Some Thoughts on Baseball Payrolls

One of the biggest complaints people have about baseball (aside from the somewhat non-issue, in my opinion, of steroids) is the discrepancy between the haves and the have-nots. In light of the recent New York Yankees World Series victory (I still haven’t see footage of them winning, so I could be wrong about this), I looked up the league payrolls as I had several questions I wanted to answer.

My first inquiry was into the payrolls of all the teams that made the playoffs this year. It turns out that five of the teams are in the top nine for spending: the Yankees, the Red Sox, the Angels, the Phillies, and the Dodgers. We were a one game playoff away from six of the eight spots being in the top nine in payroll. The Championship Series didn’t feature any team with a payroll below $100 million. Clearly, money plays a very important part of success in baseball. Sure, small market teams get a shot every now and then, like last year with the Rays, but the odds of them repeating their runs is pretty low.

Of course, it isn’t enough to have money to spend. The Mets and the Cubs (2^nd and 3^rd in payroll, respectively) showed us that you have to be moderately well run for success. The Twins and the A’s have shown us that a well run small market team can succeed to some degree, though neither have made it to the World Series in the past 15-20 years. Just making the playoffs is little consolation. The A’s are particularly unlucky because they lost whatever edge they had when the Moneyball philosophy was adopted by the big market teams.

Large market teams won seven of the last ten World Series with the Red Sox and Yankees repeating.

Now, this next part of my discussion is going to seem like Yankees bashing, and in a way, it is. I’m a Red Sox fan, so it really can’t come across any other way. Using the Red Sox-Yankees rivalry and the fact that these are probably to two most-hated teams in baseball, I’m going to put on a little math lesson (the Sox are 4^th in payroll this year, but I don’t want to use the Cubs or Mets because they shit the bed so badly this year).

The payroll difference between the Yankees and Red Sox is roughly $80 million dollars. The payroll difference between the Red Sox and team with the lowest payroll, the Marlins, is roughly $85 million. The Marlins are also the lowest payroll by about $7 million. There are 25 teams between the Marlins and Red Sox and two between the Yankees and Red Sox.

What does this tell us? As discussed above, there is a huge gap in the amount of success with large market teams and small market teams. The Red Sox may be an “evil” large market team that has the ability to sign any high-priced free agent (and they are), but compared to the Yankees, they are just another small market team. I’m not saying this to gain sympathy from teams the legitimately struggle to compete, but to illustrate any Yankees success should be viewed through this lens. Yes, they have great players, most of whom deserve to be revered in their sport, but the success is hollow. They should never NOT win the World Series. Or at least make it there. It’s also why the schadenfreude is so great when they fail.

There are a few counterpoints I should address before wrapping up. I have to acknowledge that the value of a dollar lessons the higher the payrolls go, so the difference between the Yankees and Red Sox isn’t quite as pronounced as the difference between the Red Sox and Marlins. The numbers just aren’t as cut-and-dry as one would assume. Also, the lack of success for small to medium market success isn’t just a matter of the money they spend, but also a matter of the money they don’t spend. Some owners are stingy, though they can afford more. They don’t see that hiring better office people or spending more on talent could bring in more revenue. But we only have the product we see, so that’s what we have to go on.

So, congrats to the Yankees and all their fans. You won the World Series with a $200 million dollar payroll. It must feel good (dammit, I know it does…).