The Case for Holding onto Machado and Letting Him Walk

The Orioles do a wonderful job of ignoring multiple problems until they fly up and bite them on the butt.  While the club has done an amazing job taking MacPhail's core and supplementing them with the right players to build a very successful mini-dynasty (that holds only one trophy that was limited to AL East heroics), there have been many glaring issues that they have been unable to resolve.  Pitching depth has been an ever present concern, but that never made Duquette think twice about dealing it out even in the case of Andrew Miller when he really was not needed.  Corner outfield has been a place of need, but the club has done peculiar things such as bringing in Travis Snider at an amazing cost or putting Mark Trumbo out there.  We could go on and on, but we will get to the point of this post.

Manny Machado presented a terribly frustrating problem.  I went into some detail on this last January and noted that right then and there was the time to either extend Machado or trade him.  Neither of those things happened.  This offseason, it appears the Orioles are more aware that Machado is not remaining and something needs to be done about it.  While the interest in Machado is great, his 17.3 MM projected salary and his single remaining year of control have diminished his value.  Based on what I hear, the most any team has offered has been a single top 100 player and a couple lower tier players.

To put this into a more tangible framework, I will use the White Sox as an example here.  Keep in mind, that what I know has nothing to do with the White Sox, so do not take this as a definitive scoop.  A similar White Sox deal would be:

Alec Hansen, RHSP (fringe top 100 prospect, upper minors)
Carson Fulmer, RHSP (Rookie, major concerns)
Jake Burger, 3B (draftee, long road to go)

The above package would likely disappoint folks. To put it in Oriolese, It is like being offered Chorye Spoone, Radhames Liz, and Billy Rowell if it were 2008.  It would be in the neighborhood of a 40 MM value coming back.  That would be on point value for Machado, but not value that you would expect from a club that really, really, really loved. him.  As you can imagine, a package like that can easily go bust and may well not be all that different from what one could expect in a mid-season deal if the Orioles fall out of contention.

A mid-season deal presents some advantages and disadvantages.  On the advantage side, only about 9 MM of Manny's salary will come into play at that point.  While 10 teams right now have some interest in Manny, a lot of that interest in muted by that pricetag.  Halfway into the season and teams may have enough payroll space with ownership approval, have an unflattering contract to hand back, or the Orioles may be more willing to swallow some of the cost.

The cost angle is truly something to consider if you are running the franchise.  Based on the past twenty years, I have identified several "fire sales".  The first one on the board was the Marlins implosion after 1997's World Series and the most recent is the 2012 triumvirate of the Philles, Red Sox, and Marlins all letting their players depart in the winds.  Some other clubs in this data set include the 2000 Orioles, 2007 Twins, and 2011 Astros, just to give you a flavor.  On average, this group saw a decrease of 18% in attendance after trading out significant players the year before.  Best case scenario was that 2008 Twins team where no difference was observed, but most teams saw a drop in the twenties.

For the Orioles, their 2017 attendance was 2.028 million.  An 18% drop would take them to 1.663 million, or a loss of roughly 365,000 tickets.  Using the fan index, each lost ticket is worth around $46 in revenue.  In other words, if Manny Machado departs and the fan base sees this as a fire sale, then the Orioles are projected to lose 16.8 MM in revenue just from fan attendance.  This does not include the current renegotiation of partners with MASN where the loss of a major player like Machado might make those negotiations more contentious.  In other words, this could be a major loss the Orioles' bottom line, which can have long term implication on their ability to spend on future payrolls.

Anyway, a mid-season deal may only fetch the club a few B level prospects, which is what appears to be the current maximum offers if you believe the rumblings.  Or there may be a major push by a club who wants to shove themselves over the top and is willing to pay a boatload for Machado in a way that might be reminiscent of the Aroldis Chapman trade to the Cubs.  There certainly is that potential there.

The downsides are numerous as well.  If the Orioles are sniffing contention, ownership or the front office may be unwilling to throw in the towel.  Think of last year, if the Orioles came back from where they were at the deadline then it would have ranked as a truly historic achievement.  A major problem was that the fan base and maybe the front office saw that they were three games out and thought that was actually very close when, historically, it was not close at all.  That paralysis by appearance would be detrimental to the organization as they would be left with a Qualifying Offer placed on Manny and getting only a draft pick in return.  That draft pick compensation would be the same return if during the first half of the season Machado is lost for the year.

