Andrew E. Friedman is a new breed of manager in America’s favorite pastime—the classic game of baseball. As the general manager of the Tampa Bay Devil Rays (his formal title is executive vice president of baseball operations), Friedman is responsible for overseeing and directing the team’s overall baseball operations. And he’s doing it his way—by relying on financial models and data mining to help improve the team’s performance and valuation. For the 2006 season, Sports Illustrated has ranked the team 24th overall out of the 30 MLB (Major League Baseball) teams. Its payroll of $35 million puts it at the bottom of the league in terms of players’ salaries. However, Friedman uses his own numbers approach to assess the value of his team and to help it realize its maximum potential.
With a degree in management and finance from Tulane University in New Orleans, Friedman understands the language of business. He spent 5 years on Wall Street before joining the Devil Rays organization as director of baseball development. Having played on Tulane’s baseball team until an injury sidelined him,
Friedman is no stranger to the game. However, in baseball, quantitative, statistics- based methods of player talent assessment, team valuation, and contract negotiations are not the usual approach to doing business. That’s why Friedman isn’t concerned about having the lowest payroll of any major league team because his assessment—based upon a valuation technique used on Wall Street—places the real value of the Devil Rays’ payroll at closer to $50 million.
Friedman also uses a quantitative approach to trading players. He says, “1 am purely market driven. I love players I think that I can get for less than they are worth. It’s positive arbitrage, the valuation asymmetry in the game.” He and team owner Stuart Sternberg and team president Matt Silverman recently put their philosophy of quantitative, statistics-based talent assessment