Monday, April 27, 2009

Caffeine Jihads, Barney Rubble & Monetizing Ethics  

"You can have money piled to the ceiling but the size of your funeral is still going to depend on the weather."
--Chuck Tanner

Baseball attracts as many deranged and bad ideas as non-baseball business...it's just rare in baseball when one sticks. When one does, it's more often for a short-term financial benefit (for example, collusion in boycotting individual or whole cadres of talent, or having interleague games and stats count as league games and stats) than for purely emotional and fact-challenged reasons.

Which is why I'm skeptical that the proposal of a pair of distinguished, bright college professors (one of Genetics, one of Law) is going to get much support from either team owners or baseball fans. It's what I call a Caffeine Jihad, a Captain Ahab-like crusade about a side issue that arises from feelings, and gets attention out of proportion to its significance. This odd proposal appeared in the San Francisco Chronicle, an op-ed page item under the title, Can pro baseball save itself? 

The title itself is laughable (I suspect the paper's copy desk, not the authors, named it), and it gets more Wackorama from there. But before I share its innovative and deranged concept with you, I need to describe what a Caffeine Jihad is.

I once did work for a Northern California high-tech company whose relentlessly-unimaginative Finance head-man was relentless in his pursuit of...the contents of the company's refrigerators. He was a veritable Captain Ahab on the hunt for recreational beverages. He knew the company really needed to tighten its expenses...the Diseconomies of Scale meant the trajectory of growth-rate and the ability to acquire exclusively A or  A- talent was coming to an end, and so outrageously high margins were inevitably in decline and if the everyone didn't take action before that started, it could get ugly. This was a company where people generally didn't look to waste money, but no one ever said "no" to any reasonable-looking expense.

But he became obsessed with the company's free high-end coffee policy, a major cheap perk (pun intended) that many people appreciated and took advantage of (and this is important: were made more productive by), and the rest saw as a symbolic proffering of the company's quality image. The firm was in the same home-town as Peets Coffee & Tea (if you're not familiar with Peets, it's in many ways the parent that generated Starbucks), so thinking buy-local and buy-quality, they stocked the kitchens with Peets. It was cheap relative to the company's investment in talent, and had those two benefits of the caffeine stimulating productivity and broadcasting the cachet of official generosity.

So rather than attack the habit of not ever saying "no" to any reasonable-looking expense, a serious, challenging and long-term change effort, Finance Man came to see the simpler free Peets as the issue. As his idea got no traction, it became more and more a Caffeine Jihad for him, his emotional stake more obviously out of scope. Funkily enough, his plan was to both downgrade the beans to something like Folgers, and to ask people to ante up some change for the cup (a heinous combo, because from getting good stuff for free, they weren't getting good stuff for pay or bad stuff for free, but bad stuff for pay).

He ultimately won his holy war, and with great cost to tactical morale and some strategic talent. He waited way too long to take on the major "just say yes to reasonable-sounding expenses" issue, and when he did, he'd already used up all his credibility and favours on the Caffeine Jihad. Instead of a challenging but viable transition to a new set of comfortable behaviors, the firm lurched and fought and sputtered like a damp July 4th roman candle.

Rine & Sugarman's Chronicle op-ed proposal was so deranged because, I believe, it resulted from side-issues on which the the advocates have allowed their emotions to trump both facts and common sense. The title itself (again, I'm not at all confident the authors devised it) is a big warning sign, anchored off an idea that both defies common sense & for which they present no data to support. 

How much does the sport or the business need saving? Baseball's paid attendance last year was roughly 78 million fans, about 12% more than in 1993, before the 1994 and 1995 labor actions. The leagues expanded (a pair of teams) since then; if you remove those two franchises' attendance, it's still 6% higher. The median baseball franchise appreciated in value 2% last year, if you can believe Forbes. If the magazine is correct, that's a stunning gain in the face of North America's overall GDP sag. Beyond North America, there's somewhat more significant world-wide investment on the endeavor, most clearly discernable from the World Baseball Classic, an event that seems to have caught on & that's somewhat popular in a lot of different places that had no serious baseball culture two decades ago. Television viewership of baseball is down roughly in proportion to the decline of TV viewership in general.

Perhaps the headline is aimed at Baseball's soul being saved, a faith-based salvation. But if the proposal is aimed at the soul, it misses the mark because its methods are totally aimed at holding hostage/in trust players' pay. The author's aim, in the authors' own words:

Require all players to place a substantial share of their baseball earnings in a trust they can access at the end of their careers if they have been clean throughout.

