The development of a valuation model to determine the true market value of professional baseball players Sung-Bae Roger Park*, Tae-Geun Kwon & Jong-Hwan Jeon Hanyang University [Purpose] [Methods] [Results] [Conclusions] Key words:

Table 1. KBO League At Bats requirement and subjects by season (1997 ~ 2016) Season Game At Bats Subjects 1997 126 390 36 1998 126 390 41 1999 132 409 37 2000 133 412 35 2001 133 412 39 2002 133 412 34 2003 133 412 37 2004 133 412 42 2005 126 390 38 2006 126 390 35 2007 126 390 40 2008 126 390 36 2009 133 412 37 2010 133 412 43 2011 133 412 36 2012 133 412 40 2013 128 396 46 2014 128 396 50 2015 144 446 44 2016 144 446 47 Total 793

Table 2. Player demographics and contract details Age Year Salary (Unit: 10,000 won) FA Max. 19 0 1188 0 Min. 40 22 240000 1 Average 28.63 8.04 23078.32.18 Median 28 8 10275 0 SD 4.12 3.89 32955.94.39 Skewness.21.53.46 1.64 Kurtosis -.47.05 -.362.74 N 793 793 793 793 Table 3. Yearly Consumer Inflation Rate (1997 ~ 2016) Year Inflation Present Inflation Present Year rate Value rate Value 1997 4.4.590 2007 2.5.813 1998 7.5.638 2008 4.7.851 1999.8.643 2009 2.8.875 2000 2.3.658 2010 3.901 2001 4.1.685 2011 4.938 2002 2.8.704 2012 2.2.958 2003 3.5.729 2013 1.3.971 2004 3.6.755 2014 1.3.983 2005 2.8.776 2015 0.7.990 2006 2.2.793 2016 1

Table 4. Hitter Statistics Statistic Max. Min. Average Median SD Skewness Kurtosis N AVG.185.376.291.290.029.078.074 793 OBP.245.478.370.368.037.198.080 793 SLG.259.739.444.439.080.589.341 793 G 93 144 122.80 124.00 8.913 -.410.350 793 PA 390 672 495.68 493.00 57.696.267 -.574 793 AB 327 600 428.48 427.00 50.786.321 -.400 793 R 26 135 66.36 64.00 18.617.522.175 793 H 65 201 125.01 123 22.676.426 -.030 793 1B 36 174 87.47 86.00 18.070.543.527 793 2B 5 46 22.07 22.00 6.638.415.054 793 3B 0 17 2.13 2.00 2.219 1.793 4.933 793 HR 0 56 13.34 12.00 9.548 1.067 1.528 793 TB 91 377 191.36 186.00 46.626.736 0.569 793 RBI 13 146 63.62 62.00 23.123.668 0.388 793 SB 0 66 12.02 7.00 12.491 1.667 2.670 793 CS 0 21 5.19 4.00 3.977 1.079 1.094 793 BB 12 124 49.88 47.00 17.337.789.681 793 HBP 0 31 7.06 6.00 4.667 1.243 2.209 793 IBB 0 27 2.41 2.00 2.989 3.103 16.441 793 SO 27 161 70.48 68.00 21.359.739.471 793 GDP 1 23 9.75 9.00 4.118.447 -.122 793 SH 0 36 6.21 5.00 6.283 1.325 1.916 793 SF 0 16 4.01 4.00 2.380 1.015 1.697 793 Table 5. Sabermertics statistics Statistic Max. Min. Average Median SD Skewness Kurtosis N OPS 1.20.50.81.81.11.49.25 793 GPA.40.178.28.28.03.43.19 793 SECA.64.10.28.27.08.81 1.00 793 TA 1.46.42.82.80.16.72.68 793 RC 174.52 22.98 74.02 70.1 23.42.92 1.16 793 RC/27 13.90 1.96 6.10 5.77 1.88.93 1.10 793 XR 148.75 21.34 70.94 69.00 19.91.67.58 793 ISO.41.02.15.15.07.71.52 793 PSN 35.34.00 7.80 6.72 5.78 1.20 1.89 793 woba.66.26.42.42.06.57.47 793 OW%.89.16.59.59.13 -.18 -.28 793 BABIP.41.21.32.32.03 -.01.13 793

