mlb analytics presentation final
TRANSCRIPT
Using Business Analytics to Understand Salary Structure in
Baseball
Seth SalerFURMAN ENGAGED
2014
The Questions• What is the relationship between
payrolls, wins, and other relevant statistics?
• What can sabermetrics tell us about individual players and their salaries?
• Does Major League Baseball need a salary cap? A salary floor?
The Problem
The Problem
The Problem
The Problem
The Problem
The Methods• Multiple Linear Regression• Endogenous variables, exogenous variables,
coefficients
• Clustering• Algorithmically assorting data by similarities
into “clusters”
• Logistic Regression• Predict the outcome of a categorical
dependent
The Data• FanGraphs.com
• BaseballProspectus.com
• Baseball-Reference.com
• BaseballPlayerSalaries.com
• Fathom.info
The Answer: Salary and Wins
The Answer: Individuals
The Answer: Cap or Floor?● “The fear is that in the absence of
salary caps or other regulatory mechanisms, smaller-market teams will be unable to remain competitive.”
Lewis, Michael. "Individual Team Incentives and Managing Competitive Balance in Sports Leagues: An Empirical Analysis of Major League Baseball." Journal of Marketing Research 45.5 (2008): 535-549.
The Future• Solve the issue of multicollinearity
• Separate each season and use the same methods of analysis
• Explore the differential impact of salary floor and cap impositions
• Include variables from Players’ and Owners’ Associations