Historical Relationship Between Money And Wins
I’m not going to say too much about this article by Dave Studeman, mostly because the information in it stands on its own. Just go read the thing, especially if you’ve become convinced that the answer to all the Mariners problems is “raise payroll”.
For those who prefer summaries, though, here’s the conclusion:
So here’s the point: Wins and salaries are closely tied, but the relationship between the two has changed over time. There is no doubt that some of the change has been random, or the simple result of individual team successes and failures, but some of it also seems to be related to structural changes in the game. The current state of the game? Despite the outrageous spending ways of the Yankees, it’s settled into a pattern that is more competitive than any previous time period, other than the years of collusion.
Once you factor in the extra playoff spots that have been added, it becomes clear that lower profile teams now have a better chance of walking away with a World Series title than at any point in recent history. When people complain about the lack of parity in baseball, or talk about how the game is rigged to reward those teams who simply outspend their opponents, they’re just speaking from a position of ignorance.
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If you can field a team with good young players at every position, money is not that important. Because of all baseball salaries being guaranteed, and the agents love of big, long-term deals, Money is very important to get a quality free agent to fill a specific need on an otherwise good team.
TOP 5 MLB Payrolls for 2011
1. Yankees $ 202,689,028 (2009 CHAMPS)
2. Phillies $ 172,976,379 (2008 CHAMPS)
3. Red Sox $ 161,762,475 (2007, 2004 CHAMPS)
4. Angels $ 138,543,166 (2002 CHAMPS)
5. White Sox $ 127,789,000 (2005 CHAMPS)
BOTTOM 5 MLB Payrolls for 2011
26. Indians $ 49,190,566
27. Padres $ 45,869,140
28. Pirates $ 45,047,000
29. Rays $ 41,053,571 (1 World Series Appearance)
30. Royals $ 36,126,000
There might be SOME correlation between payroll and wins. There sure as hell is a correlation between payroll and championships.
Read the article. Learn something.
The question is whether you want to have a single fling at the World Series or as in the case of a team like the Yankees or Red Sox consistently make the playoffs thus increasing your odds of getting to the World Series. If you arent in the playoffs, you sure as heck arent going to the World Series and IF your team is like the Mariners with a youth movement then sure you’re cheap now but as they succeed payroll goes up or you have to get rid of some of your better players.
It’ll be interesting see how it plays out with the new CBA. Teams won’t be able to over pay their 4th round draft picks or spend crazy money internationally. The relationship between money and wins may become closer then ever.
Holy cow, a box and whisker plot, first time I have ever seen one outside of a text. I may have to use it in my class.
This is interesting but not particularly surprising. Teams have gotten better and better at taking advantage of cost-controlled younger players, while at the same time, free agent salaries have continued to be be extremely high. The teams that spend the most are, almost inevitably, going to be spending money the least efficiently, because they are relying to a greater extent than other teams on free agents.
So what? We’re Mariner fans. Let’s take a look at the Mariners, specifically. If the M’s had the same payroll as the Angels this year, they could have signed Fielder, Edwin Jackson, Reyes, and, say, Yu Darvish. Some of those contracts may have been stupid, and maybe they could have spent their extra $70,000,000+ more efficiently, but for the sake of argument, let’s assume they wanted to make four big splashes. That’s probably 15 wins added this year, give or take a few, and probably turns the M’s into an 85-90 win team in 2012 and for the next few years. This is essentially what LAA just did, though they did it over the course of a few years.
I don’t expect the Mariners to do that. I don’t think we fans “deserve” that. I doubt the Mariners owners could actually afford it, in any case. But I do understand the frustration that comes from the feeling that we are not on an even playing field. When you compare the M’s to their competition, the big difference, at least in the case of a comparison to the Angels, is money. The playing field is not even. The Studeman article clearly demonstrates a correlation between wins and payroll, which of course we already knew exists.
What I would really like to see is coverage of this topic that acknowledges this fact and doesn’t involve establishing a false dichotomy. No one is “against” raising payroll, nor is anyone “for” spending money stupidly. As fans, there really are not two sides to this debate. In fact, there isn’t even a debate. Owners: please spend as much money on the M’s as you can, and, Jack, please spend it wisely. Thank you.
