Friday, August 18, 2006

Guest Columnist: The Steroid Snowball Effect

by A.Y. Park

Stop blaming the players. It’s not their fault. Yes, it appears many players have used performance-enhancing drugs over the course of the last decade. Yes, it is considered cheating and morally questionable. Yes, every sports site you look at has at least one columnist sitting on his high horse, talking about how disgusting these cheaters are for using steroids, and how Barry Bonds should be banned from the Hall of Fame. But can we really blame the players?

Despite the fact that most fans are appalled at the "tainting" of their beloved sport by rampant steroid use, I do not blame the players. Who do I blame? Technically, I blame the league for not setting up a system to prevent this from happening. However, I doubt the league could have had the foresight to prevent the current situation from occurring. The truth of the matter is steroid use is purely the results of economics (or Freakonomics for those who read Stephen Levitt’s book) and incentives.

Jose "The Chemist" Canseco claims he was the pioneer of steroid use and that over 80% of major leaguers have used illegal performance-enhancing drugs. Whether or not you believe Canseco’s statistics (I’m sure he sat down and ran a comprehensive analysis, thoroughly checking his numbers...), the home run production increase in the last 16 years have been staggering.

From 1989 to 2004 (excluding 2005 because of stricter testing), there had been a 77% increase in home run totals. From 1994-2004, home runs have risen by 65%. Whether or not you believe 80% of players have used steroids, the percentage increase points to the fact that, yes, a significant portion of players must have been on the juice if steroids is the primary cause of the increased home run production (I do realize there are alternative factors which could have contributed to the home run explosion – expansion, park effect, etc.). Even Barry’s monster 73 homers would only account for about 1% of the total home runs that year. So for those skeptics who believe that it’s only big name superstars – Bonds, Sosa, and McGwire, etc. – who used steroids, think again, because the numbers tell a different story.

So what’s your point, you ask? We know players use steroids and it disgusts us, you say. It hurts the game of baseball.

Maybe. But if a majority of players are using steroids, do they all lack ethics unlike the rest of us? Why would so many players engage in this activity if they know it’s wrong?

Well, let’s use an analogy to give us insight into a player’s decision-making process. Let’s assume you are applying for a job, and you have to take an exam to be hired. Your employer wants to see how naturally smart you are and has forbidden the use of any caffeinated substances (he considers it a mind-enhancing drug). Furthermore, your employer has informed you that your grade on the exam will determine your annual salary. Knowing how you’ve performed on practice exams, you expect that you will score well enough to earn $50,000 a year. But, you also know that if you drank a little coffee before taking the exam, your mind will be sharper and you could score higher. High enough to earn close to $250,000. And guess what? Nobody will test you for caffeine, so you can get away with it. Besides, you’re already naturally smart and gifted, and a little caffeine just makes you a little more alert during the exam. On top of this, you have two kids and a wife to support. All of a sudden, this situation creates a strong financial incentive to “cheat”.

This is basically what transpired in baseball. In 1990, the average salary for a major leaguer was $579,000. In 2005, it was $2.6 million, about 4.5 times the salary in 1990. As players became stronger and hit more home runs, salaries started to skyrocket. Everybody was performing well, and owners were rewarding them for their production. In fact, let’s look at the correlation between total home runs and total payroll over the last fifteen years.

Correlation does not necessarily mean causation, and home runs is definitely not the best performance metric, but the graph still makes a strong statement. As players hit more home runs and performed better, owners took notice and rewarded them, believing that the money they were shelling out was for above-average performance. What they didn’t realize was that on average, the whole league was hitting better.

Not a good enough reason, you say. Just because cheating means you make more money doesn’t justify it... even if you have two kids. Plus, aren’t these guys aware of the health risks?

Fine. But there are more important factors that create incentives to use steroids.

Going back to the caffeine example, let’s say that you found out that your friend used caffeine and earns $250,000, while you took the moral high ground and tested without mind-enhancing drugs. Your resulting salary was $50,000. Great, you have a clean conscience and that’s what matters to you. But now let’s say the firm has announced that they’re restructuring your division, and only the top performers will stay with the company. Now, not only are you paid less than your friend, you must compete with other hungry young professionals for a job. And as far as management is concerned, your friend is a top performer.

