Thursday, March 25, 2010

Theo Epstein, CPA

Before the conclusion of the Death of Sabermetrics Series, a few things:

1. The baseball season starts in ten nights, which is pretty exciting. So tonight is the last night of offseason coverage. Next week we will be doing some predictions, and then the season starts. We'll have AL East predictions first, then Rest of Baseball predictions, and Friday we will have some over/unders. So don't miss those. And thank you very much for reading, commenting, and supporting How Youz Doin Baseball in its fourth winter.

2. A fantasy baseball special on television is unacceptable behavior. Especially one with Aaron Boone. This was on ESPN right after an NFL Draft special literally 30 days before the freaking draft. This is what I like to call punting your TV coverage when you're up against March Madness.

Without further ado...

This much is true. I once looked at a company's income statement, an accounting document that shows the company's revenue and expenses. I had been entering some of their expenses, and the employees totally exploited the company in reimbursement checks for travel and meal expenses. Seriously, have the common courtesy for your employer by 1) getting Aquafina water at the airport instead of Fiji water or 2) not submitting a $4 expense report for your water. One employee literally charged a $250 meal with his parents in California to the company. His parents were not their client. Whatever, that's not my point.

As many companies did in this recession, this company experienced significant layoffs, letting go of about 40% of their staff. After the layoffs, I took a look at their month-by-month numbers on a spreadsheet. Despite only having 60% of their staff still working, the company was still running about 90% of their meals & entertainment expenses.

If Theo Epstein were to take a look at this series of income statments, he might be able to diagnose what's wrong with the company's bottom line. Theo enjoys just looking at one column of the stat sheet, and condescendingly scoffs at people who like to look at the bigger picture, taking into account things like RBIs. So it's very likely that the Red Sox' general manger would take a look at the meals & entertainment expense account pre-layoff and post-layoff, and make the conclusion that the company is struggling because they are running wild with their meals at the Capital Grille.

In his self-righteous quest to prove that he is the smartest person in baseball, Theo Epstein may walk into the CFO's office with a megaphone at his mouth, talking about how much of a travesty this widespread abuse of the expense reports is. He'd call for changes in the employee handbook, he'd mandate using the red-eye flights like Colby College recently did for their spring break trips, and he'd give employees meal stipends instead of throw-it-in-the-bag cards.

If he saw a salesman at this company leave the office for a lunch meeting, he'd stop them at the door, smirk, and say "I thought you were gonna ask me about you having the second-highest expense report of all company salesmen at this company." If the salesman were to reply, citing his past sales performance, maybe the Boy Wonder would say something along the lines of "You guys put way too much time looking into numbers like commissions, salaries, and sales revenue, but in my office we don't even pay attention to those numbers."

With this arrogance and smugness, this Theo-retical character might overlook what may have been the real problem with the company both before and after the layoffs: They budgeted monthly revenue at roughly $300,000. Their actual monthly revenue for two out of four months after the layoff was $0.00.

Have a great weekend. Ten more days.

12 comments:

Anonymous said...

DV,

Thoroughly enjoyed this post. Great job. Thanks for your efforts on the blog the past four years.

Pat's a staino so I won't thank him.

bandi

jason said...

is the company supposed to represent the sox? i think im too tired to be reading this

Anonymous said...

DV

I like the post. Anytime you can overlook the big picture by honing in on one stat, you gotta do it.

Also, big question here because I'm presuming it's going to be a slow posting day--what does everyone think about fouling when you're up three points at the end of the game? After last night's Xavier/Kansas State battle it probably could use some discussion.

--the Gunn

The GM said...

Bandi,

Thanks.

Jason,

Check Gunn's comment. It's about "overlooking the big picture by honing in on one stat." Doing this is just as bad as valuing RBIs as the end-all, be-all.

Gunn,

Last night is the textbook example of why you don't do it. Just play good defense and dare the other team to hit a 3. Seeing that even the best 3-point shooters only hit it 40% of the time, there's a 60% chance the game is over. The other 40%, you still have a shot to win in OT.

jason said...

Gunn,
I just know that even with that foul, the player that shot those free throws had to have ice in his veins to hit all three with the game on the line, I would almost say that there had to have been a 50% chance that an above average player would miss at least one of those shots. Either way he was fouled by the first guy and if that was called fouling works in that situation. Maybe its an acceptable thing to do if your team has practiced it before and understands what should and shouldnt be done.

Anonymous said...

Gunn,

Just because you average 4 yards a carry doesn't mean you can just run the football every play. If you do that the defense will adjust their scheme thus making your running plays less and less effective.

PF said...