And really, it should be rephrased "they can access at the end of their careers if they can prove they have been clean throughout". False positives (test finds substance that wasn't actually there or was something else mis-recognized) are common in testing, not to mention false negatives (test results that miss substance abusers' chemical residues). I'm guessing the authors know as well as we do the tests are imperfect, but they think their sanction is so worthwhile, that it doesn't matter.

Anabolic steroids present baseball with problems at multiple levels. The physical damage that players do to themselves may be the least of it - the just reward of those who cheat. But the damage to others is much deeper. Fans have become disgusted by performance records that owe more to organic chemistry than to talent, by psychodramas of tainted stars explaining why they are not responsible for their actions, and by the reluctance of the commissioner, owners and union to deal with this issue honestly. Most of all, we lament the message this situation sends to our youth and to unjuiced teammates competing for a place on a team.

In this part of their argument, they are talking about anabolic steroids only, ignoring the bulk of the performance-enhancing supplement use: human growth hormone (HGH) and various forms of stimulants (coffee, which no one is currently arguing should be banned, and amphetamines and related compounds, which are broadly vilified and explicitly banned). I'm a little disturbed by their suggestion that death-by-cancer or liver failure is a just reward for steroid use (I hate José Canseco & Roger Clemens, but the death penalty still seems an over the top response to me). ¿Again, though, who are these "fans" the authors cite? I'm sure there are many, but they don't constitute much of a sub-population if recent attendance or purchase of ridiculously-expensive logowear and trinkets are indicators (and they are). 

ASIDE: I'll bet a nickel that if they took a fair vote on actual fan opinion on performance-enhancing supplements, one-ticket, one-vote, among major league baseball game attendees, the winner by far would be "Uncommitted", with status quo coming in second and strong action to suppress use third (and only coming in third because there was no remainin' option to rank ahead of it.) My very informal asking-around among people who are actual fans indicates very few consider supplements a particularly- important issue and  among that minority, even fewer who want to see some Department of Homeland Purity police action to deal with it. This isn't to argue nothing should be done, just that the "fans are outraged" argument is brittle and unfounded.

We must have no shortage of sympathy for the "unjuiced teammates competing for a place on the team". That quandary is just brutal, and it's one we all face Beyond Baseball, too. From the stock analyst tempted to ignore a publicly-traded corporation's shifty accounting accounting practices to get their business (and pass the risk on to the investors to whom she "owes" the truth), to the mortgage broker who suspects the buyer he's selling to might not be able to afford the closing price but doesn't want to miss his quota (and perhaps, as a result, his job), to the University teacher looking for tenure and being lured to teach and write about topics they find marginal-but-glitzy rather than what they most care about...we all face this zero-sum game. 

Require that a substantial share of baseball salaries - say two-thirds of earnings above the league minimum guaranteed by the collective bargaining agreement - go into a trust for the duration of the player's career. The trust would pay taxes and would be managed by a professional organization of the sort that administers retirement accounts.

Great. I love to see they trust Lehman Brothers & Merrill Lynch.

Apart from any other ongoing drug-testing regimen, urine samples would be regularly collected from players and securely stored. Upon retiring from baseball, those samples would be analyzed by the most advanced methods available. These methods improve every year, and it would be a bad bet that tomorrow's technology will not detect yesterday's steroids.

If a player's stored samples are clean, he would get everything in his trust and remove any suspicion about his honesty. If the samples prove he cheated, after appropriate retesting and inevitable challenges, his share would be forfeited. Moreover, records set during a player's career would initially be "provisional" and "official" only upon successful completion of testing.

Holy Cow, as a sober Harry Caray might have said (a totally-blitzed Harry Carey might have invented this, but I doubt it). The record book (already shaky because of interleague play where you can win, for example, an American League Homer 1st by dint of plunking more taters against National League teams, or get into the National League playoffs because you had a better record against American League teams than a National League rival who had a better record against National League teams...and yes, that's already happened) becomes a veritable Soviet Encyclopedia. All the all-time records become conditional, with differential enforcement based on BT (before testing) and DT (during testing). If, for example, Barney Rubble led the league in batting average this year, and retired in 2021, the "record book" would list a conditional leader for 12 years, one who might remain or disappear after his retirement (the way Nikita Khrushchev and his drugis made Joe Stalin's name and face and eponymous Grad disappear after the old bastard bit the big one [Volgograd, in case yer interested]). The need to chronically update all this "history" conditional on the approval of external, politicized sources, while a delight for fans with OCD or 12-year old boys with nothing better to do smacks exactly of Soviet chronic revisions.

