The nature of markets is to trend. The nature of life is to trend.
- -- John Henry, quoted in The New York Times, 7/26/2002
When John Henry was 25 years old, he took over the family farm. That was nearly 30 years ago, and since then he's become quite wealthy, having established a hugely successful investment fund group. So wealthy, in fact, that he's owned a small piece of the New York Yankees, a very large piece of the Florida Marlins, and now a very large piece of the Boston Red Sox.
Oh, and John Henry knows a lot about baseball.
That might not sound particularly notable, but the truth is that most baseball owners don't know a lot about baseball.
Well, that's not really fair. Most baseball owners are great fans, and they have the knowledge of fans -- very rich fans, but fans nonetheless. Which is to say, most of them don't have the foggiest idea of how to build a winning franchise. The best owners hire someone who does know, and then sit back and let that guy run the show. The worst either try to run the show themselves, or hire somebody who doesn't have the foggiest idea, either.
But what if there were a baseball owner who understood how baseball works and hired the right men (and someday, women) to take care of the details?
Until a few days ago, I certainly didn't know of any baseball owners like that. But after reading an article in the Boston Globe last week, I began to suspect that John Henry just might be such an owner.
Henry's Red Sox are in second place, behind the Yankees (again). Everybody knows that. But instead of moaning about the relief pitching, or poor clutch hitting, or the suspect back of the rotation, or even The Curse of the Bambino, Henry has another theory.
Specifically, bad luck in one-run games.
"We have the best run differential in the American League," Henry told the Globe's Bob Hohler. "We lead the league in hitting. And we lead the league in pitching. So why aren't we in first place?"
"To me, the reason is our record of 11-17 in one-run games."
And Henry, citing a recent article about one-run games written by Bill James, continued, "That's where luck shows up more than any other area of baseball."
Bill James cited by a baseball owner? Bill has many thousands of readers in all walks of life, but I've never known "baseball owner" to be one of those walks. I asked Henry how he came to know James's work, and it turns out that Henry -- like me and Keith Hernandez and Bill James himself -- was once a devotee of tabletop baseball.
"I used to play APBA," Henry said. "and when James' first Baseball Abstract came out in the early '80s, I'm sure I purchased it. Also, around that same time The Hidden Game of Baseball came out, and I was fascinated by that."
But Henry's interest in baseball numbers predates The Baseball Abstract by quite a lot of years.
"You know, I probably got into my business because of growing up with batting averages," he says. "I grew up on farms in Arkansas and Illinois, listening to Harry Caray call Cardinals games on KMOX. And listening to the stats, I learned to figure out the batting averages in my head."
This story sounded familiar, and a moment later I realized why: it's much the same story that Bill James tells.
John Henry was born in the fall of 1949; exactly three weeks later, so was Bill James.
Henry grew up on farms in rural Illinois and Arkansas; James grew up in a tiny town in eastern Kansas.
Henry figured batting averages while listening to Harry Caray and the Cardinals; so did James, who remembers, "We all listened to Harry. Harry was simply a much better announcer than the Kansas City A's chump-of-the-year. Plus, the Cardinals were a much better team than the A's. We all listened to Harry for many, many hours."
Henry began playing APBA table-top baseball in the late 1960s; James began playing Ballpark Baseball a couple of years later. And a decade or so later, both began to make names for themselves in their chosen fields: Henry as an investor, James as a writer. And now, 40-some years after listening to countless Cardinals games at exactly the same time (figuring batting averages all the while), both of them are major figures in the baseball world.
James, of course, has published two wonderful baseball books in the last year. His knowledge comes through, loud and clear, on the printed page. But does Henry's statistical acumen affect his stewardship of the Red Sox? Does he prefer a general manager who's got some familiarity with objective analysis, as opposed to typical tools-based analysis?
"I think it's imperative to have both," Henry says. "You may not find the statistical side in a general manager, but we have Theo Epstein, our assistant GM. So I don't know if it has to be a general manager alone. I do think you have to have a synthesis, and I built a business on math even though I wasn't particularly adept at higher mathematics. I think I excelled at knowing which statistics had meaning, and which didn't; what constituted a significant statistic in financial markets, and what didn't."
And how does all this relate to baseball?
"It's very difficult to predict anything, especially based on the results of one-run games. There are so many factors that can enter into it. That being said, you do have to make decisions based on what you have. I think that's the biggest advantage that we have, the knowledge that we are limited in what we know. That you have to pay attention to small sample size."
Small sample size. Such a fundamental principle, and yet understood by such a tiny percentage of baseball executives. But there's more to the game than sample sizes. At one point in our discussion, Henry said something that sticks out in my notes. I can't remember exactly in what context he said it. But I look at the line in my notes, and I try to figure how it relates to baseball, and I can't help but think that John Henry is a new kind of baseball owner ...
Life is too dynamic to remain static.
- -- John Henry, 8/14/2002