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Home MLB News The Baseball Analysts Looks at Payroll Efficiency, 2006-2008

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The Baseball Analysts Looks at Payroll Efficiency, 2006-2008 PDF Print E-mail
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Written by Maury Brown   
Monday, 02 March 2009 18:12

MLBEach year, I do a look at MLB from the perspective of Marginal Wins/Marginal Payroll, which looks at the efficiency of how each club spends in a given year.

Last year, Rich Lederer of Baseball Analysts did this using a different method than MW/MP, and came up with some interesting and thought provoking figures.

This year, with a slight nudge from Rob Neyer, it seems, Lederer has done so again, but this time looked at 2006-2008 to see which teams have spent the most efficiently.

Rich contacted me and got end of year payrolls for all the clubs dating back to 2006 (although, I have now published EOY payroll dating back to 2002, albeit with 2004 missing. That data should be available shortly).

Lederer has a great scatterplot graph showing payroll efficiency for each of the clubs over the course of the last three years. Here's some of what Rich reports:

Furthermore, the relationship between payroll and wins is not linear. The difference between the highs and lows of wins (67-94) is much more tightly bunched than payrolls ($27M-$216M), suggesting that marginal wins are significantly more costly than average wins. In other words, going from 70 to 80 wins isn't as important — or costly — as going from 80 to 90 wins. By my count, 68 of the 78 teams that have won at least 90 games during the past 10 years have participated in the postseason. Win 90 and you have about an 87 percent chance of playing beyond the regular season.

Great stuff, but then Rich always does great work. Once again… MLB Payroll Efficiency, 2006-2008

FYI… I will be applying MW/MP to the period from 2002-2006 once the data arrives for 2004 in an upcoming article.

Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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