*The 25th most competitive baseball team of all time?*

*The 25th most competitive baseball team of all time?*

With the 2024 All-Star game just behind us, I thought it might be fun to run this piece I recently re-discovered, that I wrote in the winter of 1998-99. I haven’t the energy to update it, but if there’s an ardent baseball fan among my readers, willing to take the time to construct a spreadsheet, perhaps you can update it and let me know how the introduction of teams from 1999 onwards affects these results. (So perhaps I should have said, not “of all time,” but “of the 20th century.” But when I wrote the piece, in 1998-99, “all time” made sense.) OK, here goes …

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The Babe comes to the plate. This is the strangest crowd reaction I’ve ever seen! Half of them are screaming in delirium, the other half have endured too much tension to even raise a whisper. The dream series, the 1927 Yanks against the 1998 Yanks, is down to the final out of the seventh game. One on, two out in the bottom of the ninth, but Miller Huggins’ team is one run down. One swing of the bat … and this is what Joe Torre has been saving David Wells for. Lefty against lefty, playing the percentages. Neither team deserves to lose in this incredible series …

Too bad we can’t know what happens next – even if we could raise the dead and put our heroes on the diamond together. Too many unknowns, too many differences in playing conditions, in physical conditioning, and so on. And that makes for debates that will go on forever, warming the winter off-season for fans. And that’s how it should be.

But there is a question we can answer. Which team achieved the more difficult task? The 1927 Yanks, winning 110 games in a 154-game regular season, for a .714 winning percentage? Or the 1998 Yanks, winning 114 regular season games out of 162, for a .704 winning percentage? And while we’re at it, let’s not forget the highest winning percentage in the 20th century, .763 by the 1906 Cubs, with their leader Frank Chance and Three-Finger Brown’s 1.04 ERA.

Their winning percentages all reflect their relative superiority over their opponents. What we need to estimate, then, is how strong their opponents were. If some of the teams that the 1906 Cubs played against were relatively weak, then the .763 winning percentage is artificially inflated. Similarly, if the 1998 Yanks didn’t have the benefit of easy opponents, perhaps theirs was a greater achievement, given the opposition they actually faced. Can we find a way, then, to measure the relative strength of the opposition?

In a word, yes. We might observe that the worst team in 1906 won only 32.5% of their games, whereas the worst team in 1998 won 38.9%. And in 1998 only one team out of 14 in the American League won less than 40% of their games, while in 1906 two of eight teams won less than 40%. That starts to indicate that the Cubs might have had a slightly easier time than the 1998 Yanks. But we need to go further. We need to look at all the teams they played against, not just the worst ones.

Statisticians have developed a formula that we can use to measure how competitive a league appears to be. In general, the closer the winning percentages cluster around .500, the more competitive the league is. That’s obvious, isn’t it? So what we can do is to check every team, see how far they are from .500, and take the average of how far they are from .500. The higher this average, the greater the differences between the teams in the league, and therefore the less competitive the league. A .700 winning percentage in a highly competitive league is a greater achievement than the same .700 winning percentage in a relatively uncompetitive league.

(OK, the statisticians make their calculations slightly more complicated than that, but that’s the idea, anyway. They calculate something they call the “standard deviation” of the winning percentages. I’m going to call the standard deviation the “competitive index,” abbreviated to CI. The lower this number, the tighter the finish of the teams, hence the more competitive the league. On reflection, perhaps I should have taken the inverse of the number, because intuitively a higher competitive index suggests higher competition, and it’s exactly the opposite here. Oh well, if it distracts you, think of it instead as the “tightness index,” with a small number suggesting that the teams are tightly packed, close to each other.)

Now let’s compare the 1998 Yanks with the 1927 Yanks.

The CI of the American League in 1998 was .078. That’s low. What does it mean, in practice? One thing it means is that more than half the teams have a winning percentage no more than .078 away from .500; in other words, half the teams are between .578 and .422. It also implies that there’s a large element of luck in the outcome of any single game. This is a tough league to win 70.4% of your games in. (As a matter of interest, the CI – or the tightness index – is consistently lower in baseball than in basketball or hockey. Baseball has achieved greater parity of team strength than any other major sports leagues in North America – and for that matter around the world. But that’s another story.)

The CI of the American League in 1927 was .115. The 1998 CI, as we’ve seen, was considerably lower. In fact, at .078 it was about 32% lower. That means the 1927 American League had a much less competitive environment.

How can we use that information? Very simply. It was roughly 32% harder to achieve a winning percentage much above .500 in 1998 than it was in 1927. In 1927, the Yanks had a winning percentage of .714; in other words, .214 higher than .500. In terms of 1998 equivalence, it’s reasonable to estimate (remember, we can never know for sure) that the .214 would have been reduced by roughly 32% – making it .146.

In other words, given the more competitive environment of the 1998 American League, if the 1927 American League had been equally competitive, the 1927 Yanks would probably have had a winning percentage .146 higher than .500, or .646. Playing 162 games, that would have meant 105 wins, 9 fewer than the 1998 Yanks. (So I’m guessing that the Babe strikes out to end an incredible series between two fantastic teams …)

Wait a minute! The title of this blog post introduces the 1927 Yanks as the 25th most competitive team of all time. So who’s the most competitive? Is it the 1998 Yanks?

Aha, I’ll save that for the next blog post!

**Takeaway**

*It’s possible to compare how competitive different sports leagues are, relative to one another. Adjusting teams’ winning percentages to reflect the leagues’ differing Competitive Indices, it’s possible to calculate (at least in theory) how many games a team would have won in a different league or a different year.*

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I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.