John Dewan’s Perfect Game
John Dewan's Perfect Game
By Sam Phillips
JOHN DEWAN, FSA, began his actuarial career in a fairly typical way—working for an insurance company. It didn't take long, though, for his love of baseball to give him the run signal and send him to another base. Here's how Dewan managed his passion and training into a winning team.
Q: Where did you get the inspiration or ideas for your company and the books you've written?A: The main inspiration came when I was working as an insurance actuary. I did what actuaries do, a lot of analytical work in the insurance field. I loved what I was doing and had a great time. But then one day, a friend of mine, another actuary, gave me a book called The Bill James Abstract. I sat down, started reading and I couldn't put it down. Here was the author, Bill James, doing exactly what I was doing, but instead of using insurance numbers, he was using baseball numbers. I fell in love with the whole concept of applying what I do, not just in insurance, but also in baseball. It became my lifelong passion.
Q: Have you always been a baseball fan?
A: I have. I grew up on the south side of Chicago, attending games with my father whenever we could. Our favorite outing each year was the Chicago White Sox bat–day double header. That was my source of baseball equipment as I grew up. I got my bat and each year used it for the entire summer. In the process, I fell in love with the White Sox and baseball. In my early teenage years, I started playing a board game called Baseball Strategy where two players face each other, each managing a team. Both teams had the exact same players of various types. Some were slugging, slow–footed, poor defensive players, and others were fast, speedy, weak–hitting but strong defensive players. I used to play against my friends. Then came a game called Strat–O–Matic Baseball and I was nicknamed Bowie Dewan by my friends. (Bowie Kuhn was the commissioner of baseball at the time.) I kept league schedules and all the stats of every player that played on the various teams. We played the games on the steps of my front porch; we had a fantastic time.
Q: Which came first, your book or your business?
A: The business. I was working at Aon when Bill James wrote, in one of his books, that he was having trouble getting information from the official sources. He was looking to start a grassroots project to collect scoresheets for every major league baseball game and computerize them. I thought, "Wow, this is right up my alley!" I've always had this idea of capturing play–by–play data from baseball in computer form. I put the book down and immediately called directory assistance in Kansas to track down Bill James. I was soon involved with Project Scoresheet. The first thing I did was write a computer program to take the data off scoresheets and put them into a computer. The next year I became the director of the entire project and coordinated the effort around the country to gather scoresheets and computerize them. I did all this in my spare time. Fortunately, by that point, I had passed all my actuarial exams. So, instead of studying for exams in my spare time, I started coordinating the computerization of baseball data. Then, in 1987 I said to myself, "I'm putting so much time into this, I have to consider trying to make a living from it." My wife, Sue, actually quit her full–time job before I did in order to dedicate more effort to our data gathering. I finally left my full–time job and began working full time in baseball. I made a monetary investment in a company called STATS, Inc. and became its president. It started in a bedroom office in our home. The next year we moved to a small basement office, and then to a larger basement office the following year. Every year we either added space or moved into a larger office as our business grew.
Q: When you first started your business, did you have a clear direction of where you thought the company would go or has it evolved over time?
A: I did have some ideas, but mostly it evolved. For example, I knew the board game companies were beginning to computerize their games and that they needed more sophisticated data in order to improve them. I knew that would be an area of growth. Very shortly after getting started we decided to publish books. When I was with Project Scoresheet, which was a not–for–profit company, we authored the Great American Baseball Stat Book. My interest in publishing books began with that book and that interest has never diminished. It was one of the first business areas that we developed at STATS, Inc. But the real expansion of STATS came when the Internet began to blossom. Probably the biggest thing we decided to do was to make a major investment in gathering data on a live basis. Now, when you go on the Internet, you can see box scores in progress. You can look at any game in any sport and see statistically what's going on in the game up to the minute. That was something we invented back in the early '90s.
Q: Who are some of your current clients?
A: I sold my company, STATS, Inc., to Fox Sports and Rupert Murdoch back around 2000. A couple of years after that, when my non–compete expired, a former associate at STATS, Steve Moyer, wanted to get back in the business. I put in the capital and he set up a new company in Pennsylvania called Baseball Info Solutions. The mission was to collect baseball data at the most detailed level that had ever been done. The company has been doing great and we now have about half of the major league baseball teams as clients. Of course, my favorite client is the Chicago White Sox. I meet with them about once a year and we provide them with all kinds of analytical information. My specialty is defense. Three years ago I wrote The Fielding Bible, a book focusing on the defensive skills of major league baseball players. I developed a system called the Plus/Minus System, which evaluates statistically how well players cover their positions. I have a new book, The Fielding Bible—Volume II, coming out this spring. Right now, I'm in the midst of analyzing data. This is the fun part, breaking down data every which way.
Q: Do the major league teams use your data for game strategies?
A: Yes. One of our products is based on my book. They'll look at our defensive information when they are about to face a new opponent. For example, they might want to know whether or not you can run against a particular outfielder—does he have a strong throwing arm? The teams also have scouts, but sometimes the scouts haven't seen much of a particular player, especially players playing a new position or a young player just coming into the league. The data we provide goes hand–in–hand with scouting reports. Alfonso Soriano with the Chicago Cubs is a perfect example. He is a former second baseman, now playing left field. When he makes a throw from left field, he looks like a second baseman making a throw. He has a side–arm motion on his throws from the outfield, just like a second baseman making a throw to first base. By looking at him, you would not think that his throwing arm is any good in the outfield, but in fact, the numbers show he has the most effective throwing arm from any outfield position over the last three years. His great speed allows him to get to the ball quickly, and that little side–arm flip allows him to release it quickly. He has uncanny accuracy. We invented a new stat called Baserunner Kills, which is a direct throw from the outfielder to the plate or to a base to nab a baserunner. Soriano has more Baserunner Kills than any other player in baseball over the last three years, by a wide margin. If you just watched him, you would say his arm is not effective. But this is what an actuary does—replaces impressions with facts.