If there is a debate at all, it is whether the game would be more enjoyable for the fans if payroll was somehow equalized, whether by salary cap or some other mechanism. I don’t know how I feel about that, and I’m sure this isn’t the place to have that discussion… because it is a completely different topic.
josh jones,
Uh how much teams spent in 2011 is pretty much irrelevent to them winning in 2002-2009. Their 2011 payroll is relevent to what they did in 2011. What is your point?
If anything what you might have shown is that teams that won end up over paying in subsequent years because they overvalue the players that won, fans fall in love with those players, expectations rise, etc. Not saying your brief bit of data makes that case, but it is something interesting that warrants further study.
false dichotomy. I love that. want to venture into nature vs nurture?
The playing field is not even.
Welcome to sports. Or, really, welcome to life.
No sport has an even playing field. Baseball has the most even playing field of any sport, and as the article shows, the game has made structural changes to make the playing field more even.
If you want a sport where parity is king, become a fan of the National Coin Flipping League.
“josh jones,
Uh how much teams spent in 2011 is pretty much irrelevent to them winning in 2002-2009. Their 2011 payroll is relevent to what they did in 2011. What is your point?
If anything what you might have shown is that teams that won end up over paying in subsequent years because they overvalue the players that won, fans fall in love with those players, expectations rise, etc. Not saying your brief bit of data makes that case, but it is something interesting that warrants further study.”
Okay. If that wasn’t enough for you. Combined win total in 2011 for those top 5(payroll) teams 454. That’s an average of 90.8 wins for 2011.
Combined win total for the bottom 5(payroll) teams 385. Thats an average of 77 win for 2011
Thats a huge difference that might be effected by payroll.
I’m not sure your conclusion follows from Studeman’s. That baseball is more competitive now than in the past does not mean there is a level of parity in the sport that fans should be happy with, and his article does not show that the game does not reward big spending. In fact, the article and data show a meaningful correlation between spending and winning.
You’re working off a false premise. There’s no scenario where the ideal is no relationship between payroll and winning. Good teams have good players who deserve more money than bad teams who have bad players. The only way to get a scenario where winning and payroll are not correlated is to:
A) Have a sport where the outcome of games is essentially random
B) Have every team lack understanding in player valuation.
C) Have the owners collude to hold down salaries.
None of these situations are good. Any decently run league is going to have a correlation between payroll and winning. You guys need to stop thinking that a correlation between the two is a problem.
It’s a problem if the correlation is too high. The correlation is not presently too high.
JoshJones,
Instead of assuming that payroll drives wins, how about flipping the axis? Isn’t it just as possible that winning drives payroll?
In other words, once you start winning, you see payrolls go up through paying arbitration eligible players and signing that last piece when the marginal value of a win changes. Teams rarely (sigh…) spend $100 million on payroll to lose because if you’re going to lose anyway, might as well do it with a $50 million payroll instead of a $100 million.
Maybe we have dramatically different definitions of “even playing field” but it seems clear to me that the NFL has a more even playing field than MLB. This year notwithstanding, look at recent Superbowl matchups: Green Bay vs. Pittsburgh; New Orleans vs. Indianapolis; Pittsburgh vs. Arizona. Not gigantic markets there.
“Flipping a coin”? Did someone suggest it would be good if all teams had players of exactly equal talent? Are you suggesting that is what would happen if payrolls were equalized? I don’t think that’s what you think. And “life isn’t fair” isn’t much of an argument either.
Look, I kind of like having the Yankees there to root against. I’m not saying that I want to go to the NFL model. But it seems to me like a lot of folks, Dave included, will go to great lengths to avoid admitting that money is a big deal in baseball. You can spin it a number of ways, but one way to spin it for sure is that it defines the competitive landscape. According to Vegas, the four teams with the best odds to win the World Series in 2012 are the four teams with the highest payroll (NY, Philly, Boston, LAA).
Many fans would like it if the owners colluded to hold down salaries (i.e. salary cap). I don’t see how you can assume that’s bad on its face.
It seems disingenuous to suggest that LAA, NY, Philly and Boston have high payrolls simply because they have good players. That may be part of it, but another huge part of it is that they have more money to spend.
I assume that a salary cap is bad on its face. A salary cap is simply a money transfer from the players to the owners. If a salary cap is instituted, owners simply get richer at the expense of players.
It’s not Ignorance, it’s logic.
If the Mariners had $100 million more in payroll this year, they would almost certainly win more games. If the Angels had $50 million less in payroll, they would almost certainly win less games.