However, that draft pick compensation happens right after the first round, which is a value of around 13 MM.  How much is a pitching prospect like Hansen worth?  15 MM.  So the loss between dealing Machado now and letting him walk is Fulmer and Berger along with potentially losing 17 MM in revenue.  That, in all honesty, is beginning to look like a terrible deal.  Are Fulmer and Berger worth that 17 MM?  Yes, I think they are.   They are probably worth 5-10 MM more than that.  But, it is not much and that 17 MM in lost revenue in 2018?  Well, that may have future impact on club revenue more so than letting Machado walk away for 400 MM some place.

So what should the Orioles do?
Trade Machado last January.

Forecasting Single-Game Attendance

I've explained before how season-long attendance can be forecast with a handful of different variables, all of which relate to the quality of the team. Since the team is the on-field product that fans buy when they attend games, it makes sense that team quality drives attendance. Sure, games are a form of entertainment, but as many Orioles fans can attest, it's a lot more fun to watch a winner.

To continue this practice of forecasting attendance, I decided to take a look at what factors influence single-game attendance at Camden Yards. Perhaps this work would qualify Camden Depot to help the Orioles plan promotional night or concession inventory (always buy 1 extra bobblehead for me, Orioles)!

The features I decided to build my regression on were pretty straightforward:

• Day of week
• Month of year
• Year
• Opening Day
• Day/night game
• Game-time temperature
• Weather condition (rain, sun, overcast, drizzle, or dome)
• Winning percentage (or pythagorean winning percentage)
• Runs per game, for and against
• Current streak type (has the team won or lost the last few games they've played?)
• Games back in the division
• Opponent
• Promotional night
• Kids' promotional night
• Size of promotion/number of items given away
• Family night/field trip days (kids run the bases, etc.)
• Fireworks night
• Gender-specific promotional night (Mother's and Father's Day, specifically)

These are all pretty top-line features. They're generally pretty available (old promo night details are hard to find), nothing is super-SABR, and it makes sense that any of them might affect attendance.

I ended up dropping day/night game, runs for/against, family nights, fireworks nights, and gender-specific promotional giveaways because they all tended to be on Fridays, Saturdays, and Sundays, which introduces some complications because day of week was already included. I also dropped the year from the analysis because I was concerned that it was too similar to winning percentage.

I chose to use a lasso regression model, because it (in summary) zeroes out coefficients that aren't actually significant to attendance. And interestingly, a lot of coefficients were zeroed out: most teams, some months, some weather conditions - and winning percentage. The final list of included and meaningful coefficients is shown here:

As you can see, this is a much shorter list than we started out with! I want to call out the teams that affect attendance at Camden Yards when they come to town:

Within the AL East, the Yankees and the Red Sox cause attendance to spike, while the Rays drive attendance down. That makes sense with our understanding of fan tendencies: Rays fans don't go to games anywhere, much less hundreds of miles from home, and Yankees and Rays fans are both everywhere and willing to travel to see their teams at Camden Yards. Being the Orioles' primary rivals, I'm sure their presence makes O's fans want to show up as well.

Other nearby teams, the Phillies and the Nationals, also drive attendance up. The Nationals' annual visit to Baltimore is the largest single-game attendance boost from a team.

The White Sox probably don't really drive people away from the ballpark. They simply have the misfortune of being the team that was in town following the unrest in Baltimore City and, as a result, the team that played the Orioles in front of an empty stadium.

The most surprising thing for me was the effect. or lack thereof, of playing winning baseball on attendance. While a good team draws more fans throughout the year, it seems that fans are drawn to the ballpark day to day for how well it works with their social schedule. Weekends are popular draws, as are the summer months, and people show up for promotions and family nights. Interestingly, attendance also decreases as temperature rises (I suspect that that function is parabolic, with a nice warm day drawing more fans than either a cold one or a very hot one). But how good the Orioles are seems less important than how convenient it is to attend a game.

To be fair, this regression uses data from 2012 to 2015, years in which the Orioles were generally pretty good. Winning percentage, or pythagorean winning percentage, might be a stronger predictor of attendance if some of the more turbulent years were included as well. So how well does it work?

