We need more salary parity between teams in Major League Baseball.
When the Yankees spend $50 million more than the next richest team, the New York Mets, and then win the World Series, it simply amazes me that their apologists can claim that the situation is fair.

I start off with the principle that this is sport we are talking about, and that sports should be fair. There should be a level playing field, and winning should be based on brains, guts, luck, and foresight. Instead, the current MLB situation is based largely on who has the most money.

Winning can also be a matter of luck. There is no doubt that even the best designed plans can be damaged by an injury. "Chanceí also comes into play in things like whether a line drive finds a glove, or whether a bat meets a baseball squarely. Luck is a real factor in baseball.

Lets look back at the last ten seasons in the American League, from 2000 to 2009. Every year there are four teams that make it into the playoffs. We will examine which what percentage of times each team has made the playoffs over the last ten years. We will then rank the teams by payroll, and see which teams fall into the top ten, middle ten, and lower ten in terms of payroll.One would expect that there is a strong correlation between a teamís payroll and itís chances of making the playoffs. It will not be a perfect correlation (See 2009 Mets....), but it will show that payroll does matter in MLB.

In the American League, the teams most successful in making the playoffs over the last ten seasons were the Yankees (90%), the Red Sox (60%), and the Angels (60%). The middle tier of success is the Twins (50%), the Aís (50%), the White Sox (30%), then the Indians and Mariners (both 20%). The lower tier is the Rays and Tigers (10%), followed by the Blue Jays, Rangers, and Royals (all 0%).

In payroll, we will first rank where each team stands overall, and then within itís division. We will assign a rank of 1 through 30 showing where each team stood in relation to the other MLB teams in payroll rank. The disadvantage of this method is that it does not show wide payroll gaps.

In the American league, the teams that over the last ten seasons averaged the highest in MLB payroll rank (I took each teams position on overall MLB payroll rank for each season, added up the numbers for 2000 thru 2009, and divided by ten) were the Yankees (1.0), the Red Sox (3.10), the Angels (9.40), and the Mariners (9.9). The middle tier in payroll includes the White Sox (13.4), Rangers (14.5), Tigers (14.6), Orioles (14.8), Blue Jays (16.0) and the Indians (17.1). The lower tier in ten year payroll includes the Twins (23.0), Aís (23.5), Royals (25.0), and Rays (26.1).

When we put the numbers side by side, the correlation is evident:
1. Yankees 90% playoff rate, #1 in salary.
2. Red Sox 60% playoff rate, #2 in salary.
3. Angels 60% playoff rate, #3 in salary.
4. Twins 50% playoff rate, #11 in salary.
5. Aís 50% playoff rate, #12 in salary.
6. White Sox 30% playoff rate, #5 in salary.
7. Mariners 20% playoff rate, #4 in salary.
8. Indians 20% playoff rate, #10 in salary.
9. Tigers 10% playoff rate, #7 in salary.
10. Rays 10% playoff rate, #14 in salary.
11. Orioles 0% playoffs, #8 in salary.
12. Blue Jays 0% playoffs, #9 in salary.
13. Rangers 0% playoffs, #6 in salary.
14. Royals 0% playoffs, #13 in salary.
There are two teams that have clearly out-performed expectations looking solely at payroll; the Aís and the Twins.

The Aís seriously out-performed where we expect based on payroll from 2000 through 2003, and in 2006. This performance is documented in the book Moneyball (Michael Lewis), which was published in May of 2003. Once the Aís methods became well known through the publicity from this book, their ability to beat payroll expectations greatly diminished. Other teams picked up on the value of on-base percentage and statistical analysis.

The Twins have also exceeded payroll expectations. First of all, this is exaggerated to a significant degree by the division in which they compete. The difference from the highest payroll to lowest payroll in the AL Central has often been far less than in other divisions, so it is not as unexpected for the 4th or 5th highest payroll team to win that division. Still, in three of their five playoff year this decade, the Twins had a payroll significantly below their division average.

Finally, a number of teams have greatly underperformed where their payroll should place them. The Mariners, Orioles, and Rangers are the clearest examples, followed by the Blue Jays and Tigers.

The Mariners average being in the top ten in MLB salary over the last ten seasons, and their team salary has slightly exceeded their division average every year in the last ten. Yet they only have two playoff appearances, all the way back in 2000 and 2001. Since 2004, the Mariners have been outspent by the Angels every season, and the Angels went to the playoffs each of those years, except for 2006, when the Aís snuck in.

The Orioles have the misfortune of playing in the AL East with the Yankees and Red Sox. Their overall payroll ranks about 15th over the last decade, and they have zero playoff appearances to show for it. This is where the true unfairness of the current system shows itself. A team that finds itself in a division with New York and Boston has a very high bar to making the playoffs.

The Rangers started the decade (2000-2003) with high payrolls, and then dropped way down. The results have not changed: they have finished 3rd or 4th almost each season.

I think that the data shows that there is a correlation between team payroll and the chances to make the playoffs. The relationship is strongest when the payroll exceeds 130% of the division average payroll. That occurred thirty times in the last ten years, and of those 30 teams, 17 made it to the playoffs(57% success rate). When payroll exceeds 150% of the division average, as it did 11 times in the last ten years, those teams made the playoffs 8 times, for a 73% success rate.

On the other end of the spectrum, of those teams that had payroll less than half their division average (which happened 10 times in ten years), only one made the playoffs (the 2008 Rays), which is a 10% success rate.

My conclusion is that while it is possible to win with lower payroll, it is markedly more difficult. The lowest payroll teams have a much lower chance of playing post-season baseball than the highest payroll teams.

For those in the middle, the chances of winning seem to occur when strong young players come up through the minors, and stay under team control, combined with a thoughtful trade or a strong free agent signing. Winning with lower payroll is also more likely in a less expensive division where the payrolls of the top teams are only 20 or 30 percent higher than the middle teams.



What is the answer? That is the subject of another thread....
BTW: Read Joe Posnanski's piece on payroll and the Yankees....it is quite good.

Note: Team payroll data is from USA Today web site. http://content.usatoday.com/sports/b...aspx?year=2009