PDF Summary:Moneyball, by Michael Lewis

Moneyball: The Art of Winning an Unfair Game is the story of the 2002 Oakland Athletics and their general manager, Billy Beane. Beane assembles a winning team on a shoestring budget, by using an analytical and scientific approach to evaluate each player’s contributions. Although the A’s have many players with atypical physical attributes and unusual hitting or pitching styles, they excel in overlooked statistical categories, like on-base percentage, that were typically dismissed by baseball traditionalists. This enables Beane to get maximum efficiency from his team, earning wins at a fraction of the price paid by the rest of the league.

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Billy has been burned in previous drafts by his scouting staff’s insistence on drafting high school players over college players, despite the objectively better performance history of the latter group. Based on his own experiences as a high school draftee, Paul DePodesta’s statistical analysis, and his insights from reading Bill James, Billy Beane establishes a new rule for his club going into the 2002 draft: no high school players.

Billy and Paul create a shortlist of 20 players they wish to select, many of them overlooked and undervalued, but nevertheless, extremely talented college players with a talent for getting on base. But getting most of them, or even some, is difficult. Whether or not they are still available depends on what the other teams do. The picks any team ends up with depends on a combination of prioritization, strategy, and pure luck.

At the top of Billy’s shortlist are two amateur players—fielder Nick Swisher and catcher Jeremy Brown. Swisher is one of the relatively few players about whom both the traditional scouts and the sabermetric-focused newcomers are in agreement: the young player is a surefire MLB star.

Brown, on the other hand, is a highly unconventional pick. Most of the scouting on Brown assigns him a very low place in the draft, if, indeed, he is to be drafted at all. Although he has what appear to be great stats coming out of college, most of the scouting world (including the A’s own staff) has dismissed him as being too heavy to make it as a major league baseball player.

As the draft unfolds, Billy and his staff can’t believe their good fortune. As the rest of the league makes shortsighted draft choices (including many high school players), more and more of the A’s targeted players are available. The team snags 13 of the 20 players they had targeted, including Jeremy Brown (typically, getting three or four is considered a success).

Billy Beane and Paul DePodesta profit from the irrationality of their competitors, who overvalue athletic attributes like speed and strength which aren’t necessarily effective at winning baseball games. The A’s, instead, select players using a process of rational, scientific, data-based analysis, which is better at predicting their likelihood of succeeding in the major leagues.

A Value-Driven Philosophy

As a cash-strapped club, the Oakland A’s adopt a practice of developing players on their own through the draft and then trading them a few years later when they become free agents, after which such players will be too expensive to retain. After the 2001 season, they lose some major stars—through trades and free agency—whose contracts they are no longer able to afford.

Despite the team’s lack of financial resources, the A’s are remarkably successful on the field under Billy’s leadership. The 2001 A’s finish 102-60. The 2002 iteration of the team goes on to a 103-59 record, good for first place in the American League West Division and second overall in the league, despite having what appears to be an inferior roster.

They achieve this through shrewd, value-driven management of their most important asset: the players. No one on the team is treated as irreplaceable. DePodesta is able to quantify the net runs each player contributes to the team (by adding runs through offense and preventing them through defense). Every action taken by a player has an expected run value.

Taking this a step further, DePodesta calculates that the team will likely need to win 95 games to make the playoffs. To win 95 games, they will need to have a net run differential of approximately +135. And this makes the team’s task a lot clearer. They need to find a combination of players whose net run production will offset the loss of Isringhausen, Damon, and Giambi, plugging in those holes to get the run differential they need.

Assembling the Pieces

The team is simply the sum of its parts. While certain star players obviously contribute more runs than others, their output can be replicated. The production of a Giambi might not be easily replaced by another single player, but it can be replaced by a combination of other players, each of whom can do their part to fill in the gap left by his departure.

They don’t need to find the total package in a new player—they just need to find a fraction of that package, which will form part of the whole when joined with other players. They aren’t looking for the next Giambi, nor, frankly, can they afford to. They need to find the parts of Giambi, which can be obtained for far less.

Isringhausen and Damon had been overvalued players—Isringhausen because he was a closing pitcher (who only came into games once the outcome was already likely decided) and Damon because he had a poor on-base percentage. Thus, Billy is able to trade them off for more than they’re worth or let them walk away in free agency and allow another team to overpay them. The loss of Jason Giambi is tougher, but not impossible, to replace.

The A’s bring in Scott Hatteberg, David Justice, and Jeremy Giambi (Jason’s younger brother). These are players whom most of the rest of the league has written off as inadequate or defective, which, of course, is why the A’s are able to so easily acquire them. Yet they all boast above-average on-base percentages, largely due to their patience at the plate and ability to draw walks.

