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My favorite analytics application is sabermetrics.

There is a movie, Moneyball(2011),


based on it too.
Sabermetrics is the empirical analysis of baseball, especially baseball statistics that
measure in-game activity. Sabermetricians collect and summarize the relevant data
from this in-game activity to answer specific questions.
The Origin:
Facing one of the smallest budgets for player salaries of any team in baseball in 2002,
the Oakland As were in a bind. Beane, the teams general manager, was fed up with his
inability to outbid other teams for good players. He reached out to Paul DePodesta, a
Harvard alum with a background in economics who had a knack for baseball statistics.
The two of them used Bill James-style advanced statistics to take a second look at how
the team was scouting talent.
Beane and DePodesta set about mining decades of data on hundreds of individual
players in order to figure out the best strategy for recruiting good players. Their analysis
revealed that baseball scouts were overlooking statistics that could accurately predict
how many runs a player would score. In short, scouts were clueless when it came to
accurately valuing talent.

Drawing from these conclusions, Beane realized that players who scored high on these
overlooked statistics were probably undervalued by the bidding market. He began
seeking out these bargain players, or players who were flying under the radar of other
teams but whose statistics suggested that they would score runs. The As started to win,
even against baseball teams that had much larger budgets. The team became the first
team in over 100 years of American League baseball to win 20 consecutive games.
Since the MLB machine woke up to the power of statistics, the science of player
evaluation and recruiting has changed drastically. For instance, in-game data analysis
has yielded insights about baseball pitchers and their tendencies to throw certain
pitches in certain situations.
The data used:
All teams and the overseeing organization that run the sport collect exhaustive data for
each game. This includes runs scored, bases stolen, catches, strikes, etc. The field is
now much more evolved and the data collection is more exhaustive. A lot of the data is
also available open source if an enthusiast wants to try his luck predicting the outcomes
of a player or game.
Beginning in the 2007 baseball season, the MLB started looking at technology to record
detailed information regarding each pitch that is thrown in a game. This became known
as the PITCHf/x system which is able to record the speed of the pitch, at its release
point and as it crossed the plate, as well as the location and angle of the break of
certain pitches through video cameras.
The Techniques used:

Sabermetrics can be used for multiple purposes, but the most common are evaluating
past performance and predicting future performance to determine a player's
contributions to his team. These may be useful when determining who should win end-
of-the-season awards such as MVP and when determining the value of making a certain
trade.

Most baseball players tend to play a few years in the minor leagues before they are
called up to the major league. The competitive differences coupled with ballpark effects
make the exact comparison of a player's statistics a problem. Sabermetricians have
been able to clear this problem by adjusting the player's minor league statistics, also
known as the Minor-League Equivalency (MLE). Through these adjustments, teams are
able to look at a player's performance in both AA and AAA to determine if he is fit to be
called up to the majors.

The traditional measure of fielding performance is considered to be the fielding


percentage. Though this statistics is able to measure a fielder's success rate when they
field a ball, but it does not take into account the balls that may be out of the player's
reach. This has led sabermetricians to develop other measures for evaluating defense.
One of these measurements is known as Defensive Average, which divides the field into
zones to determine the responsibilities for each fielder. Every ball hit within a fielder's
zone is considered an opportunity for that fielder and if the fielder is able to make a play,
he will be rewarded a credit for the play made.

Range Factor, defensive runs saved, ultimate zone rating,etc are some of the other
measures used to measure player performance.

The decisions that are enhanced:

1. Who to buy and at what price

2. Who should be teamed up with who

3. Which player plays well in home games vs away games

4. Which player plays well against a specific player/team

5. Where to position a certain player in the field, etc


These are just a few of the decisions that are enhanced by following sabermetrics
process. The amount of value added by this is huge when you consider that all this is
happening in a competitive environment where one decision can lead to the change of
the future for the team in the tournament.

Value to firm

1. Contracts : this helps the firm negotiate contracts that helps them know the
exact value the player will create for them. Also the terms of the contract can be
tailormade for each player. All this helps the team stay within budget and be
profitable.

2. Stadiums: the data helps the team negotiate better rates with the sponsors.

3. Media deals: knowing the future value of the players they are in a better
position to sign deals for the short term to get maximum profit from having the
player in the team

4. Utilization: having the right player at the right place is a major criteria for
success and sabermetrics helps in a big way in this regard.