New York Rangers - New York Islanders = $32,265,000
Los Angeles Lakers - Sacramento Kings = $47,539,063
New York Yankees - Pittsburg Pirates = $171,390,389
Above are three simple equations showing the range of team salaries in the National Hockey League, the National Basketball Association, and Major League Baseball, respectively. Clearly, Major League Baseball takes home the medal for this one.
Why? Baseball has been all out of whack for a long time; allowing teams to spend wildly, resulting in a disproportionate range of salaries across the league. In fact, the range in salaries for MLB is just below the sum of the top three team salaries in the NHL. In other words: MLB is a financial nightmare.
Not surprisingly, all the heat has fallen on one team. You guessed it, it's the New York Yankees. Every year, the Yankees spend, spend, spend. $190 million, $200 million, whatever it takes to put together an all-star team, the Yankees will throw down the cash.
But how much does that cash matter? Could the Yankees' unlimited sum of cash really result in an astonishing 27 World Championships?
Consider the following graph, which compares each MLB team's salary against their win total in 2010:
Evidently, there is minimal correlation between salary and wins (a correlation coefficient of just .1218 for all you statisticians).
Thus, we can conclude something very counterintuitive and potentially controversial: you are not guaranteed more wins by spending more money. In other words, you can't buy wins in baseball.
The typical fan would point to the Yankees as a counter-example. Consistently, the Yankees spend the most money, and consequently, they say, they have won 27 World Championships.
However, there are some counter-counter-examples. The Chicago Cubs spent the third most of any team in 2010, and won just 75 games, finishing 16 games out of first place. The Seattle Mariners spent the ninth most of any team in 2010, and finished 29 games out of first place with the second worst record in baseball.
Conversely, the San Diego Padres spent the second least of any team in 2010, but finished just two games out of first place with 90 wins. Finally, and most famously, the Tampa Bay Rays went to the World Series in 2008 with the second lowest payroll in baseball.
Baseball has been continually criticized for allowing teams to create empires by spending loads of money each year. However, this assertion is surprisingly false: more money does not equal more wins in Major League Baseball.
Nevertheless, a new problem arises. It is ridiculous enough that teams spend so much money on a game, but now we know that they are spending that money for no reason. It's all pretentious. Sure, the money may help a bit, but if it's not guaranteeing wins, couldn't it be better used elsewhere?
March 27, 2011
Andrew Jones:
Nice article. As a Minnesota Twins fan, I’ve always taken pride that the Twins have been able to win a lot of games on a low pay roll. Though it has increased in the past couple of years, they’re still vastly under teams who perform as well or worse than the Twins.
I think there is also something to be said for the type of players a big market with a high payroll attracts. Often, these are attention seeking individuals who have trouble contributing to the team chemistry and not to their own egos.
Beyond that, it also must simply be mentioned that the Yankees and other teams with high pay rolls have made some bad decisions and overpaid people. They’ve offered certain players contracts millions of dollars a year above what other teams would offer and that just isn’t good business.