Does Money Buy Wins In Baseball?
The Baseball Analysts have undertaken a very interesting analysis of Major League payrolls and how they correlate with wins. What they found was very interesting. They took the payrolls over the last 3 years and each team’s wins over that time and divided them out to produce a chart that shows exactly what you would expect: There is a correlation between money spent and wins.
As you can see, the Cubs have been slightly less efficient than the norm based on what they’ve spent. Based on wins per dollar, the Cubs are about 6 wins a season worse than they should be. They are 5th in money spent, yet only 12th in average wins.
The main outlier in terms of inefficiency on this chart appear to be the Yankees. I can’t even figure out how many wins their payroll should correlate too (120? 125?). On the flip side, the Marlins and the Rays are the most efficient, spending far less per win than any other team.
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Comment from Golan
Time March 3, 2009 at 3:32 pm
AMMENDMENT: Okay, FLA is farther southeast from the blue line then MIN, however, FLA still remains below the average Wins. Given that qualitative factor in combination with the quantitative evidence, and I still believe MIN is the most efficient.
Comment from Jordan
Time March 3, 2009 at 5:23 pm
I agree with Golan to a large extent. I think Minnesota has been by far the most efficient team in baseball in terms of spending/winning for the past 10 years and these statistics only serve to support that proposition. Having players like Brad Radke and Justin Morneau forgo free agency in favor of giving the Twins home town discounts has not hurt either. From a purely statistical standpoint looking only at this chart it would seem to me that the Angels, Twins, Indians and Marlins are the 4 teams that have done the best in terms of getting the most out of their spending.
However, this chart fails to take into account other spending and simply looks at wins vs. player payroll, which in reality is only a portion of the overall spending budget of the teams. Things such as a managers contract, General Manager and all of his staff salaries, and especially money spent on signing foreign born players have a huge impact and are not accounted for in the data given. The Angels for example gave a 3 million dollar up front bonus to Kendry Morales (Cuban defector) 2 years ago and have given other similar large bonuses to 16 and 17 year olds out of the Dominican and Puerto Rico….but these numbers are not accounted for in the graph above. Other teams are also doing this of course, to varying degrees.
Comment from Stormin’ Norman Disciple
Time March 3, 2009 at 5:29 pm
You both make excellent points. This chart/data is obviously very limited, but is still interesting to look at. You guys seem to be saying that perhaps more money being spent for wins as the win total gets higher should be considered efficient. While I agree with that sentiment, this chart is looking only at the amount of wins vs payroll. In that context, I am pretty sure Florida is getting the most wins per dollar.
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Comment from Golan
Time March 3, 2009 at 1:47 pm
I disagree with your analysis. The % range between the salaries and Wins is such that a relatively slight change in payroll makes for a huge difference between money spent per win. So if you have a low payroll, even if you don’t win that many games, you can still have a very low payroll per win ratio. Therefore, I believe the ideal position would be as far to the right of the average wins, combined with being far below the average payroll. Ideally, you want to have as large of a deviation southeast from the blue line as possible. Therefore, in my opinion, Minnesota has been the most efficient team.