; Mullin.email@example.com
Written by Jeff Grabmeier, (614) 292-8457; Grabmeier.firstname.lastname@example.org
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