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Does the principle of investment diversification apply to the starting pitching staffs of major league baseball teams?

ABSTRACT: Financial advisors often emphasize asset diversification as a means of limiting losses from investments that perform unexpectedly poorly over a particular time period. One might expect that this perceived wisdom could apply in another high stakes arena-professional baseball-where player salaries comprise a substantial portion of a team's operational costs, year-to-year player performance is highly variable, and injuries can occur at any time. These attributes are particularly true in the case of the starting pitching staffs of professional baseball teams. Accordingly, this study analyzes starting pitcher performance and financial data from all Major League Baseball teams for the period 1985-2016 to determine whether the standard investment advice is applicable in this context, understanding that the time horizon for success for an investor and a baseball team may be distinct. A multiple logistic regression model of playoff qualification probability, based on realized pitcher performance, measures of luck, and starting pitcher staff salary diversification is used to address this question. A further stratification is conducted to determine whether there are differences in strategy for teams with allocated financial resources that are above or below league average. We find that teams with above average resources increase their post-season qualification probability by focusing their salary funds on a relative few starting pitchers rather than diversifying that investment across the staff. Second, we find that pitcher performance must align with that investment in order for the team to have a high qualification probability. Third, the influence of luck is not negligible, but those teams that allocate more overall funds to their pitching are more resilient to bad luck. Thus, poorly resourced teams, who are generally unable to bid for pitchers at the highest salary levels, must adopt alternative strategies to maintain their competitiveness.

SUBMITTER: Roebber PJ

PROVIDER: S-EPMC7806120 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature

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Does the principle of investment diversification apply to the starting pitching staffs of major league baseball teams?

Roebber Paul J PJ

PloS one 20210113 1

Financial advisors often emphasize asset diversification as a means of limiting losses from investments that perform unexpectedly poorly over a particular time period. One might expect that this perceived wisdom could apply in another high stakes arena-professional baseball-where player salaries comprise a substantial portion of a team's operational costs, year-to-year player performance is highly variable, and injuries can occur at any time. These attributes are particularly true in the case of ...[more]

PMID: 33439899

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Project description:The road to professional baseball illustrates the complexity, variability and non-linearity of athlete development, as players may be drafted from various high school, 2 year, or 4 year programs and then placed into extensive minor league systems. The purpose of this study was to identify the different pathways to Major League Baseball (MLB) and explore their influence on career success. Performance and developmental data of 2,291 American-born MLB players who debuted between 1990 and 2010 were collected using baseball-reference.com. Three performance indicators, career games played (GP), age of debut, and wins above replacement (WAR; player's total contributions in wins), were coupled with high school, post-secondary, and Minor League Baseball (MiLB) data. Analyses revealed 17 descriptively different pathways to MLB, which were grouped into three main streams based on the last institution attended before entrance into professional baseball. Overall, 63% of the athletes started their career directly after attending a 4 year higher education institution, 23% after high school, and 14% directly after attending a 2 year institution. Interestingly, 78% of the athletes did not sign or were not selected as high school draft picks. Position players drafted or signed from high school debuted in MLB younger (M = 23.99) and averaged significantly more MiLB GP (M = 909.13) than those drafted or signed from a 2 year (M = 25.67 and 834.41 GP) or 4 year institution (M = 25.95 and 752.33 GP). Pitchers signed or drafted from high school also debuted in MLB younger and played more MiLB games, as well as played in more MLB games than players from a 2 year or 4 year institution, F(8, 3,082) = 31.96, p ? 0.001. No significant differences of WAR were noted in position players or pitchers. Perhaps pitchers who are drafted from high school are afforded more opportunities to succeed, which may be indicative of sunk cost effects. This is conceivable as these players had the highest average GP but did not accrue a higher WAR. Future research may benefit from the consideration of post-secondary and/or high school statistics in combination with draft selection data, which may have important implications for improving talent identification accuracy.

Project description:BackgroundBaseball is one of the most popular boy's youth sports, and there has been a rise in the rates of certain overuse injuries among players. Specialization has been identified as a risk factor for overuse injury in high school athlete populations, but there is little understanding of the prevalence or consequences of sport specialization in Little League baseball players.HypothesisSport specialization will be highly prevalent among Little League baseball players and specialization will be associated with worse throwing arm health.Study designCross-sectional study.Level of evidenceLevel 3.MethodsA total of 246 Little League baseball players (male; N = 241; age, 9.5 ± 1.6 years) between 7 and 12 years old completed an anonymous, online questionnaire with their parent's assistance. The questionnaire consisted of participant demographics and baseball participation information, including sport specialization status and the Youth Throwing Score (YTS), a valid and reliable patient-reported outcome measure for youth baseball players.ResultsOnly 29 (11.8%) players met the criteria for high specialization. Approximately one-third of all players (n = 77; 31.3%) reported participating in baseball year-round or receiving private coaching outside of their league (n = 81; 32.9%). Highly specialized athletes demonstrated worse scores on the YTS on average compared with low-specialization athletes (mean [SE]: 56.9 [1.6] vs 61.1 [1.2]; P = 0.01). Similarly, pitching in the previous year (P < 0.01) or traveling overnight regularly for showcases (P = 0.01) were associated with a worse score on the YTS.ConclusionWhile the prevalence of high sport specialization was low among Little League baseball players, other behaviors associated with specialization such as year-round play and the receiving of private coaching were more common. Highly specialized Little League players demonstrated worse throwing arm health compared with low-specialization players.Clinical relevanceLittle League players and their parents may represent a potential target audience for dissemination campaigns regarding sport specialization.

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Does the principle of investment diversification apply to the starting pitching staffs of major league baseball teams?

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Does the principle of investment diversification apply to the starting pitching staffs of major league baseball teams?

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