DePodesta stresses the importance of process over results. By adhering to a sound process, the team is likely to win more games than they lose over the long haul of a 162-game season, even if individual games might be lost due to chance events.

The Trade Deadline

The 2002 trade deadline is on July 31. Billy Beane excels at the trade deadline. Since 1999, his A’s have always performed remarkably better in the second half of the season, after the deadline, than they had in the first half. The A’s organization has quantified the value of every player in their system, as well as every player in the systems of the other teams. Billy’s advantage over his rival GMs is better information: he has a better understanding of true value, which enables them to get more from trades than they give up.

At the trade deadline, weak teams that are no longer in playoff contention are looking to offload their stars, creating a glut in the market which lowers their price. Billy will be able to acquire players that he could never afford at the beginning of the season.

He also uses the trade deadline as an opportunity to get rid of his own players whom he believes are overrated by other GMs. Billy deals the overvalued Carlos Pena to Detroit in exchange for ace pitcher Jeff Weaver and $600,000 in cash. He then trades the pricey Weaver to the Yankees (who think nothing of his $2.6 million salary) in exchange for two excellent prospects and the highly underrated pitcher Ted Lilly. It is a classic Beane trade, trading an inferior player for a superior one, while cutting costs.

Rethinking Pitching

The A’s apply their sabermetric approach to finding pitchers as well as hitters. Instead of valuing pitching velocity for its own sake, Beane and the A’s believe that pitchers ought to be judged solely on their success in making outs, preventing runs from being scored against the team, and contributing to the team’s positive run differential.

Around this time, a new method has been created to better evaluate pitchers—defense-independent pitching statistics (DIPS). DIPS eschews measurements like hits and earned runs against, as they depend too much on fielding to be of much use in judging a pitcher’s performance. Instead, DIPS rates pitchers mainly on the basis of walks, home runs, and strikeouts, aspects of the game for which the pitcher was solely responsible.

One DIPS standout for the A’s is Chad Bradford, a “submariner” pitcher who costs the team a mere $237,000 per year. With his unusual throwing style, Bradford has been overlooked by most teams, but the A’s see nothing but upside in him. Even the White Sox, who had drafted him, attribute his early success with them to mere luck—good major league pitchers simply don’t throw the way Bradford does. But Billy Beane rejects this subjective and superficial discounting of what is clearly a talented player, and he acquires him from the White Sox before the 2001 season for nothing more than the price of a minor league catcher.

Final Results

After Billy’s wheeling and dealing at the trade deadline, the A’s are reborn, going on to qualify for the playoffs and win the AL West Division with a 2002 regular season record of 103-59—just behind the Yankees for the best record in all of Major League Baseball. Their hot streak after the deadline includes what was then an American League-record 20-game winning streak. Their strategy of investing in unglamorous on-base percentage heroes rather than flashy home run hitters yields great results on the field.

The team’s success is a testament to their value investment strategy in building the team and a stunning rebuke to decades of conventional wisdom about what makes a winning ballclub. Still, many baseball traditionalists, particularly former player-turned-TV-commentator Joe Morgan, appear to be actively rooting against the A’s in the playoffs. They seem to not so much disagree with Billy’s ideas about how to win baseball games as to be outright offended by them. Winning games without flashy home run sluggers or lighting-speed pitchers, to these keepers of baseball’s conventional wisdom, is a violation of the natural order of things, a perversion of the noble tradition and spirit of America’s national pastime. Morgan is part of an insider’s club of pundits, writers, scouts, and ex-players, which never seems to face accountability for its failures. They are a social club that values loyalty over competence.

Unfortunately, the A’s fall in the first round of the playoffs, losing three games to two in a best-of-five divisional series to the Minnesota Twins. Although the naysayers hold this up as proof that sabermetrics and on-base percentage are not what makes a successful baseball team, DePodesta attributes the playoff failure to the small sample sizes of the playoffs, in which random on-field events have an outsized impact on the outcome of a series. He notes that during the regular season, the A’s allowed an average of only 4 runs per game, but that they allowed 5.4 during the series against the Twins, largely due to two bad games by pitcher Tim Hudson.

After the season, the Boston Red Sox offer Billy a five-year, $12.5 million contract to take the GM job in Boston, but Billy declines. Out of high school, he had made the decision to sign an entry-level contract with the Mets. It was the only decision he had ever made for money—and it had been the worst decision of his life. He vows that he will never do that again.

Billy has finally fulfilled his destiny as a winner, but in the front office rather than on the field. In his 20+ year journey through the world of professional baseball, Billy has finally proved his value—and there is no putting a price on that.