I just finished reading Moneyball, which is the story of how Billy Beane, the GM of the Oakland A's, has turned his team into the most fiscally-productive teams in the league (if you look at wins in relation to payroll). The A's have a payroll of $56,596,691, which is the 5th lowest in the league, but they are once again competing for a playoff spot. The Yankees are also competing, but their payroll is $180,322,403 (complete list). The book looks at how two teams with starkly different payrolls can compete on similar levels.

The simple answer is sabermetrics. 1 The link will give you a full explanation, but it is essentially a "mathematical and statistical analysis of baseball records." It suggests that the current method of measuring baseball statistics are flawed. Batting average should not be the best measure of a player's ability to hit. Believers in sabermetrics put their money behind on-base and slugging percentage.2

Essentially, sabermetrics looks at baseball in a rational way. One of the early sections of the book talks about how scouts look for players with "the right face," which to an outsider seems completely absurd. As they did this, Billy Beane and his partner in crime, Paul DePodesta, scoured statistics of college and high school players looking for the right combination. It seems odd that it took about 100 years before someone in baseball decided to look at players rationally.

A good example of putting this theory to work is when the A's lost Jason Giambi to free agency. They knew that replacing him with one player who could produce runs at the same rate would be too expensive, so they looked to find three players who could do the same thing, even if they had other weaknesses (fielding mostly). The A's were able to do this successfully and were able to finish with a better record the next year, despite the loss of their best offensive player.

The book is terribly interesting for people who love sports, baseball, or looking at an irrational market in a totally rational manner. Two bloggers who will love this book are the purveyors of Kottke.org and RBI. Of course, they both probably know about this book already.

I have a question for those who are into sabermetrics: Is a similar approach ever used for other sports or do people believe that the other major sports do a good job of looking at stats?

1 The definitive website on sabermetrics is Baseball Prospectus.

2 For a look at more sabermetric stats, head to ESPN. Definitions are available at the bottom of the page.