The fact that Mariners have a better chance of making the playoffs in 2011 than they would have in 1930 does nothing to invalidate the last paragraph. It also does not make me feel very much better, as a Mariners fan. Why would it?
There are about seven million articles online about salary caps and parity. Read at least one of them, then come back and we can have a meaningful discussion. It’s just a little tiring to see people who haven’t spent any real time looking at the issue running useless correlations on tiny samples and drawing incorrect conclusions.
NF: “I assume that a salary cap is bad on its face. A salary cap is simply a money transfer from the players to the owners. If a salary cap is instituted, owners simply get richer at the expense of players.”
A salary cap is only a money transfer from players to owners if it lowers total league payroll. A salary cap would lower salaries on some teams, but raise it on others. This assumes that a salary cap would coincide with a profit sharing system sufficient to bring all teams up to a salary that is close to the cap.
I’m sure people are sorry they only read the article you linked to and said to read, and not the entire internet.
Sure – that’s the main argument. But it’s sort of irrelevant to the fans who makes the most money as between the owners and the players. The owners will always push for some sort of a cap, using competitive balance as a pretext, when what they really want is to reduce payroll. A salary cap is definitely a money transfer from players to owners. But that isn’t ALL it is. It’s also a mechanism to equalize payroll which would have the effect of leveling the playing field.
I’ve always been interested in a detailed comparison between the economic models of the 4 major sports. I know Google is quite helpful in this but could you link some articles that you think explains this well Dave?
You’re working off a false premise. There’s no scenario where the ideal is no relationship between payroll and winning. Good teams have good players who deserve more money than bad teams who have bad players
Maybe I am just tired or maybe I am just awesome but isn’t this kind of a no duh sort of statement from a logical standpoint?
I mean:
Good > Bad
Good will make more than bad
Therefore, teams that have (more) good players will have a higher payroll than teams with more bad (or less good) players.
Right?
Beastwarking, you seem to be correct in your logic. Good IS better than bad. I think we are getting off topic here though, as I believe that the point was that the correlation between dollars and wins is, historically, at its lowest point. It still matters, but not as much as it once did….or did I miss the point of this article?
This is a pretty entertaining thread. I have a question–would any of you (assuming you root for the M’s) object to JackZ getting an extra $50 million to make things happen with?
I wish there was some other way, some neat and tidy stat, to succinctly express how teams maximize opportunities to improve their ballclub. Not just the almighty dollar, not some simplistic 1:1 comparison of millions to wins. But really, some stat that says “this team made the right move, to improve their major league or minor league system, with all the resources they had available”.
That’s really what people are on about, when they complain about “my team is too cheap” or “(insert hated team here) is trying to buy a championship”. Trying to measure or express it with just payroll and wins and $/WAR and so on seems kind of brute force.
For a given team’s offseason, I’d want to know if they took advantage of all reasonable opportunities. Doesn’t matter how they did it – extending the right players, trading fair value or even slightly more than needed to get a good piece in trade, outbidding other teams for a quality free agent.
I’m not smart enough to suggest any substitute or combination of substitutes. But just as a situation in a game has WPA and a leverage index, I’d love to have something similar for teams in a given season or offseason, or players during their tenure with a given team.
it seems clear to me that the NFL has a more even playing field than MLB.
How could they not, with 1/10 the games? Lots more opportunity for random flukes with 16 games.
Yep, it’s not about how much money is spent on team payroll but how the money is spent. That seems like a massive challenge for many teams.
The argument that teams that spend more money have better players seems pretty clear from all of the information and articles (of course with the understanding that the money is spent at least relatively wisely).
The argument that the reverse cause is true doesn’t work. ie the earlier post saying…
“Instead of assuming that payroll drives wins, how about flipping the axis? Isn’t it just as possible that winning drives payroll? In other words, once you start winning, you see payrolls go up through paying arbitration eligible players and signing that last piece when the marginal value of a win changes.”
Yes, there is a connection, but no, there is not a causal connection. That’s like saying that when it rains, there are more rear-end car accidents in Seattle….therefore, on days when people rear-end each other in Seattle, that must cause it to rain.
Spending more money will cause you to get better players (again assuming spent with some wisdom) and more often than not, better players means more wins. However, winning in itself does not cause you to pay players more.