Gunn -

Given this a lot of thought ecer since january 2001 when caron butler hit a 3 at the buzzer to force overtime with st. john's at uconn, a game uconn would ultimately win and a loss that reallly hurt the johnnies' season. If I was a coach my rule would be anytime there is more than 4-5 seconds left, meaning it's nowhere near an immediate shot situation, you foul. Basically, as long as I don't think the chances are good of me fouling in the act (under 4-5 seconds those chances go up big), I'm fouling, making them make free throws and taking away a tie possibility. And I don't want to understate the import of making them make free throws. If they miss just one, now you have a chance to make 2 and effectively ice the game. Back to the foul itself, if there is more than my 4-5 second benchmark left, it becomes very difficult for a player with the ball in his hands to predict when the foul is going to be given, if at all. And one thing refs have been pretty good at is not giving shooting fouls to after the whistle toss ups to try and get a shooting foul. You almost never see it happen. Essentially, as long as I can minimize the risk of a shooting foul to near zero, I'm pro fouling. Dv talks about the percentages on the nom fouling side, and he's correct with the numbers and the conclusions he draws. But he fails to consider if the numbers are even more appealing on the other side. If I can get a foul up 3 with 6ish seconds left, now I'm forcing a team to make 2 and give me the ball back with not a lot of time left, foul (taking a few more ticks off the clock), and then go the length of the court when they get the ball back. If I have a team that can't make free throws or doesn't take care of the basketball increasing the risks of not making free throws and turning the ball over in the closing seconds, maybe I reconsider. But if I have a fundamentally sound team I like my chances that way. I'm not sure if the odds are in fact better than the solid ones dv gave for not fouling, but I think its worth considering. I'd be interested to hear what you guys think.

TimC said...

Regarding the foul at the end of regulation, I think it is a very good strategy and I think teams are more often burned by not fouling than they are by fouling. That said, here are some scattered thoughts about last night and the strategy in general.

-The two vital components of the strategy from the offense's point of view is that the guy hit the first foul shot and somehow miss the second so his team can get the rebound. If the first foul shot is missed, they need to rebound, kick it out, and hit a three. I'm sure, statistically, the odds favor the offense if they can get a 40% or even 30% shooter a look from deep. Maybe Theo has the numbers.

-Interestingly, in the past two weeks two high-profile games have gone to OT with the fouling team blowing the game using the strategy. Last night (I'll get to that in a second) and the SEC Championship, where Miss St fouled and could not rebound the intentional miss. Miss St lost, K-St recovered.

-Although the strategy is sound in my opinion, K-St blew it on two levels. First, they need to alert the officials that they are fouling. Late in games, the officials will tend to let things go. Plus, it HURTS Xavier to call a touch foul in the backcourt because they do not get a three-point look. The coach MUST talk to the official. Bad move on his part to not do so.

Second, if the offensive player keeps dribbling at the same speed, the foul failed. I do not care what Len Elmore thought; if the strategy is to foul, knock him on his ass.

PF said...

Also, I'm sitting in a sports law symposium at school, and the international scouting coordinator for the red sox is one of the panelists on one of the topics. Fascinating stuff, and I don't care what you guys say about that front office, this guy is sharp.

the gm at work said...

PF,

I'm not saying the Red Sox' FO is not sharp. Obviously, they are. Their scouting of players who are not major league baseball players yet could be the best in the league, both in terms of American amateurs and international free agents. You deny that, and you are wrong.

What my beef is would be their evaluation of major league baseball players, specifically in the free agent market. All they've done is make the right moves everywhere else and all the wrong moves with current major leaguers. That and the overarching arrogance. These guys really do think they're the smartest people in baseball, which is not an appealing or productive way of conducting yourself. Especially if you've sucked as hard as you have in the free agent market over the last, oh, six years.

PF said...

Gm -

That was meant to be more of a light hearted comment to say how impressed I was this individual. I understand where your beefs are, and I also understand where you are complimentary of them.

Anonymous said...

PF

Being in the symposium you're in with the panelists it has is about all you need to know about the difference between Fordham Law and Maine Law. At Maine Law we'd have an agricultural seminar with a potato farmer scribbling on the board wearing a straw hat.

PF/DV/Tim/Jason

My take on the fouling thing is all about time and what my team is about. If there's five seconds or less you really can't foul because the shot could be going up at any time. If there's more time, then you have to evaluate your own team before you make any decisions. In all honesty, my gut tells me not to foul (per DV's position). But if your team takes care of the ball and makes free throws AND if it's something you practice, then yeah, you probably should foul because the percentages would benefit you.

Bandi

Any time you can reference Mike King's most infamous moment, you have to do it.

Everybody dominate this weekend.

--the Gunn