Payroll and playoffs in MLB

Inspired by this quote in another thread, every year, people point to the small market teams in the playoffs as if to support that $ doesn’t mean not competitive. I have always felt that a low payroll team may make a playoff run one year but they don’t have the consistency to get to the playoff multiple years and thus are not competitive over the long term.
I would also point out that the statement
If a team is consistently in the playoffs then it is a high payroll team.
is not equivalent to the converse
If a team is a high payroll team then it is consistently in the playoffs.
So pointing out that the Mets have been in the top 5 in MLB payroll the last four years yet only made the playoffs once in no way invalidates my hypothesis.

I took the last 4 playoffs divided by league (AL – 14 teams; NL – 16 teams). Because of the way the playoffs qualifications work viz. division winners are an automatic entry then best record of the teams left for the wildcard, each division winner is ranked based on payroll within their own division. Although I include their payroll rank within the league, this number is used in the next step. The wildcard team is denoted with a ‘w’ and their payroll is ranked relative to the rest of the league once the division winners are eliminated. So for example: Phillies (3/5; 7) means they were the third highest payroll in a division of 5 and seventh highest in a league of 16, Rockies (w 9) means they were the wildcard team and their payroll was ninth highest out of the 13 non division-winners.

One last note in an already overly long post – I did not consider $ v. playoff results. Why? Because in short series, management is so crucial and an event like a seventh game in the LCS means that the choice must be made of putting out your ace to win the series or hold them back for game one of the WS. Meanwhile, the future opponent has swept and is resting their team. Also, the playoffs are not seeded and the wildcard team cannot play its own division winner and so you don’t get a true 1 v 4, 2 v 3 sort of bracket.

2007 Playoffs
Angels (1/4; 4) Cubs (1/6; 3)
Red Sox (2/5; 2) Dbacks (5/5; 12)
Yankees (w 1) Rockies (w 9)
Indians (5/5; 14) Phillies (7)

2006 Playoffs
Athletics (4/4, 11) Cardinals (3/6, 7)
Twins (3/5, 10) Padres (3/5, 9)
Yankees (1/5, 1) Dodgers (w 1)
Tigers (w 5) Metropolitans (1/5, 1)

2005 Playoffs
Angels (1/4, 3) Cardinals (1/6, 3)
Red Sox (w 1) Padres (3/5, 9)
Yankees (1/5, 1) Astros (w 6)
White Sox (1/5, 5) Braves (3/5, 6)

2004 Playoffs
Angels (1/4, 3) Cardinals (2/6, 7)
Red Sox (w 1) Dodgers (1/5, 4)
Yankees (1/5, 1) Astros (w, 5)
Twins (2/5, 8) Braves (3/5, 5)

Multiple playoff teams: Yankees (4); Red Sox (3), Angels (3), Cardinals (3), Twins (2), Padres (2), Dodgers (2), Astros (2), Braves (2)

I’ll come back and post my conclusions later. For now, what do you think? Based on the numbers, does payroll affect long-term competitiveness?

I’d have to agree, payroll affects overall long tern competitiveness. Paying more in salary means you can more consistently put a good team on the field. Paying less in salary means you have to manage your team differently in order to get yourself a window of opportunity.

Now, we also have the fact that the Yankees and Red Sox are both very high payroll teams, very strong regular season teams, have gotten 7 of 16 playoff spots the last 4 years, and basically have tied up the top two AL East spots for the last 10 years. Oakland, Cleveland and Minnesota don’t have two very successful high payroll teams in their division like Baltimore does. With the unbalanced schedule, that means a lot of games against powerhouse teams, it’s a lot harder for a low payroll team to make it out of that division, too hard to win outright, too hard to get enough wins for the wild card.

Baltimore’s situation is NOT like that of most of the other “small market” (frequently a misnomer) teams.

The Brewers, for example, are safely quarantined in a division of small-market teams. To succeed, they don’t HAVE to outspend the Yankees or Red Sox. They just have to assemble a team good enough to win the weak NL Central. Then, if they manage to make the playoffs, ANYTHING can happen. Any team that makes the post-season has about as good a chance of going all the way as any other team in the playoffs.

The Orioles and Blue Jays have to beat the Yankees and Red Sox to have any hope at reaching the post-season. Realistically, that means they have to throw around money the way the Sox and Yanks do.

Hey, I inspired a thread. I feel special. The main issue I have with the analysis is I don’t think payroll is a good proxy for market size.

Yeah, Baltimore is not like other small market teams, in that it is NOT a small market team. I can understand Royals, Pirates, or Rays fans feeling jilted about money, but Baltimore? Seriously? Under what definition is Baltimore a smaller market than Boston? Baltimore is larger than Boston. Boston has Fenway, but Camden is a great park in a revitalized area. Camden will sell out every day given a semi competent Oriole’s team, and in fact has. Due to its size and modern amenities, a full Camden generates more money than a sold out Fenway. On top of that, Baltimore absolutely fleeced MLB when the Nationals came to town, and gets the benefits of that agreement. Just because Boston has done a hell of a better job, from top to bottom, of running a baseball organization, doesn’t mean it’s bigger.

