Rocket Science: Daryl Morey Brings Hard-Core Statistical Analysis to the NBA

Houston's pro basketball team pins (at least a part of ) its hopes on a brainiac GM

Part of Morey's brilliance was his ability to recognize a good idea when he saw one. Years earlier, James had created what he called the Pythagorean Theorem of baseball, a method which predicts wins based on runs scored and runs allowed. While at STATS, Morey simply took that idea and tweaked it to make it accurately apply to other sports as well.

"That was probably the first thing I got any notice for," says Morey. "It really was stealing from Bill James — which I was proud to do — and taking his approach in baseball, which shows that run differential is much more predictive of future winning — and also of the quality of your team — than your actual winning. Winning close games is a skill that no team could perpetuate and has never shown a consistent ability to do. So basically, I stole from Bill and showed that the same rules apply to basketball as well."

The mechanisms of change had been set in motion. Sabermetricians and statistical analysis geeks were popping up all over the country, and their message was slowly beginning to weave its way into the minds of the sporting public. But there was still one frontier to conquer. Until these theories infiltrated the games themselves, people like James and Morey were no different than a doctor who watches his sick patient take one look at the prescription, crumple it up and dismissively toss it in the trash. Eventually, someone on the inside was going to have to muster up enough courage to stand strong and take the medicine.
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Billy Beane had a problem. Baseball had become a game which pitted the haves versus the have-nots, and his small-market Oakland A's definitely fell into the latter category. With player salaries soaring into the stratosphere, the big-market teams seemed to be playing with a stacked deck.

When Beane ascended to Oakland's GM role in 1997, he knew the A's only shot at success was to outsmart everyone else. His mentor and the man he succeeded in Oakland, Sandy Alderson, had pointed him in the direction of James's Abstracts a few years earlier, and by the time Beane became general manager, he had read them all. Alderson had even begun to apply some sabermetric theory to the organization before he stepped aside. Beane made it his mission to finish what Alderson had started. The A's were going to fight back by shedding old-school ideology and becoming a business run by objectivity and sabermetric principles.

Ten years later, Beane is universally regarded as one of the best general managers in baseball, if not all of professional sports. The best-selling book Moneyball chronicles his grand experiment, which resulted in the A's becoming a perennial contender, despite being handicapped with one of the lowest payrolls in baseball year after year.

"He's extraordinarily smart, and what makes him even smarter is he always gets great people around him," says Morey. "Billy's like Dean Smith and Mike Krzyzew­ski and Rick Pitino; he has disciples all over the place, so that's a big credit to him."

But even though the door had been opened for people like him, Morey still had some major hurdles to clear. First among them: getting a job with a pro franchise. So when he left STATS in '96, Morey hit up every team in every major sport across the country.

"I was going to take whatever opportunity came my way, be it basketball or anything else," he says. "Actually, I had pretty good relationships with teams and just couldn't get it done. And I think that was when I got a little discouraged, which will happen to anyone in many fields. So then I said, all right, well now I'm going to focus on making enough money to buy a team."

With that, Morey made his way to MIT to focus on entrepreneurship. He never got close to joining the ranks of Les Alexander and Mark Cuban — Morey jokes that the nearest he ever got was when he applied for a job with Google when the fledgling company consisted of only eight employees. He never received a call-back — but he did gain valuable corporate experience while working for a few start-up companies and teaching a course at MIT.

But it wasn't until 2002, while Morey was working for a consulting firm called Parthenon, that a combination of diligence and serendipity created the opportunity he needed. The storied Boston Celtics franchise was up for sale and a group of investors led by Wyc Grousbeck swooped in to make the purchase. Grousbeck tabbed Parthenon to help out with the complicated process, and Morey was the point man who conducted the valuation process.

Kosmo Kalliarekos, Morey's boss at Parthenon, knew about Daryl's passion for sports. "It wasn't just like he knew each individual player — although he knew their stats like you would know your kids — but he kind of was always interested, and we'd have these great discussions about what makes a team become a winning team and how does it all work together," Kalliarekos says.

"He asked me, 'I would really like you to help me get a position with the Celtics. This is something that I always wanted to do.' And of course you could hear it and you could see it in his eyes that this was his dream. And of course we did everything we could, although we didn't really have to do much, to tell you the truth. I mean, it was obvious that he would be a great addition to any team."

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