Table 6. Correlation between Sabermetrics Statistics OPS GPA SECA TA RC RC/27 XR ISO PSN woba %OW BABIP OPS 1.99 **.84 **.97 *.91 *.97 **.90 **.86 **.29 **.94 **.91 **.502 ** GPA 1.83 *.97 *.91 *.98 **.90 **.81 **.28 **.96 **.92 **.55 ** SECA 1.90 *.78 *.83 **.78 **.87 **.37 **.89 **.76 **.18 ** TA 1.92 *.98 **.91 **.80 **.36 **.98 **.91 **.51 ** RC 1.93 **.99 **.74 **.36 **.88 **.84 **.52 ** RC/27 1.91 **.78 **.27 **.95 **.91 **.56 ** XR 1.74 **.38 **.88 **.83 **.49 ** ISO 1.30 **.75 **.70 **.10 ** PSN 1.38 **.27 **.14 ** woba 1.90 **.49 ** %OW 1.52 ** BABIP 1 (Equation #1)

Fig 1. Scree Plot

Table 7. Principal component analysis component matrix and component score coefficient matrix Component matrix Component score coefficient matrix Component Component 1 2 1 2 OPS.98.01 OPS.11.01 GPA.98.08 GPA.11.07 SECA.88 -.36 SECA.10 -.33 TA.99 -.00 TA.11 -.00 RC.95.06 RC.10.06 RC/27.98.10 RC/27.11.10 XR.94.03 XR.10.03 ISO.83 -.41 ISO.10 -.38 PSN.37 -.36 PSN.04 -.34 woba.97.02 woba.10.01 %OW.92.11 %OW.10.10 BABIP.52.78 BABIP.06.73 Table 8. model coefficients and statistical results Variable B β t (constant) -64.104-16.549 *** Year.034.404 17.562 *** FA.716.563 25.728 *** Prin1.102.208 9.745 *** Prin2 -.023 -.046-2.062 * R 2.645 F 357.433 ***

Fig 2. PHI and Player Salary Graph Table 9. POS rank in PHI Rank POS_PHI 1 Yang, Jun-Hyuk (1999) 1.22 2 Park, Jae-Hong (1997).73 3 Jang, Seong-Ho (2001).68 4 Kim, Tae-gyun (2003).67 5 Choi, Ik-Seong (1997).64 6 Shin, Dong-Joo (1997).61 7 Lee, Seung-Yeop (1999).54 8 Ma, Hae-Young (1999).54 9 Lee, Byung-Gyu (1999).52 10 Koo, Ja-Wook (2015).48 11 Jang, Seong-Ho (1999).47 12 Kim, Jae-Hwan (2016).42 13 Shim, Jeong-Soo (1999).42 14 Kim, Hyun-Soo (2008).41 15 Kim, Ki-Tae (1997).41 Fig 3. CHI and Player Salary Graph Table 10. POS rank in CHI Rank POS_CHI 1 Kim, Soo-Yeon (2001) 1.25 2 Koo, Ja-Wook (2015).68 3 Park, Min-Woo (2014).65 4 Lee, Jong-Wook (2006).62 5 Lee, Byung-Kyu (2011).59 6 Lee, Dae-Hyung (2007).58 7 Kim, Jong-Ho (2013).57 8 Jang, Won-Jin (1999).56 9 Park, Yng-Taek (2002).55 10 Lee, Hyun-Gon (2007).53 11 Jeong, Bo-Myung (2007).50 12 Kim, Won-Seop (2008).47 13 Jeong, Su-Seong (2005).46 14 Shin, Jong-Gil (2013).43 15 Kim, Hyun-Soo (2008).43

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