I don’t believe teams should be rewarded for underutilizing their assets.

Quoted for full agreement.

Small market teams should quit whining because Oakland has shown a small market team can be competeitive.

And pseudo-small market teams like Baltimore, Houston (who doesn’t complain, but is often labeled a small market) and Detroit should especially shut up. None of those places are small market.

And besides that, the World Series champion is routinely a small spender, throwing your whole argument out the window.

Also, as a Mets fans, I take issue with this…

This exactly disproves your hypothesis because the Mets have proven time and time again that they can pull defeat from the jaws of victory regardless of how much they spend.

Did you know Detroit now has the 2nd highest payroll in baseball?

Well, under pretty much any conceivable definition of ‘market’ as applied to a sports team. Perhaps the population inside the Baltimore city limits is larger than the population inside the Boston city limits, but so what? The Red Sox market is all of Massachusetts, Maine, New Hampshire, Rhode Island, say 80% of Vermont, and 60% of Connecticut. Plus huge numbers of fans across the country with New England connections (or just obnoxious Yankee fans nearby) – when teams host the Red Sox there are often more Sox fans in the stands than local supporters (and the away team does get a cut of the ticket sales).

The Orioles market is Maryland, half of Delaware and maybe 10% of DC/northern VA?
No way those are equal.

Holy shit! For real?

I knew they traded for some big names, but I didn’t think it would push them past the Mets and the Red Sox.

Well if you’re going to count the Red Sox market as including obnoxious fans from NY, why wouldn’t Baltimore also count all of DC as it’s market?

Even if I accepted your numbers (10% of DC?), the point still remains. Boston has done a great job marketing to people outside their local market. Baltimore has done a lousy job. Why should Baltimore get rewarded for that? Who’s fault is it that Baltimore can’t draw more of the D.C. audience?

I’m okay with revenue sharing, but I want it done purely on demographics. If a team can make the most of their surrounding markets, they should be rewarded.

Yep. We went out and spent some cash. Also, for what it’s worth, when they were talking about baseball contraction 6 or 7 years ago and labelled Detroit as a “small market team”, I pointed out that we have more people in the Metropolitan Detroit area than Atlanta (a Big Market team) has in theirs.

I don’t know, whoever put a major league baseball team in Washington? And whoever set social geography and history so that people in Virginia and eastern Tennessee don’t identify Baltimore as the center of their region? I definitely think the Orioles should hunt down that guy and fire him.

I guessed 10% of DC was about right, given that there’s a local team, and that from my stints there most residents of DC see Baltimore pretty much as somewhere out in the sticks you only go to for the airport or an occasional get-out-of-town evening. If you think more than 1 of 10 DC baseball fans are Orioles fans, I’m willing to be corrected.

The Mets likewise can’t compete, because the Yankees are nearby, right? In fact, a lot of the time having multiple teams in close proximity creates rivalries that actually result in an increase in attendance and revenue. The Orioles haven’t been able to take advantage of this, because they have put out bad, old, and boring teams. They haven’t been able to sign free agents, because no one wants to sign with them, and there owner has a habit of undermining his gms. It is ridiculous to blame the Orioles’ problems on the Nationals. They have been there 3 years, and have yet to have a good season. If that all it takes for Oriole fans to abandon ship, then the Orioles aren’t doing a very good job maintaining fan loyalty.

The Orioles had no problem with revenue in the 90’s. You know what is different now? It isn’t because Virginians suddenly decided they hated Maryland. It is because they didn’t suck then. Build a fun and exciting team and the fans will return.

In fairness, accordinging to wikipedia the Baltimore & DC metro areas combine for just shy of 8 million people – less if those numbers have overlap – while the NYC metro area is approaching 19 million.

So you can’t really say that since NYC can comfortably support two teams, DC and Baltimore can as well. I’m not saying they can’t; just that the numbers don’t really make the comparison a compelling argument.

You obviously never studied logic. Look up Denying the Antecedant fallacy.

As the OP, I think a lot of you are missing the point. It’s not about who CAN compete, it’s about who has the highest payroll. If tomorrow George cuts his payroll to $30 million, could the Yankees compete? It doesn’t matter if he could AFFORD more - it’s about what he actually spends.

You’re right, I never have. But you can’t deny that payroll and “ability to compete” have never correlated in the MLB.

The playoff teams in 2007 ranked 1, 2, 5, 8, 14, 23, 25, 26 in team payroll. And going back to the Orioles, how much did they spend in the 90s with only one Wild Card spot and a single division title before 10 years of losing seasons to show for it.

