Who is the smartest man in baseball? Apparently not a sabermetrician, but Russ Ohlendorf. This name my sound familiar. He was a fourth round draft pick by the d-backs and was making great progress through our program when we decided to throw him in a deal to the Yankees, I believe the one that brought us back Randy Johnson in 2006. Flash forward to the this year, and baseball is happening somewhere in Pittsburgh. I have not confirmed this. Ohlendorf is part of a Pirates rotation that includes the likes of Benny Masters, Johnny Martinez, Luke Jackson, and some other names that I made up rather then looking up their rotation. I do know however that Ohlendorf is 5-5 with a mid 4 ERA's, which on any other team would look something like 7-4 with a 3.85 ERA. He's throwing a 95 mph sinker with deadly accuracy and is one of the most promising arms in the NL Central.
So back to his genious. He scored a 798 (one question off a perfect) on his math SAT and graduated Princeton. Then he wrote a 162 page thesis on the MLB draft using advanced statistics and Bill Smith's win-shares. He determined by studying the 12 year careers of every draft pick from 1989-1993 that paying the signing bonus of a draft pick leads to a 60% return over signing a free agent. Basically this means for every player invtested from 89-93, lets say $1 was invested, that player returned $1.60 to your organization the first year, $2.56 the next, and so on. This is remarkable considering the pre-fucked up stock market averaged 6-7% return. There is a great ESPN article somewhere that goes through more detail but I thought I would just summerize it for people who don't actually care.
This leads to an interesting new concept though. What if teams started offering investors shares of a player's productivity. Paying a 4th round draft pick, such as Ohlendorf, will cost a team about $280,000. If the return is so great, presumably, why not invest 10% in to a minor league player, with the promise of such high returns. This could lead to sports brokering and almost like a publically traded entity. Let's say your player makes the majors and banks on a multi-million dollar contract. Well if you invested 10%, the club owes you a cut right? With the huge amount of players and the long term investment of a club, there will certainly be busts, and a lot of them, but it would be something to look in to. Would you risk money on a player if the return before free agency could be $33 million (Jason Giambi)?
