The beauty of baseball: Financially speaking


Most Major League Baseball fans would agree that something needs to be done to reform the leagues competitive unbalance—eventually. Every other major sport, besides soccer, has a salary cap to maintain competitive integrity. The exception, soccer, has no salary cap and it shows. In the English Premier League, for example, the same high-payroll teams compete each year (Manchester United, Liverpool, Arsenal, etc.). The other teams are left scrounge for secondary titles like winning tournaments, qualifying for Champions League or trying to avoid being dropped from the league all together. It’s difficult to claw your way from the bottom unless a wealthy oil-sheik swoops in to return your team for glory (Manchester City).

Somehow baseball is able to defy the inequalities created by a “capless” league. Yes, the Yankees spend the most and therefore are competitive nearly every year. The Yankees make more money than any team in baseball: they (arguably) have the most fans, sell the most merchandise, sell the most tickets and have the most nationally televised games. And, embracing our country’s capitalistic ideals, deserve to spend more than any other team.

And they do spend—a lot. Last year, the Yankees payroll exceeded 206 million dollars—by far the most in baseball. In fact, only eight teams spend half the money the Yankees did. The Bronx Bombers buy competiveness but they don’t necessarily buy success. Spending does not equal success in baseball. In fact, out of those eight teams that spent half of the New York payroll, only one (The Philadelphia Phillies) made the playoffs. Only one of those eight teams (The White Sox) finished within six games of a division title. Four of those teams finished with a .500 record or worse and one (The Mariners) finished with the second worse record in the entire league. In other words, money doesn’t necessarily buy success.

More evidence can be found simply by scrolling through 2010 payroll statistics. The Yankees were knocked out of the playoffs by the Rangers, a squad with the fourth lowest payroll. Four teams from the top fourteen payrolls and four teams from the bottom seventeen payrolls were represented in the playoffs. This essentially shows equal success between teams who spend and those who don’t. Low payroll teams can combat the big spenders with other factors: a good farm system, good team chemistry, etc. Perhaps the biggest payroll anomaly was the Sad Deigo Padres, who’s monumental late season collapse kept them one game out of the playoffs:  The Padres’ payroll was a measly 37 million dollars.

This same trend can be found in player contracts. Everyone in the league plays hard, no matter how much they make. Each season, some players who make a million bucks out perform players that make 20 million.  Look at NL MVP Joey Votto’s who got paid $525,000in 2009: The guy posted a .324./424/.600 clip and knocked in 113 runs. Oh, and led the Cincinatti Reds and their 72 million dollar payroll (12th lowest) to the playoffs. It’s not even worth comparing Votto’s stats to the highest paid NL position player Carlos Beltran (.255/.341/.427, 7HR, 27RBI), but Votto’s stats even outshine the NL’s highest paid first baseman Ryan Howard who posted a .276/.353/.505 clip with 31 home runs and 108 RBIs.  Howard put up great numbers but Votto’s, who got paid roughly 3% of Howard’s contract, were better.

Now of course Ryan Howard signed a big contract because he put up great numbers for under a million bucks just like Votto—that’s how it works; Play well and you’ll get a payday. And yes, Votto is a salary/statistical anomaly. But Votto’s case is not so rare. There’s Joey Votto’s scenario almost every year and there’s young guys making (comparatively) peanuts that out perform the big guns every day. That’s the point: in baseball, money doesn’t necessarily buy success. A big payroll may make success more attainable but does absolutely not guarantee it (Just ask the Red Sox and Cubs who both spent over 145 million on their payroll and both missed the playoffs.). It’s like height in basketball—it can be helpful but doesn’t necessarily make you a better player than the shortest guy on the court.

Yes, baseball has an inherent competitive unbalance built into it’s infrastructure but the game is also tailored to combat this. Unlike any other sport the lowest paid team has a legitimate chance to beat the highest paid team every time they play. Sure, there are a couple teams that perpetually sit in the basement of their respective decisions, but for the most part, teams and their fans break spring training optimistic for the upcoming year. The Yankees are welcome to spend a combined 100 million dollars on A-Rod, Jeter, CC Sabathia and Mark Teixeira because the game will continue to churn out Evan Longorias, Troy Tulowitzkis

Tim Lincecums, and Joey Vottos. Young, exciting players effectively combat the competitive unbalance. There are no guarantees. Ain’t baseball great?


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