It does a decent job, but we're within, usually, 10,000 attendees one way or the other. Not terrible, but considering that some games have as few as 15,000 attendees, this might not be the model to base inventory plans on. This regression has an R^2 of 0.635, indicating that this model describes 63.5% of the variation in single-game attendance. Another limitation, as far as long-term inventory planning goes, is that this model uses weather as a predictor of attendance - which it most certainly is! Walk-up ticket sales spike when it's nice out, but the weather probably isn't something concessions stands would know far enough in advance to use to their advantage.

Do Childhood Memories Affect Attendance?

Not long ago, I found myself late to a discussion about whether a person's favorite team being good when they were a kid makes them more likely to be a fan as an adult. The natural corollary would be that kids growing up around a bad team would be less engaged with the team later in life. This clearly isn't the case, as the Cleveland Browns continue to play in front of dozens of people (shots fired). 

But whether people have childhood memories of joyful success or soul-crushing sadness of their favorite team may affect how big of a fan they are - their magnitude of fandom, so to speak. By treating attendance as a proxy for magnitude of fandom in a region, I was able to measure whether childhood memories, good or bad, have an affect on adults.

I expanded a (pretty good!) season-long attendance regression I built while writing for BSL to include combinations of new parameters that measure extreme seasons 20 years in the past. To make sure I captured a chunk of a fan's formative years, I used a range of 5 years around the season 20 years ago. Parameters for predicting attendance in the 2014 season would be 1992-1996, for example. The parameters listed below were selected as examples of extreme seasons, both successful and not:

• >= 100 wins
• playoff berth
• World Series berth
• <= 65 wins
• division cellar

I built multiple regressions with varying combinations of these parameters, which all seemed to predict attendance pretty well. The chart below shows the ability of each regression, categorized by parameters used, to forecast attendance:

...but there's a real issue with the inclusion of these parameters. While the scores look great and the extreme memories may make sense to some, the coefficients were generally opposite of what would be expected. For instance, if you were to believe that a childhood World Series berth makes people more likely to be fans, you would expect it to carry a positive coefficient. That would indicate that it is a positive event that drives attendance among adults. The regression that included parameters for childhood World Series and cellar-dwelling memories that has an R^2 value of nearly 0.98 assigns the following coefficients (shown in green against the blue "no memory" control regression) to its parameters:

These coefficients are entirely out of sync with our expectations; they suggest that teams winning the pennant or even making the playoffs as a wildcard that year are pushing fans away, and memories of a World Series berth make people incredibly unlikely to go to games as an adult. It doesn't matter what its alleged predicted value is. This model is not grounded in any reasonable hypothesis and it's overfit to the data added to it.

The only regression that appeared to have any semblance of modeling reality is one that only includes memories of the team in the cellar:

See the smaller coefficients in this zoomed-in version

No coefficients radically changed direction, although it appears additional emphasis is placed on rostering a All Star starter and winning a wild card at the expense of winning a pennant. And it seems to predict that high beer and hot dog prices attract more fans. At least memories of being in the cellar pushes people away from attending.

I tend to favor the original model that doesn't include extreme memories, in particular because I don't believe very young fans know the difference between their team being in 4th or 5th in their division. In fact, I don't think very young fans care very much about the on-field product, and are more likely to harbor positive memories of spending time with their family at the ballpark. Those memories are far more likely to make adults want to return the favor with their own kids.

And anyway, as always, the most important coefficient is how well the team is doing in that season. It makes sense. It's not hard to tell over 162 games whether a team is good, and fans want to see an exciting team that gives them a good chance to go home happy.

In other words, you're all bandwagoners.

Would You Pay More for Tickets if the Orioles Paid More for Players?

Writers for Camden Depot have written a number of articles discussing how the Orioles could improve their team for the playoff run. These articles have primarily focused on the fact that the Orioles should consider trying to find upgrades because they're currently in first place. But there's another factor that the Orioles and other teams consider when they decide whether it makes sense to buy and sell that hasn't been discussed --- money.

Most fans want to see a winner and Orioles fans are no exception. The Orioles had an average attendance larger than 40,000 fans per game from 1992-1999 when they were reasonably good. From 2006 to 2011 attendance was nearly half of that at about 21,000 to 26,000 fans per game. What's interesting is that attendance has been increasing from 2012 to 2014. Attendance has increased from 21k fans per game in 2011 to 29k fans per game in 2013 and 2014.

