Thursday, March 31, 2011

Today’s Stance: Hope Springs Eternal Despite Payroll

As spring training comes to an end, the great expectations for each Major League Baseball team begin today.  Each franchise is hopeful they have what it takes to make the playoffs at the end of the season.  Today, each team is in first place and for some it will be the last time they are in such a position.  Is there an indicator that automatically puts teams behind the eight ball?  Some fans may look to a team’s payroll as an initial gauge of potential performance.  Fans will either feel great that their team is spending big money or disappointed that their team once again failed to reach into their pockets.  How much of an impact does payroll have on a team’s chances of reaching the post-season?

Do the 2011 New York Yankees, who have an opening day payroll north of $200 million, have a better shot to make the playoffs than the San Diego Padres, who are estimated to spend $44 million on their payroll?  Of course!  But, fans shouldn’t get caught up in who spends the most money, or be discouraged that their team is not doling out hundreds of millions of dollars in payroll.  In the last three seasons, 58.3% of teams who reached the playoffs were also in the top third of MLB payrolls.  This is a decent percentage, but clearly does not constitute a certainty.  Money is not the determining factor.  The 2008 Yankees (just under $208 million) and the 2010 Boston Red Sox (over $171 million) had enormous opening day payrolls and missed the playoffs those seasons.  Ask New York Mets’ fans if money guarantees a place in the post-season.  The Mets have been in the top five in payroll the last three seasons and missed the playoffs each year.

There is the other end of the spectrum too.  Over the last three seasons there have been teams ranked in the bottom third of the league in payroll that have made the post-season.  The 2008 Tampa Bay Rays ranked 29th (just under $44 million), the 2009 Minnesota Twins ranked 24th (just over $65 million and the 2010 Texas Rangers ranked 29th (over $55 million).  The Rays and the Rangers made it to the World Series in their respective seasons.  So, it is not necessarily the team that spends the most money, but rather the team that utilizes their payroll to maximize player potential that has the best shot of making the playoffs.

There are a multitude of reasons which factor into a team’s ability to make the post-season beyond payroll.  Some of these situations include player health, player performance compared with expectations, players peaking simultaneously, and competent management/ownership.  Future posts will investigate links between these circumstances and the teams who have had recent success despite payrolls that were among the bottom third of MLB teams.  Hold on to the dream Padres fans.

Post-Season Results -
Team Salary Information - The Biz of Baseball (this link will bring you to a search option, use the drop down box to select the year and click "Team Totals")