Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service today.
Ground Control, DiamondView, Carmine, Red Bird Dog. These aren't my favorite blues records, nor are they in anyway related to David Bowie (sorry to disappoint). They describe something much bigger. A revolution is taking place in America's pastime, and it's happening under the noses of many fans.
The new front office model
Evan Drellich of the Houston Chronicle penned a wonderful article on professional baseball's new front office model earlier this week. He focused on the Houston Astros' usage of Ground Control, a private database that tracks everything from historical stats to scouting schedules. Drellich reveals the St. Louis Cardinals have built their own system, Red Bird Dog; both were likely inspired by the Cleveland Indians' DiamondView, and Carmine, which hails from Boston. Even the so-called "lovable losers," the Chicago Cubs, were rumored to be working on a database with Bloomberg Sports a couple of years ago.
Chances are you've heard of Billy Beane and the Oakland A's tale of statistical wizardry. But as Drellich points out, Ground Control and other in-house creations are being used by everyone from the GM to head scouts to make decisions on a daily basis. He writes: "Baseball, like so much of the business world, is in the midst of the age of proprietary data. That encompasses much more than just the advanced statistics the book "Moneyball" popularized with its release a decade ago." The average MLB franchise is worth more than $700 million, according to Forbes, and like most multi-million dollar businesses, the more information the better.
How much does database development cost, and does it translate to wins? These questions are tougher to answer. The five teams listed above couldn't be a more representative sample of Major League success. The Astros and Cubs averaged over 100 losses last season, the Indians were a Wild Card team, and the Red Sox and Cardinals both appeared in the most recent World Series.
A 2012 study from FanGraphs estimated at that time that 13 of the MLB's 30 teams used sabermetrics in all three aspects of the game: scouting, statistics, and business (this last category includes contracts, media, and stadium deals). Nearly an equal amount of clubs were classified as "old school." It's no secret the Philadelphia Phillies, for example, rely less on the stat book than some of their peers.
When it comes to database development costs, though, those are essentially impossible to pinpoint unless you're inside an MLB front office. Just as I discussed in my interview with STATS last week, analytics may, in some cases, represent a cheaper way to get better on the field than simply buying an expensive free agent. Most sabermetricians peg the value of a win between $3 million and $7 million in contract dollars. And given the average cost of a Bloomberg Sports subscription, six, even seven figures to build an in-house analytical system might be a more reasonable investment, than say, a five-year $100 million contract for a single player.
The next generation
Up to this point, most teams willing to use analytics have exhausted the sabermetrics glossary in an attempt to gain an edge. WAR, OPS-plus, PECOTA, and even plate discipline metrics are now everyday phrases, at least for baseball nuts. So what's the next generation of statistics? Fielding ability, and more specifically, route efficiency. MLB Advanced Media unveiled a new defensive player tracking system at this month's MIT Sloan Sports Analytics Conference.
As MLB.com's Mark Newman wrote after the reveal;
... on a brilliant, game-saving diving catch by an outfielder, this new system will let us understand what created that outcome. Was it the quickness of his first step, his acceleration? Was it his initial positioning? What if the pitcher had thrown a different pitch? Everything will be connected for the first time, providing a tool for answers to questions like this and more."
Before, analysts were limited to imperfect stats like Ultimate Zone Rating and Defensive Runs Saved, which ignore most of the factors Newman mentions. With eventual plans to roll out the system, which relies on a series of cameras, in every ballpark, MLBAM should add yet another dimension to the information collected by Ground Control, Carmine, and the rest of baseball's databases.
It remains to be seen if this strategy leads to wins -- it will take more teams and a longer time frame before there's any definitive proof. Yet, the blueprint is set, and one thing appears certain: The technology isn't going away any time soon.
Opening Day is almost here
Baseball season is right around the corner, and just like the gap between David Ortiz and every other designated hitter, there's a major difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.