The best explanation that I see for the relationship between teams who can afford big payrolls like the Yankees and those who can’t is that, essentially, the Yankee-type teams can afford to make big mistakes with contracts and still field a competitive team. In recent years, the Yanks for instance have frittered money away on Carl Pavano, Rafael Soriano, and Jason Giambi ($46M over the last 2 years of his contract for just 3 WAR!), and were still pretty awesome. If the Mariners or the D-Rays or the Rangers spent $15M per win on a couple guys, they’d be dead in the water. That certainly doesn’t make thing non-feasible for a team like the M’s to compete. It just means they have to play smarter.
To the other point about salary caps helping… sure, the NFL’s hard cap forces teams to periodically shed themselves of their top players and that in turn allows teams to surpass each other from one year to the next. Setting aside the point that the MLBPA would never agree to such a deal, this is hardly the norm in American pro sports. The NBA has a cap, too, but if anything that cap actually reduces parity.
It’s possible in the NBA to sign a player to a long-term max contract, have that player just not be all that good, and then be in what they call “cap hell”, wherein even if you are a big market team it is literally not possible for you to acquire free agent talent beyond a couple of very, very small exceptions (the middle-class exception and what used to be called the million-dollar exception). As a result, when you need to turn your roster over, you have to either just figure on operating with a smaller payroll due to the cost of that only-average player’s contract, or trade him away to a team who knows you need to trade him away and who as a result will make you deal them goodies along with his albatross of a contract.
Is that *really* the direction you want to see the game headed? Granted, the dynasties in the NBA aren’t necessarily built around big cities – thanks to the cap it’s almost as likely to build a long-term contender in San Antonio as it is New York – but if anything it has to be *more* frustrating to be a fan of New York city basketball, for instance, where you know the owner has money, you know the owner wants to spend money, but for years and years the owner simply couldn’t do so because the league told him he shot his wad on Allan Houston. Soft cap or hard, it’s the guaranteed contracts that cause that. And the players’ union in baseball is not going to give up guaranteed contracts, not while the league is quite frankly doing just fine as is.
If the Mariners or the D-Rays or the Rangers spent $15M per win on a couple guys, they’d be dead in the water. That certainly doesn’t make thing non-feasible for a team like the M’s to compete. It just means they have to play smarter.
Couldn’t put it better myself. Unless I quoted someone else.
“If we play like the Yankees in here, we’ll lose to the Yankees out there.”
Name that film.
> Once you factor in the extra playoff spots that have been added, it becomes clear that lower profile teams now have a better chance of walking away with a World Series title than at any point in recent history.
Very true. But this is irrelevant in a conversation about money and wins, unless wins = post-season success. I equate wins to winning over multiple seasons, as opposed to one-off World Series bliss.
I look at it this way: at one point, British odds-makers were taking bets on PGA golf tournaments for “Tiger Woods” or “The Field” (everyone else.) Given the option, if bets on MLB season wins were permitted for “Top 5 teams by salary” vs. “The Field”, I’d take the Top 5 bet. The reason: the odds are with me.
Okay but just going by salary alone is not really addressing what you’re talking about. It’s not like every city has a fixed amount of money that they pump into their club every single year. Seattle in particular is a bit of a fair-weather city (this is not a knock) wherein if the team wins 100 games the Mariners could probably foot a $200M payroll (as long as they keep winning anyway) whereas they lose money if they consistently lose 90+ with an $80M one. The teams up at the top of that payroll list are either right at the top of that revenue cycle or else in the case of the White Sox they’re coming down off of it (and it wouldn’t surprise me to learn that the Sox are losing money).
There would be a bigger problem if a team like, say, the Rays got lucky/smart, won 90 games for a couple years running, and then had to sell off all their players because the revenue didn’t go up enough to be able to pay their stars. I guess this *did* happen with Oakland in the early 2000s but I’m convinced that has more to do with a bad stadium and less than viable location than the league as a whole.
http://seattletimes.nwsource.com/html/marinersblog/2017455301_study_shows_link_between_payro.html
I’m curious on your response to this, Dave.
Good grief that man needs an editor.
Is it really true that the Rays success was built from a decade of being terrible?
Identifying and drafting the right players, making good trades and locking up young players to long term contracts is more of the foundation for the Rays success rather than being terrible for a long time, which plenty of teams are good at.