Who are Baseball’s Smart Shoppers?
Even WorldCom’s accountants couldn’t make the Devil Rays’ purchases look good.
At the end of the season, it is reasonable to argue that just about every marginal
dollar spent on a team that made it into the playoffs was a dollar well spent;
and for a team that failed to make it into the post-season, every marginal dollar
was wasted.
But that’s not the only way to look at the issue of how wisely teams spend
their money. And it is not the end of the season. So, for now, I want to take
a look at how much each club is paying for a victory. Well, actually, that’s
not precisely what I want to see. I want to see how many marginal dollars each
club is spending on each marginal victory.
What is a marginal dollar? Because the minimum a club can spend on player payroll
is $5 million - 25 times $200,000 - every dollar above $5 million counts as
a marginal dollar.
And what is a marginal victory? That is a bit subjective, but I have set the
number at every win above a .300 winning percentage. Why? Because .300 is about
the worst winning percentage any major league club could conceivably have, this
year. No team in the last 40 years has been lower than .300. (The last was the
1962 New York Mets, 40-120, .250.)
Here are how the teams come out, in order of paying the least per marginal
victory to paying the most:
Oakland Athletics - $1.309 million
Minnesota Twins - $1.310
Montreal Expos - $1.642
Cincinnati Reds - $1.925
Anaheim Angels - $2.093
Florida Marlins - $2.241
Pittsburgh Pirates - $2.362
Seattle Mariners - $2.468
Atlanta Braves - $2.748
St. Louis Cardinals - $2.832
San Francisco Giants - $2.875
Baltimore Orioles - $3.189
Colorado Rockies - $3.201
Chicago White Sox - $3.274
Houston Astros - $3.284
Philadelphia Phillies - $3.351
Los Angeles Dodgers - $3.391
Arizona Diamondbacks - $3.557
Kansas City Royals - $3.581
Boston Red Sox - $3.679
San Diego Padres - $3.717
New York Yankees - $3.839
New York Mets - $4.596
Cleveland Indians - $5.356
Chicago Cubs - $5.842
Toronto Blue Jays - $6.474
Detroit Tigers - $7.360
Texas Rangers - $8.500
Milwaukee Brewers - $8.710
Tampa Bay Devil Rays - $26.709
A few notes and observations:
1) The player payroll figures used in this analysis are based on payrolls at
the start of the 2002 season. Although a few clubs have added payroll (and others
have dropped some), most of the marginal wins to this point were taken with
each team’s starting payroll in tact;
2) The wins per team was based on the standings listed by ESPN.com at 5 pm
on July 18;
3) The D-Rays horrible winning percentage makes them look especially bad. But
the $16.75 million they are paying to Greg Vaughn and Wilson Alvarez is 48.72%
of their team payroll. Had Tampa Bay been wise enough to eschew just those two
contracts (replacing them with league minimum salaries), their team payroll
would drop from $34.38 million to $18.03 million, and their dollars per marginal
win would drop by $14.635 million;
4) This kind of break-down demonstrates just how smart Billy Beane is. I have
not done the calculations, but I am quite certain that the Athletics have spent
the least amount per marginal victory every year for the last 3 years;
5) All of the teams that are spending more than $4 million per marginal victory
are the teams that are trying to or have been dumping salary; and
6) Though it is true that the Yankees are blowing everyone else away this year
in terms of total payroll - they currently have a $24.1 million edge on the
Red Sox, having added Jeff Weaver and Raul Mondesi - New York is not spending
much more per marginal win than the Royals and the Padres, and the Yanks are
paying much less per marginal win than the Cubs, Tigers, and Brewers.
Rich Rifkin
Posted: July 19, 2002 at 06:00 AM |
5 comment(s)
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1. tangotiger Posted: July 19, 2002 at 12:36 AM (#605580)Salaries and wins
The back and forth between Voros and I that looks confusing is that our basis for discussion was slightly different. He was talking about causative effects, while I was looking at relationships (not necessarily effects).
What is interesting also about Rich's article and using .300 as a baseline is that it's exactly what I used, and exactly what Doug Pappas used in his series of articles several months ago.
Rich correctly shows that we want marginal wins to marginal dollars relationship, and not total wins to total dollars.
Yes, I did that for every team.
How did I handle deferred salaries?
I used the current salary information available. That is, those are the actual checks that are being cut this year.
I realize (upon thinking about your question) that in the case of a team like the Diamondbacks (who have deferred quite a lot of salary) it makes sense to charge them more for this year. Nonetheless, the Diamondbacks will ultimately pay the piper. And so in a few years, their "current" player payroll expenses will seem unusually high per marginal victory.
Also, when a team is paying a rookie $200,000 per year, his actual benefits for this season may be much higher. That is, he may have received a $5 million signing bonus paid all at once a few years before his rookie year. That compensation was, in effect, money that the team hoped would go to a player who would help their major league team. However, draftee signing bonuses (unless they are paid out over a number of years) don't make it onto major league payrolls. In this regard, I was thinking of players like Barry Zito and Mark Mulder, both of whom now make very little in salary, but when they signed received millions of dollars to ink their contracts.
Now, why the hell would you want to contract teams that are conducting business smartly, competing, and not losing money? Only in MLB could this pass for wisdom!
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