According to Baseball Reference, Orioles attendance is down slightly in 2014 from 2013. Baseball Reference determines this by comparing how many fans showed up in 2013 through the number of games played at home in 2014. They're comparing 2013 attendance through 49 games to 2014 attendance through 49 games.

There are problems with this approach. More fans attend games on Friday, Saturday and Sunday then attend games on Monday through Thursday. More fans attend Orioles' games against the Red Sox, Yankees and interleague teams then they do against the Rays and Royals. If a double header is played due to a game being postponed and tickets are good for both games (which has happened once this year) then Baseball Reference considers the second game as having 0 attendance. While this is technically accurate, it is unhelpful when trying to determine trends. Without finding a way to account for these issues it really isn't possible to compare 2013 attendance to 2014 attendance.

What I decided to do was build a dataset with all Orioles home games from 2006 to 2014 and determine average attendance based on the day of week that a game is played as well as the opponent type in order to be able to compare attendance from 2006 to 2014. The chart below shows the season, attendance above average season and attendance above average season through 48 games. The reason why I use 48 games instead of 49 is because I omit all games with an attendance of 0 due to a double header.

Year	Extra Fans Full Season	Extra Fans Looking at First 48 Games
2006	76640	104549
2007	107976	64095
2008	-37139	2204
2009	-150904	-58753
2010	-310915	-253807
2011	-278696	-272159
2012	101641	112653
2013	250777	317547
2014	401421	401421

The chart shows that when these factors are taken into account we should expect the 2014 Orioles to have 100,000 to 150,000 more fans in attendance than the 2013 Orioles and about 650,000 to 710,000 more fans in attendance than the 2010 Orioles. The reason why the numbers look different can be explained by the following two charts. The first chart shows the number of games that the Orioles have played against different types of opponents on different days of the weeks.

Opponent Rank	Day of Week	2006	2007	2008	2009	2010	2011	2012	2013	2014
Average	Fri/Sun	16	17	16	18	18	19	19	16	14
Average	Middle	35	33	32	33	32	27	29	32	16
Average	Saturday	8	9	9	9	9	10	10	8	7
Elite	Fri/Sun	10	8	8	8	8	6	6	9	2
Elite	Middle	7	9	9	9	9	16	12	10	8
Elite	Saturday	5	4	4	4	4	2	3	6	1

The Orioles haven't played very many elite opponents on the weekend yet this year and it's showing in the attendance numbers. On the other hand, this team hasn't played a lot of home games during the middle of the week against average opponents. The next chart shows the attendance for each type of game.

The chart shows that the Orioles are seeing an increase in attendance in just about every category from 2014 to 2013 with the one exception being average games on a Saturday. It also shows a large increase in attendance in 2013 and 2014 compared to 2008 through 2011.

Orioles' fans have shown they'll go to games to support even a competitive team. The Orioles only made it to the playoffs once in that two year span and didn't win the AL East in either of those years. If the Orioles can win the AL East and/or advance in the playoffs then it seems reasonable to expect an even larger increase in attendance. Management will need to consider that when making decisions about the team. It means that another reason why they'll want to buy is because they see the benefits of having a good team.

There's really only one problem. The Orioles were eligible for Wednesday's Competitive Balance Lottery. The only teams available for this lottery are those that are in the bottom ten in either market or revenue. According to the CBA, the Orioles' market is considered the eleventh smallest meaning that the Orioles revenue is in the bottom ten. Given the Orioles payroll is 14th highest in the majors already it's hard to see the team spending a lot more money on payroll when the team simply doesn't have that kind of revenue.

The reason why the Orioles have such a large revenue problem is simple. Their average ticket price is one of the lowest in the majors. At a cost of $25 per average ticket and $45 per premium ticket, the Orioles are charging considerably less than the average MLB cost of $28 per average ticket and $93 per premium ticket. One reason why the Red Sox can spend so much money on players is because they charge $52 per average ticket and $176 per premium ticket. Each Red Sox fan brings in at least twice as much revenue as each Orioles fan. And when you consider that the Red Sox attendance is usually greater then the Orioles by about 500,000 fans it is clear why they can afford a larger payroll then the Orioles.

If the Orioles' attendance increases by a million fans from 2011 to 2015 then the team would see an increase of revenue between $25 and $30 million dollars. Realistically, all of that money wouldn't go solely to payroll so we're talking enough revenue to add some talent but not enough to make a real splurge.

