Moneyball Calculation: Would a Stats-Obsessed Manager Prefer Jeremy Lin or Melissa Mayer?
This week, the sports and business worlds were shocked -- twice! -- by the moves of two prominent players. Jeremy Lin, the breakout star of this season’s New York Knicks, is moving to Houston. Meanwhile Melissa Mayer, employee number 20 at Google (GOOG), was picked up by Yahoo! (YHOO)
Lin has a three-year, $25 million contract. Mayer could get $129 million over five years. So who’s the better value?
Let's review to make this assessment. Lin, if you somehow missed it, has the kind of story that turns casual fans into religious wingnuts. Raised in Palo Alto (of all places), he started from basketball nothingness. He didn’t get a college scholarship, he barely got into the league, and even then he spent a lot of time on the bench. Then he got his chance, inspired “Linsanity” and became an international phenom. Although his breakout began in February 2012, he has been credited with sparking a “surge” in the stock of Madison Square Garden Co. (MSG)
The 23-year-old is getting a big raise. He made $788,0000 last season. In Houston, he will make $5 million his first year, $5.225 million his second year, and $14.8 million his third year. But is he worth it? He went 1 for 11 with 8 turnovers in what ESPN called a “humbling, nationally televised loss in Miami.” Then he hurt his left knee, and surgery hobbled him for six weeks. His former Knicks teammate Carmelo Anthony called the package “ridiculous.”
Compare that to Melissa Mayer. At 37, she’s also young. And she’s also something of an underdog. Although she had a high-profile position at Google, her appointment at Yahoo seemed to come out of nowhere and shock Silicon Valley, which had expected the job to go to interim CEO Ross Levinsohn.
Mayer’s reception, coupled as it was with second-quarter earnings, has been warm:
Mayer's Google salary wasn't public, but this had better be a raise. According to a new filing, she gets a $1 million annual base salary and a bonus of up to $4 million a year. She gets $6 million in restricted stock and $6 million in options, just about every year. She also gets a signing bonus worth $30 million, to compensate her for leaving Google. But plenty of people seem skeptical that she can turn this troubled company around. A Wall Street Journal story suggested she was called in to oversee its failure.
Lin is expected to lift the fortunes of the Rockets franchise. Mayer’s goal is to turn around Yahoo to compete more effectively with Google and, especially, Facebook (FB). So who’s the better value?