Running a quick little linear regression, and it really drives the point home: from 2002-2007, a marginal run scored on offense was worth $231,480, and a marginal run saved on defense was worth $86,490. It’s long been a point of contention that teams overvalue a player’s offensive contributions relative to his defensive contributions. It’s plausible, however, that teams aren’t so much ignorant as responding to market conditions.

1) Those teams that have won during that time period tend to have been primarily offensive clubs. You occasionally had teams like the 2005 Astros winning and relying upon a dominate defense, but it seems like the teams that have won over the last decade have been like the Yankees: dominate offensive players and maybe one or two good pitchers, but defensively lacking.

That might skew the data, because RS would be more correlated with winning percentage than RA (or, rather, how RA is correlated with 1-WP). That obviously doesn’t make any sense, because saving a run should do the same thing that scoring a run does.

2) So a team could build a cheap team with good defense and effectively compete with wealthier, more offensively powerful clubs. Adam Everett: the Jeremy Giambi of the late 2000’s!

As for the Yankees overpaying for Texeira and a salary cap, that’s a tougher question. He’s probably right in saying that teams are hiding their real value, but I think the various elements he discusses (win percentage, population size, revenue, etc.) are so interrelated that it requires a lot more work to figure out.

The concept behind Pitching Runs Created, a stat used at hardball times, is that a run saved is worth mroe than a run scored. David Gaasko explains the concept in a HT article:

Pitching Runs Created is the first pitching metric that acknowledges and adjusts for the fact that a run saved is not equal to a run scored. Let’s say we’re in a league where the average team scores five runs a game. You can choose a pitching staff that allows one run per game, or a lineup that will score 9. Which one do you go with? The pitching staff, right, because the only way you can lose is to get shut out?

But a metric like Runs Above Average will tell you that the two are equal: Both the lineup and the pitching staff are 4 Runs Above Average. However, if you choose the pitching staff, you end up winning 93.6% of your games, while with the offense you’ll only win 77.8%. That’s where Pitching Runs Created come in; they establish the offensive equivalency of a pitcher.

So, to the extent that teams paid so much more for offense than defense indicates a rather sizeable market inefficiency. However, it well may be that fans will pay more to see offense than defense or pitching. Maybe that can explain the market valuation, in part. However, I think Only A Lad is right that some teams learned that they could put together winning combinations more cheaply with offense. In fact, by the mid-90’s, Billy Beane was moving in the direction of more defensive oriented teams because of the relative market prices.

The Gaasko article link by the way;
http://www.hardballtimes.com/main/article/pitching-runs-created-again/