If cheaters were discovered, forfeited assets would be distributed equitably. A fraction could be returned to team owners to recognize that their investment was damaged by cheating, to the trusts of the cheater's teammates, and to youth baseball programs in the communities where the player served. Agents not parties to the abuse would keep their fees.

Good. So an owner can benefit thrice from hiring a juicer: First, by bringing more fans to spend $$ to watch him play "better", potentially improving the team enough to play in the playoffs and sell tickets to additional events, and then finally by making back (¿with interest? Not mentioned, though since this financial-instrument thang sounds like a Roth IRA, I suspect they might want to insulate the players from hyper-inflation...though if they don't care if the juicers croak, maybe they don't care if the non-juicers take an inflation hit) a piece of their labor costs. And players' agents get to keep their take if they can maintain deniability. Owners win, agents win (if we buy into the authors' suspicion that juicers make more money, then we need to assume an agent's take of a higher-paid career brings higher fees), players, as a composite, lose. I do like the youth baseball angle. ¿How about we just require players of all pro sports to tithe or so for youth baseball? ¿Would players hold Tea Parties to protest?

There are so many problems with this proposal, I can't (for your benefit, I won't) add another 3,000 words to deal with it all.

But let's answer some questions.

1. Is the use of performance-enhancing supplements by baseball players a "problem" we should invest cycles in fixing?
I'm not sure supplements are even "a problem". Could they be, overall, a benefit to performance and the enjoyment many fans get from seeing their old favorites get extended careers? I'm pretty sure the guys who took the greenies would tell you they performed better, and that helped their team. I'm pretty sure it's not a one-sided argument on either side.

Let's presume it's a problem. Is it worth investing cycles in? Given the universality of this form of cheating, the hundreds of billions of dollars that have been secretly borrowed or stolen and the hundreds of thousands of jobs that have been liquidated in this country and shipped overseas for performance advantages that have proven to be terribly cancerous to the macro-organism we call "the economy", is sports where we want to apply this first? And if sports, why not concurrently propose this for the NFL, where supplement-based physical re-sizing is close to universal and where the union is already busted?

I think sports isn't a great place to start. If we're going to do this to Baseball players, let's do it to public officials (keep your campaign promises or forfeit your pension and a percentage of your campaign contributions?), military officers (win your campaigns or lose your PX privileges?), college profs (graduates know their subjects or lose tenure?)..

2. In Baseball, which has a more than a century of deeply-imbued tradition of cheating to increase your team's chances of winning, is this the place to draw the line?.
Everything from scouting, to heckling, to sign-stealing, to intentionally slamming into the catcher to knock the ball loose on a play at the plate, to groundskeepers tweaking the field is designed to use some kind of unfairness, in many cases outright rule-breaking to give one team an advantage. This is different, btw, from cheating to hurt one's team's chances of winning (game-fixing). Some will argue it's the opposite of that.

It's accepted in baseball that the team will cheat to benefit their chances of winning in many ways. Hmmm, I can see both sides of this one.

3. Does Economics-based thinking hold any water outside of textbooks?

This op-ed is an example of the incredibly goofy lengths to which people who think like economists (a group of people self-selected to believe that everything has a monetary value, and further one that can be measured) will go to in their belief money drives behavior.

I can only think the authors forgot their own sandlot days, how much they wanted to play and do well and win if at all possible. I'm only guessing here, but I suspect that when Rine & Sugarman played sandlot or little league, if another kid had offered them money to perform less well, they would have turned it down. I'm sure most pro baseball players would, too, because the game is one of the many things that makes us do things that defy what the self-selected bias of economists imagine is an unavoidable gravitational field that pulls us towards money.

I went to Sugarman's site and scanned the papers he'd chosen to share (a lot of brain-food there). A few of his papers (they wouldn't load into my PDF reader, so I didn't have the pleasure of readin' them), look from the titles as though some of his thinking is in using money sanctions to get manufacturers and health care providers to improve product safety and performance. If so, bravo; I think that's a very good application of the kind of thinking the profs have invested in this sanction idea for Marvin Benard and his henchfolk. But as a rule, people in manufacturing and healthcare administration really care about money a lot; for the majority of baseball players, it's not the main consideration (that is, if you offered major league ballplayers a 15% raise to work in an office or as a casino greeter or own a small business, the majority would decline your offer).

And that's where, IMNSHO, I think Rine & Sugarman came way off the tracks with this proposal, that is, believing that money is a good way to manipulate ballplayers.

That belief is an emotional setting, one that I think created this demented proposal. Luckily for Economists & their acolytes, economics is not wholly accountable the way Baseball is.

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