Baseball is a fairly unique sport in the fact that team owners have much more ability to open the checkbook to get the players that they want.  Some say that this has caused disparity in baseball and is bad for the game.  Being from Wisconsin, but cheering on the Angels, I often get the “big market / small market” comments from Brew Crew friends.  I decided to put the concept to the statistical test.  Are teams that spend more money really buying wins?

The Numbers

I took the last 3 years and ranked each team by their team payroll, winning percentage, and dollars-spent-per-win.

The Recent Angel’s Payrolls

Unfortunately, the last few years have been a rough ride for Halo fans.  Each year, there have been high expectations.  Each year, they’ve been let down.   The payroll and wins comparison proves this has been more than just a perceived let down. 

Between the years 2010 and 2012, the Angel’s payroll ranked 8th, 4th, and 4th, respectively.  However, in those years, they never ranked higher than 10th in winning percentage, with 2010 being the worst at 17th.  In 2012, the Angels spent over 1.7 million dollars per win, while the AL West division-winning Oakland A’s spent under $600,000 per win.  But, let’s be honest.  A large majority of that underperforming payroll was because of one guy who didn’t hit too Wells. 

Is Winning Percentage the Only Factor?  What About Value?

I am defining a “value” team by payroll spent for each win.  Each of the last few years has had “value” teams performing as contenders.  In 2010, Tampa Bay, Texas, and San Diego spent their money wisely.  In 2011, Texas and Milwaukee spent under 1M per victory and won over 90 games.  In 2012, the Nationals and their MLB-best record came in at less than $900,000 per game while Oakland was performing like Brad Pitt and Jonah Hill put their team together at less than $600,000 per win.   Notice no mention of New York, L.A., Chicago, Boston, or Philly, the general leaders in the total payroll.  Can’t traditional value teams take more pride in doing more with less? 

Diminishing Returns

Overall, it’s hard to say that money doesn’t buy more wins when there is more consistency in total wins over time with higher paying teams. However, it can be shown that there are diminishing returns on the payroll dollar.  In 2012, The Yankees spent roughly 4 times the cash that the Padres did for only 19 more wins. Is 7.9 MILLION DOLLARS PER EXTRA WIN worth it?  It is if you get in to the playoffs.  Uh, oh…The 2012 Angels paid 7.6 million dollars per extra win and didn’t play in the postseason. 

The Gold Standard of the Payroll Argument

The Yankees ranked #1 in payroll all three years and ranked 30th, 30th, and 28th in money spent per win in the same period.  But, potentially more important, they ranked 3rd, 2nd, and 3rd in winning percentage.   There is an obvious trend for the Yankees… you can buy wins, but you can’t buy value.  However, the Yankees are the only large payroll team that was this consistent in the three-year period.  Boston and Philadelphia had wild swings and the L.A. and Chicago teams never lived up to their payrolls in either winning percentage or value.  From that standpoint, you can say that the Yankees consistently do the most with their payroll.  I’ll hold back on the discussion about how that is all going to change for them this year. 

Buying Wins, Overpaying, or Risk-taking?

The 2010, 2011, and 2012 Angels are a perfect example of how spending can go bad.  Between having one of the worst contracts in all of baseball with Vernon Wells and the historic Pujols contract, the Angels have a lot of winning to do before they can creep out of the “overpaying” category.  It’s apparent that all money buys you is expensive players, at least for Angels fans so far.  So, eat it Brewers fans!  The recent deluge of free agent cash hasn’t panned out….yet.

I think I can speak for all of us though when saying that 2013 feels different.  With big salary, but low output players like Santana, Haren, and the plump Bobby Abreu gone, the replacements can hopefully bring in a few more wins.  If they can’t, we’re in for a long couple of years.  Arte Moreno might be in for a bit of buyer’s remorse if his investments can’t start fast in 2013.