One of the biggest complaints of the fans of Major League Baseball is the payroll difference between the haves and the have-nots.   There are complaints how teams such as the Yankees, Red Sox and others can spend almost at will.  There are other complaints that teams such as Pittsburgh and Kansas City cannot compete because they do not have the same resources.  There are complaints that the teams with all of the money always win and those without it have no chance.  I have decided to see if that is true, and if so, to what extent. 

I reviewed information for the last twelve seasons of Major League Baseball (2000-2011).  I reviewed the payroll for each organization during each season listed above.  I used the website Cots Baseball Contracts from Baseball Prospectus for all team salary information.  The website tracks all major league contracts and is unofficial.  However, I used the website for consistency.  It is a great site.  Check it out.

For all team records and won-loss information, I used Baseball Reference.  This is the baseball encyclopedia on the internet.  You need something, look it up there.

Back to the information…

I reviewed each team for twelve seasons in terms of wins and salary.  I broke it down by team and by that team’s payroll for the respective season. Basically, this became a huge spreadsheet so I can review the information anyway I want.  I was able to look at each team’s payroll, wins and dollars spent per win for each season.  I did this for 30 teams and 12 seasons, 360 total breakdowns.  I was also able to look at each season, calculated the total payroll spent and the average dollars spent per team.  I was also able to look at each organization and see how they fared over the past twelve seasons and how their salary changed throughout these seasons.

I separated data for each season’s playoff teams, wild card and division winners.  I calculated their average payroll.  I did the same for the Championship Series participants and the World Series participants.

Here is some background information for you to digest.  In 2000, the total of all 30 team’s payrolls was $1.700 billion dollars ($56.693,820.20 per team).  By 2005, the payrolls increased to $2.192 billion ($73,062,896.60 per team) and in 2011 the payrolls topped at $2.877 billion ($95,888,881.30 per team).  That is a 41% increase in 12 years.  At the same time, there are 13 organizations that spent at least $1 billion (BILLION) on payroll in the past twelve seasons while nine teams spent less than $750 million during the same time frame.  The discrepancy between the top spending team and the lowest spending team is over $1.651 billion.

It can be assumed that with each team playing a 162-game season that the average team would win 81 games per season (there are suspended games and rainouts that minimize that number slightly, so please do not get on my case if there are slight number discrepancies).  Get a load of these numbers.  In 2000, there were 2428 victories.  Dividing the total payroll for all 30 teams by the number of games won by those 30 teams will show that the average team spent approximately $700,000 per win.  In 2005, that number jumped to $890,000 per win and in 2011 the value was $1,183,000 per win.  Looking back at the 13 teams that spent at least $1 billion on salary, combined they averaged nearly 86 wins per season.  The nine teams that did not spend $750 million averaged a combined 77 wins per season.

How does each team break down when looking at dollars spent per victory;

Chicago White Sox – $998,000 per 1,024 victories

Cleveland Indians – $803,000 per 965 victories

Detroit Tigers – $1,102,000 per 905 victories

Kansas City Royals – $736,000 per 810 victories

Minnesota Twins – $718,000 per 1,020 victories

Baltimore Orioles – $1,046,000 per 843 victories

Boston Red Sox – $1,366,000 per 1,099 victories

New York Yankees – $1,823,000 per 1,157 victories

Tampa Bay Rays – $585,000 per 881 victories

Toronto Blue Jays – $854,000 per 971 victories

Los Angeles Angels – $1,078,000 per 1,066 victories

Oakland A’s – $641,000 per 1,045 victories

Seattle Mariners – $1,116,000 per 965 victories

Texas Rangers – $916,000 per 962 victories

Chicago Cubs – $1,259,000 per 953 victories

Cincinnati Reds – $808,000 per 921 victories

Houston Astros – $999,000 per 964 victories

Milwaukee Brewers – $759,000 per 914 victories

Pittsburgh Pirates – $645,000 per 810 victories

St. Louis Cardinals – $971,000 per 1,089 victories

Atlanta Braves – $1,039,000 per 1,072 victories

Miami (Florida) Marlins – $474,000 per 963 victories

New York Mets – $1,425,000 per 971 victories

Philadelphia Phillies – $1,025,000 per 1,049 victories

Washington Nationals – $1,100,000 per 860 victories

Arizona Diamondbacks – $918,000 per 964 victories

Colorado Rockies – $847,000 per 925 victories

Los Angeles Dodgers – $1,201,000 per 1,024 victories

San Diego Padres – $689,000 per 930 victories

San Francisco Giants – $991,000 per 1,033 victories

What do all of these numbers tell me?