Q: Have you expanded the business into other sports?
A: When I was at STATS, we did. We started with baseball and then went into football and then basketball and hockey and also college sports. STATS is now worldwide and is probably the most well known, most diversified company in terms of statistical information. My new company is focusing totally on baseball. We're getting deeper and deeper into the data. There are always more things to find. As deeply as we go and as nerdish as that might seem, it's been fun. There is always more analytical information and more you can learn. It will never end.
Q: Would you be willing to share the actuarial methods you use to compile your data?
A: When I did The Fielding Bible, I explained the Plus/Minus System in layman's terms. Of all the things I've done, the Plus/Minus System utilizes actuarial techniques the most. At Baseball Info Solutions we have a group called our Video Scouts. Their job is to review video of every pitch and every play of every single game. That's over 2,400 games a year. For the Plus/Minus System, we're keying in on the location of every batted ball. When our scouts are charting a game, they mark down the exact location of every single batted ball on a computer screen. The pixels on the computer screen are then converted into a coordinate system. When charting a game at White Sox park, for example, they have a graphic of U.S. Cellular Field on the screen. When Paul Konerko hits a ball to the left of the shortstop position and it rolls into the outfield, they mark on the computer screen exactly where the ball went. They also indicate what kind of ball it was: a grounder, bunt, liner or fly ball. We invented a category called a fliner, which is a cross between a liner and a fly ball. We found that creating this new category was statistically significant. Not only do we keep track of the location and type of every batted ball, we even do a subjective measurement of velocity: soft, medium or hard.
Based on that data we then look at, for example, how often every shortstop in baseball gets to a softly hit batted ball that's 15 feet to his left. The data shows that shortstops get to a batted ball that's softly hit 15 feet to their left 26 percent of the time. So, if a player makes that play, it's a good play and we give him a score of +.74 for the play: 1 minus .26. If he doesn't make that play, he gets a –.26. Over the course of a season we add up all the plusses and minuses for a player. This is his plus/minus number. Any total above zero is above average, below zero is below average, and anything near zero is average. A +10 for the season is good, while the best players might get to +30 or +40. Chase Utley of the World Champion Phillies is known for his offense, but he was also tremendous defensively as well, posting a +47 at second base in 2008.
Q: What are your plans for the future?
A: Like I said, I'm coming out with The Fielding Bible—Volume II in February 2009, and that is consuming my time for the next three to four months. In addition to being involved with Baseball Info Solutions, I also have a company here in the Chicago area that I'm part of called ACTA Publications. Before I started with them, ACTA exclusively published Christian books. Now that I'm involved, we publish sports books as well in our ACTA Sports division. It's an odd combination, but it's a fun combination. In the spring we're coming out with the second edition of The Bill James Gold Mine. (Bill James has become a partner on many projects.) The Gold Mine is a book where we're looking at not just defense but all kinds of different statistical analyses of baseball players. I'll also continue to publish a free weekly e–mail called John Dewan's Stat of the Week®(StatOfTheWeek.com).
Q: What was your biggest challenge or most memorable achievement and did your actuarial background or skills aid you in any way?
A: My actuarial skills have aided me throughout my career. While working in the insurance field, I had the great luxury of having some tremendous mentors who taught me a great deal. Spencer Koppel, Steve Lippai and Bob Anderson, to name a few, are all actuaries who helped me develop my actuarial and business skills. Ken Saunders ran our group division. I learned a tremendous amount from him about how to run a business. They were not just great mentors. They are wonderful people. A lot of my success has been based on having learned so much while working with them for more than 10 years.
Probably the most memorable thing that occurred in my career was being sued by the NBA. They sued STATS back in the mid–'90s and there weren't too many actuarial skills that I could use to help us get through that! We were doing a pager product for Motorola that would report the scores and limited statistics on NBA games as the games were in progress. We were in discussions with the NBA to work out an arrangement where we could pay them a licensing fee to put the NBA name on the product. The NBA turned around and sued us instead, trying to say that they owned the scores and statistics of the game. They claimed that we were misappropriating their data and sued both STATS and Motorola. We initially lost the lawsuit, but we won on appeal by the score of 3–0. All three appellate judges were clear in their opinion that the NBA does not own the scores of the games, and does not own the statistics. Scores and statistics are in the public domain, and since we were collecting the information ourselves, it wasn't misappropriation. This case set an important precedent in the legal industry. We can see the impact today by looking at the Internet and seeing how sports scores and statistics are readily available to the public, even in the midst of a game.
Q: Is there anything you would like to add?
A: I believe the actuarial profession is one of the best careers there is. The actuarial exams are a challenge, but each completed exam is an important milestone. Once you get through them all, it's a big accomplishment. I loved my job when I was in the insurance industry, but I have to admit that working with sports numbers is more fun than working with insurance numbers! I may be the only practicing sports actuary in the country. I'd be curious to find out if that's true or not.
John Dewan, FSA, is co–owner and co–publisher of ACTA Publications. He can be reached at email@example.com.
Sam Phillips is a communications associate at the Society of Actuaries. He can be reached at firstname.lastname@example.org.