Is offense worth more than defense and pitching? Marginal revenue product and revenue sharing in major league baseball

Ehrlich, Justin; Potter, Joel

doi:10.1108/mf-04-2020-0210

Cited by 4 publications

(5 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…productivity to a greater degree, where offensive production in baseball is more salient than defensive production. Moreover, recent studies from Ehrlich and Potter (2020) and from Solow and Krautmann (2020) generate results consistent with herd behavior among MLB executives. That is, MLB executives may observe contracts and treat them as a benchmark for future contract valuations.…”

Section: Discussionsupporting

confidence: 58%

Does a salary premium exist for offensive output in Major League Baseball?

Ehrlich¹,

Perline

Potter

et al. 2020

Self Cite

View full text Add to dashboard Cite

PurposeIn baseball, a run scored on offense carries the same on-field (win) value as does a run prevented on defense. Both outcomes bear the same score margin implication. This presumption of unit equality is implicit in the Wins Above Replacement (WAR) measure, which treats units of offensive WAR (oWAR) and units of defensive WAR (dWAR) as perfectly substitutable toward win production. The purpose of this paper is to ask whether the salaries of Major League Baseball (MLB) players reveal such an equal valuation among MLB teams.Design/methodology/approachThe authors examine the relationship between offensive output, defensive output and subsequent salary from free agency in MLB using a set of log-linear OLS, fixed effects regression specifications.FindingsIn general, estimated annual salary from free agency increases significantly and substantially with unit increases in a player's (prior season) wins above replacement WAR. Across specifications, the authors estimate a 42.5–43.4% increase in salary for year t for each additional unit of WAR in year t−1. The authors disaggregate WAR into offensive and defensive components (oWAR and dWAR) and estimate a 52.4–53.3 (4.8–7.2)% increase in salary for each additional unit of oWAR (dWAR).Originality/valueThe efficiency of the baseball labor market has been studied previously with mixed results. The novelty of the present study is its treatment of inputs not as positions or individual players but as the underlying offensive and defensive win production of players. The authors estimate free agency salary returns to (contract season) oWAR and dWAR in MLB to establish whether (to what extent) a salary premium for offensive output exists within MLB.

show abstract

Section: Discussionsupporting

confidence: 58%

Does a salary premium exist for offensive output in Major League Baseball?

Ehrlich¹,

Perline

Potter

et al. 2020

Self Cite

View full text Add to dashboard Cite

show abstract

“…(2011) find that offense and defense are equally important in terms of winning in the National Football League. Ehrlich and Potter (2021) demonstrate that MLB fans do not have a preference for offense.…”

Section: Notesmentioning

confidence: 84%

“…In a couple of papers examining on field performance, Gambarelli et al (2019) investigate the decision of soccer coaches in choosing an "offensive" or "defensive" strategy in soccer, while The relative value of NBA production find that offense and defense are equally important in terms of winning in the National Football League. Ehrlich and Potter (2021) demonstrate that MLB fans do not have a preference for offense.…”

Section: Revenue Prior To Revenue Sharingmentioning

confidence: 84%

“…Thus, we model pre-sharing revenue by assuming the NBA operates a straight 50% pool plan. This approach is similar to the Major League Baseball pre-revenue sharing models of Rockerbie and Easton (2018) and Ehrlich and Potter (2021). First, we note that for the league:where RiPre is team i 's revenue (pre-sharing) in year t and Ri is team i 's revenue (post-sharing).…”

Section: Revenue Prior To Revenue Sharingmentioning

confidence: 99%

See 1 more Smart Citation

“Should offensively oriented players receive a salary premium in the national basketball association?”

Potter

Ehrlich

2022

View full text Add to dashboard Cite

PurposeSince recent research has found that offensively oriented players receive a salary premium, the current study recognizes this observed premium might exist because offense is worth more in terms of revenue generation. Given the popular sports saying, “Offense sells tickets, defense wins championships,” the authors quantify whether offense really does sell more “tickets” than defense in the NBA.Design/methodology/approachUsing NBA team revenue data as well as team offensive and defensive win shares, the authors estimate several econometric specifications to test if teams generate more revenue for offensive wins compared to defensive wins. The authors also employ a multi-year free agency study to identify if NBA players receive more compensation for offensive production than they do for defensive production.FindingsThe authors find no statistical difference in revenue generation from offense compared to defense. The authors confirm these findings both before and after revenue sharing. These results are also robust to alternative specifications. Therefore, the authors conclude that fans do not prefer offense to defense in terms of their spending. Contrary to previous research, the authors find no evidence of an offensive premium paid to NBA players.Originality/valueBased on their findings, offensively oriented players should not receive a salary premium. The clear implication for team decision makers is that offensive production should be compensated at a similar rate as defensive production. Since the authors do not find evidence of an offensive premium for offensive production, their research suggests a likely labor market equilibrium in the NBA for both profit-maximizing and win-maximizing teams.

show abstract

“…그러나, 여전히 지속적인 흑자를 내는 프로야구단은 없으며, 지출의 약 MLB에서도 효율성에 대한 연구가 진행되고 있는데, 선수연봉과 구단운영비를 이용하여 구단수익과 성적에 대한 효율성을 DEA모형을 통해 측정한 경우가 있다[11]. 또한, MLB에서도 수비능력보다 공격능력이 우수한 선수들의 연봉이 더 높고, 구단 공수능력의 한계수입생산을 산출하면 한계수입생산은 공격능력이 낮고 수비능력이 더 높다는 연구결과도 있다[12].프로야구리그 효율성을 측정하기 위해 DEA뿐만 아니라 다양한 연구방법이 시도되었다. 초기에는세이버메트릭스 지수에 대한 주성분분석을 통해 타자를 4개의 등급으로 분류하여 타격능력을 측정하였다[13].…”

unclassified

A Study on the Effect of Korean Professional Baseball Players’ Defensive Contribution on Team Performance

Jeong¹,

Kim²,

Yang³

2022

APJCRI

View full text Add to dashboard Cite

The purpose of this study is to examine the effect of Korean professional baseball players' defensive contribution on position and team performance. In other words, the purpose of this study is to present timely implications for the professional baseball teams and the league by measuring the player's effectiveness considering the defensive contribution of baseball players and examining the relationship between each position and the team performance. To this end, we derived defensive efficiency considering efficiency and defensive contribution from 109 players who played 144 at-bats in the 2019 season. According to the analysis results, (1) the efficiency and defensive efficiency of first base, which is the traditional slugger position, both were low, and the catcher and shortstop had the highest defensive efficiency considering the contribution of defense. (2) The correlation between defensive efficiency and team performance was confirmed, and the top 5 teams with high defensive efficiency ranked in the top 5. As a result of this study, it is necessary for professional baseball teams to secure excellent players that are helpful for team performance by using various efficiency indicators suitable for their position in terms of game operation and player management. In addition, it is necessary to evaluate the value of players through efficiency indicators suitable for the characteristics of the position, suggesting that in order to establish a stable profit structure of the club and to advance the Korean professional baseball league. It is necessary to develop and collect and utilize not only offensive data but also defensive data items.

show abstract

Is offense worth more than defense and pitching? Marginal revenue product and revenue sharing in major league baseball

Cited by 4 publications

References 16 publications

Does a salary premium exist for offensive output in Major League Baseball?

Does a salary premium exist for offensive output in Major League Baseball?

“Should offensively oriented players receive a salary premium in the national basketball association?”

A Study on the Effect of Korean Professional Baseball Players’ Defensive Contribution on Team Performance

Contact Info

Product

Resources

About