This is where game theory comes in. If you and five other people are fighting for two job openings, and you suspect that three of them are going to cheat and use caffeine, you have to make a difficult decision. Do you cheat to keep a job, or do you stay clean and possibly find yourself without work?

In baseball, this is the equivalent situation that fringe major leaguers find themselves in during spring training. And this is where the real problem in steroid use begins. These fringe players, who are desperate and are uncertain about their future, are the ones who cause the steroid problem. It’s less about the superstars. In reality, the steroid snowball effect begins with the little guy and works its way to the superstar.

The fringe major leaguers are the ones with the most to lose. If they don’t get a job coming out of spring training, they have no work (or go back to the minors), which means no or little pay, which means they can’t pay the rent, and which also means they can’t get hot girls (a major perk for major leaguers). Also, even though major league players get paid more than most of us, we must remember that baseball players’ timeframe to earn income is much smaller than ours. Players do not work until 65 and retire. A vast majority of them have less than seven years to secure themselves financially for the future.

As a result, the fringe major leaguer almost has to cheat. Hence, the bar for performing has been raised. In fact, most fringe major leaguers on steroids surpass other more talented players, and as a result, the more talented players have become the new fringe players, who now find themselves competing for a job. Now they must cheat in order to level the playing field. Confusing? It becomes a vicious cycle, and soon, everybody and their grandmother are cheating. Thus, the steroid snowball effect works its way through the league.

OK, you say. Maybe these poor fringe athletes dope to survive. But what about superstars? Kids look up to them, and they’re already talented. They don’t need steroids. Why do they cheat?

Because even superstars are affected by the actions of the little guy. This is why I call it the steroid snowball effect – it snowballs through the league to the more talented players. It may start with the little guys, but as they begin to perform better, the superstars are impacted in two ways: ego and money.

If you’re a talented superstar that can put up 35 home runs a year, and you turn around and see a once-scrawny outfielder, who packed on 20 pounds of muscle one off-season, hit 30 home runs, your ego starts to hurt. Furthermore, you turn around and you see a clearly less-talented player, who you suspect is on steroids, hit 60+ home runs, becomes a media darling, and captures all the best endorsement deals. It makes you mad. You know they’re cheating and that’s the only reason they’re that good. But you have talent. Now imagine what steroids can do for you if you’re talented.

This is the Bonds story. Game of Shadows writers Mark Fainaru-Wada and Lance Williams claim that Bonds became incredibly jealous of all the attention McGwire was getting for hitting home runs during the 1998 season. He knew McGwire was cheating and Bonds’ ego couldn’t handle the fact that a less talented player was getting great press coverage and fan adoration. So he did what any megalomaniac would have done. He cheated (allegedly).

The second reason superstars roid up is money. Simple economics tells you that the more supply there is, the less you can charge for it. So what happens when you go from a league where there are 10 players who can hit 30+ home runs to a league where 30 players can hit 30+ home runs? The home run hitting player’s market premium has been diluted by all these cheaters. Granted, owners are paying more for all these 30+ home run players than in the past, but if you’re a superstar, you should be paid an even higher premium than these cheaters. As a result, the true home run hitter wants to become a 50+ home run hitter to earn his true market value. This results in him cheating.

In summary, you can’t blame baseball players for what they’ve done. Yes, the game of baseball has been hurt by the scandals. Yes, steroids set a bad example for kids. And yes, using steroids is cheating. But the truth of the matter is, the incentives to use steroids were great, and the system was setup so poorly, that cheating was inevitable.

The spread of steroids was a snowball effect, resulting from one little guy wanting to keep his job for a full season. In fact, I believe Canseco’s admission was very similar to this. He didn’t believe he was naturally talented, and needed steroids to help him compete. But once one person cheats and the system lets him get away with it, you have one of two choices. You can choose not to cheat but be prepared to suffer the consequences when your relative performance versus other players drops. Or you can cheat, stay competitive, maybe become a star, get paid millions, and have adoring fans cheer for you. Most players choose the latter and I can’t blame them.

Agree? Disagree? Let A.Y. Park know what you feel about his guest column by emailing him at

Rob Hyman's column, "The Weekend Warrior", usually appears on alternate Fridays and will return in two weeks


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