The Nationals charge $34 per average ticket and $187 per premium ticket. Suppose the Orioles attendance was 3,000,000 in 2015 and they charged the same ticket prices as the Nationals. In that case, the Orioles might see an increase of revenue of about $80 million dollars which is easily enough to make a splurge. With that kind of increase in revenue a payroll of $130 to $140 million is very possible and with that kind of money the Orioles could go after a top free agent.

Which begs my question. Would you pay the same average ticket prices that Nationals fans pay if it meant the club could spend $40 million more on payroll?

A Winning Team in Baltimore Brings Back the Fans

One concern that often filled the deepest crevices of Orioles fan brains was the concern that maybe that subset of hollering, annoying Ravens fans were right.  Baltimore left baseball and became a Ravens town completely.  You know the type of fan I am referring to…the one that for some inexplicable reason needs to have his Ravens dominate all sports conversations.  Many of those fans were in full force during the unfortunate NFL fiasco that prevented the football team from opening up the 2013 NFL season in Baltimore.


Now, as an individual with sentimentality toward the Orioles those attacks on the team were annoying, but they also carried with them the possibility of truth.  The past ten years have been pretty harsh on the idea that a winning team or a great new ballpark will bring fans out to the yard.  The major examples were how the Miami Marlins’ stadium simply has not produced the funds needed for Jeffrey Loria to maintain an MLB quality team.  Another example is how the Rays’ annual winning ways has not produced a raving fan base capable of making the team actually somewhat competitive in any free agent hunt.  Perhaps even more of a concern would be how the Indians fan base, once a shining example of what fans should be, has not really reemerged.  So, too, was there that fear that over a decade of losing would crush Baltimore’s spirit for baseball.

Yesterday was my first appearance at Camden Yards, their 28th home game.  The previous two years I had been present as well for this Sunday game as if I was magnetically drawn to the Brooks Robinson High School All Star game that plays afterward or the torrential downpours that also seem to be attracted to this date.  Anyway, it struck me quite forcefully that there were a whole lot of people at the game.  The stands no longer had that ever present green that I saw so often in my Sunday sojourns of years past.  The announced tally was 39,182 in attendance.  It felt like it.

Shortly thereafter, Mark Brown over at Camden Chat tweeted about how the Orioles were bringing in a little over 2,000 more per game this season.  I thought that was impressive, but I also wondered how different it actually was over time.  The city took a little while to get used to the team (and still had issues later in the year trying to fill the stadium even a third full some nights–which prompted Adam Jones to complain during the first week of school) and the first few months of a season are always poor for attendance with the uneven cool weather and school in session.  Anyway, through the first 28 games of 2012, 649,809 had been in attendance.  2013?  801, 349, an increase of 23% or an average of 5,412 additional fans each game and, you know, those are Baltimore fans in attendance.
That bump up in attendance should pay dividends to the team and help it moving forward by showing the owners that fans are still willing to pay.  You see, this is what it is really about…convincing ownership to put out money.  This is similar to what fueled Philadelphia’s playoff run.  Ownership finally realized that fans were willing to pay as Jimmy Rollins, Chase Utley, and Aaron Rowand started bringing in the wins.  That led to a prime Jim Thome acquisition and then later arrivals of guys like Cliff Lee et al.  The Orioles may be at a similar forefront of an attendance boom.

Based on things like parking, tickets, and concessions…you may be able to assume that the Orioles are pulling in about $25 of profit for each new attendee.  If the 5,412 fan increase continues, then the team may be looking at an additional 438,372 in attendance, which could bring in $10,959,300 in additional profit.  However, this attendance means something else as well…future ticket price increases.  Orioles fans enjoy one of the lowest cost outings in baseball and it may well be time for the team to be more like Philly.  It might be something more easily accepted if there was not such a harsh feeling toward the current primary owner, but it likely is something that will need to happen for this team to retain its top talent and add more to it.

Below is the season to date cumulative attendance for Camden Yards with last season in comparison.

Just a Graph: Cumulative Camden Yards Attendance (2010-2012)

A follow up from this morning.  Around games 20 through 40 is where interleague play occurs.

Here is a 5 game moving average.




What we see here is that June was a remarkable improvement in terms of attendance.

Next is a graph showing the last three years' cumulative attendance.