Revenues vs. Wins: Motivations of General Managers in Major League Baseball 公开

Adler, David (2011)

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Revenues vs. Wins: Motivations of General Managers in Major League Baseball
By David Adler
Using data on free agent signings in Major League Baseball, this paper examines the value added
by free agents to their new teams and develops a new statistic called Wins Above Current. By
converting the Wins Above Current into dollar terms and comparing it to the difference in
salaries between the old and new players, the signings can be classified as revenue maximizing
or win maximizing. It is shown that both teams and individual signings are predominately
revenue maximizing, indicating that the current policy of revenue sharing in Major League
Baseball serves to weaken the competitive balance. A McFadden's choice regression determines
revenue maximizing teams tend to pick players with more home runs, or players that will
continue to bring fans and excitement to even non-competitive teams.

Table of Contents

Table of Contents

I. Introduction 1

II. Background Information 2

III. Data and Empirical Methods 4

Table 1 - Selected Summary Statistics 8

IV. Results 9

Table 2 - Free Agent Signings by Team 10

Table 3 - Types of Free Agent Signings by Team 13

Table 4 - Regression Results Using Free Agent Value as Independent Variable 15

Table 5 - McFadden's Choice Model of Free Agent Signings by Type 18

V. Conclusions 19

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