I always feel compelled to note in these threads that the Yankees are in a class by themselves; in the average year since the turn of the millennium, NYY payroll + the median team payroll > the second highest team payroll. Last year was an exception - the Red Sox had some contract issues and can within $50 million of the Yankees. The third place team was still almost $75m back of the NYY, though.

That’s only true if you cherry-pick. The level playing field concept isn’t negated by even results, but rather is an issue of opportunity. If I flip a trick coin ten times and happen to get five heads and five tails, it doesn’t prove that the coin isn’t rigged.

Even ignoring the demonstrable imbalance of which teams (by payroll) make the postseason, you can’t deny that the teams aren’t on a level playing field when it comes to signing free agents.

Well, OK, going back a few more years:

PLAYOFF TEAMS (Opening Day Payroll Rank)

2007 - NYY (1), BOS (2), LAA (5), CHC (8), PHI (14), CLE (23), COL (25), ARI (26)

2006 - NYY (1), NYM (5), LAD (6), STL (11), DET (14), SAN (17), MIN (19), OAK (21)

2005 - NYY (1), BOS (2), LAA (5), STL (6), ATL (10), HOU (12), CWS (13), SAN (17)

2004 - NYY (1), BOS (2), LAA (3), LAD (7), ATL (8), STL (11), HOU (12), MIN (19)

2003 - NYY (1), BOS (5), ATL (6), SF (8), CHC (12), MIN (18), FLA (20), OAK (26)

2002 - NYY (1), ARI (4), ATL (7), SF (10), STL (13), LAA (15), MIN (27), OAK (28)

2001 - NYY (1), CLE (5), ATL (6), ARI (8), STL (9), SEA (11), HOU (17), OAK (29)

2000 - NYY (1), ATL (3), NYM (6), STL (10), SEA (13), SF (16), OAK (24), CWS (25)

So that’s eight seasons, which I’m calling a reasonably representative sample size for the contemporary economic era. Observations:

1. In every season, at least one team below the median payroll has made the playoffs.

2. In four of eight seasons, three out of eight playoffs teams were below the median payroll.

3. The number 1 payroll team (The Yankees) have made the playoffs every year. The number 2 team has made it only three times.

4. Of a total 64 possible playoff teams, 11 have been in the bottom third of the league in terms of Opening Day payroll.

5. During this seven-year period, nine teams have made the playoffs at least three times:

New York (AL) - 8 (1 in payroll every year)
Atlanta - 6 (generally in the top third of the league, but only once in the top five)
Oakland - 5 (never once out of the bottom third of the league)
St. Louis - 5 (always above the median, but rarely in the top ten and never in the top five)
Boston - 4 (top five every playoff year)
Los Angeles / Anaheim - 4 (three times in the top five, once just above the median)
Minnesota - 4 (below the median in every playoff year)
Houston - 3 (hovering around the median in every playoff year)
Arizona - 3 (twice with top ten payroll, once with bottom five)

So over an eight year period, among the nine most consistently successful teams, we see four teams with consistently very high payrolls (Yanks, Angels, Red Sox, Braves); two teams with consistently middle-of-the-road payrolls (Cardinals, Astros); two teams with consistently low payrolls (Twins, Athletics); and one team that has succeeded at both payroll extremes.

Looking at that distribution, I see no way to argue in good faith that payroll is as significant a factor as popular press would have you believe.* Certainly, teams above the payroll median are more likely to make the playoffs than teams below it. But:

(1) It is possible for teams below the median to make the playoffs, and not just in one-off or miracle situations;

(2) The relationship between payroll and success is not unidirectional. A team that expects to be successful in a given year will sign veteran, established players (with attendant high contracts), and trade for same. A team that expects to be less successful will eschew signing older, more expensive players (because why bother spending $15 million to improve from 65 wins to 70), and will tend to trade expensive assets for prospects (who are less expensive). So while payroll may affect a team’s chances of winning, it can also be said that a team’s expected chances of winning will affect payroll.

I conclude that increased payroll appears to confer some modest advantage*, but that being competitive in terms of payroll means only being in the top two-thirds of the league (which nearly every team has been at one time or another), and that the competitive advantage is not large enough to worry about.


    • The Yankees are the outliers here, and I can’t argue that their remarkable and sustained success - in the playoffs every year of this analysis - is unrelated to their spot atop the payroll charts. In their case, it is clear that a significant competitive advantage accrues from their payroll - not from their status as the top dog in this area, per se, but from the sheer scope of the differential between them and the next team on the list. The minor competitive advantage enjoyed by other payroll teams obviously growth exponentially with the size of the differential.

Bravo storyteller0910. That kind of informed research and mythbusting is what makes the SDMB great.

Everyone that thinks big money = playoffs needs to read that post.