There were 11 teams that won over 1,000 games in the 12 seasons studied.  Looking at the cost per win, the team that spent the least per victory is the Oakland Athletics ($614,000…maybe Moneyball actually works?) and the Minnesota Twins ($718,000).   The Yankees, who have won the most games, 1,157 in 12 seasons while spending $1,823,000 per victory.  On the other side, teams that have not won over 1,000 games in these 12 seasons have spent as little as the Pirates ($645,000 per victory) or the Marlins ($474,000) per victory.  These teams do not spend and their lack of wins indicates that as well.  However, it shows that money does not always means wins as the Mets ($1,425,000), Mariners ($1,123,000), Tigers ($1,102,000), Orioles ($1,046,000), Cubs ($1,259,000) and Nationals ($1,100,000) all spent over $1 million per victory for 12 seasons while not averaging 83.33 wins for those twelve seasons studied.  Some spend well, others do not.

Now for the breakdown of the playoff teams.

In each year, from 2000 to 2011, the average playoff team spent more on salary than the league salary average.  In 2001, the average of the eight-playoff teams payroll was 5% above the league average (lowest in the twelve seasons) and in 2004, the eight-playoff teams spent 46% more than the average team.  And, for all 12 seasons, the eight-playoff teams spent an average of 21% more on salary than the league average.  Therefore, the average playoff team spends an average of 21% more than than the league average on salary.

Which teams have spent 21% more than the league average for salary in the 12 seasons studied?  The teams that have averaged more than 21% than the average salary are the Red Sox (60%, playoffs six times), Yankees (124%, playoffs eleven times), Angels (22%, six times), Cubs (26%, three times), Mets (44%, two times) and Dodgers (30%, four times).

The teams with a higher than average payroll (and less than 21% above average) for the past twelve seasons were the White Sox (7%, 1 time), Tigers (7%, two times), Mariners (14%, two times), Cardinals (11%, six times), Braves (17%, one time), Phillies (17%, three times), Giants (7%, two times).

On the other side, the six teams that have spent the least compared to the salary league average are Marlins (48% of league average, playoffs one time), Tampa Bay Rays (55% of league average, three times), Pittsburgh Pirates (55% of league average, zero times), Kansas City Royals (62% of league average, zero times), San Diego Padres (67% of league average, two times) and Oakland A’s (69% of league average, five times).

The teams that spent more than the average payroll in the past 12 seasons made the playoffs 69% of the time.  Of the 96 teams that made the playoffs in the past 12 seasons, 66 of them had spent more than the average.  Spending money on payroll gets you into the playoffs with twice the frequency of those teams that do not.

But, does spending money guarantee playoff wins?

There were two seasons in the last 12 seasons in which the Championship Series combined participants (Wild Card Series winners) averaged less than the league average, 2002 and 2007.  During the twelve seasons studied, there were five seasons in which the team’s payrolls averaged at least 25% more than the league average.  In fact, the 48 Championship Series participants in the 12 seasons studied spent on average more than 25% greater than the league average.   Money equals wins, playoffs and participation in the Championship Series.

In fact, of the 48 teams that participated in the league Championship Series, 35 of them averaged more than the league salary average.  So, does spending money guarantee playoff wins?  73% of the time, spending more than the average payroll will get you into the Championship Series.

The World Series continues the trend.  The average World Series participant’s payroll is 23% higher than the average salary over the past 12 seasons.   Lets take a look at the payrolls of the 24 teams that have participated in the World Series in the past 12 seasons.  18 of the 24 (75%) have payrolls greater than the average.  The information also shows that 83% of the time, the World Series winner spends more than the average on payroll.  The 12 winners averaged a payroll 32.5% greater than the average payroll and the World Series loser averaged 13.5% greater than the average payroll.  Also, within the past twelve seasons, there was no season in which both teams in the World Series had payrolls less than the average payroll.

2011 – St Louis Cardinals (14%), Texas Rangers (-4%)

2010 – San Francisco Giants (5%), Texas Rangers (-31%)

2009 – New York Yankees (127%), Philadelphia Phillies (27%)

2008 – Philadelphia Phillies (10%), Tampa Bay Rays (-51%)

2007 – Boston Red Sox (73%), Colorado Rockies (-34%)

2006 – St. Louis Cardinals (15%), Detroit Tigers (7%)

2005 – Chicago White Sox (3%), Houston Astros (5%)

2004 – Boston Red Sox (84%), St. Louis Cardinals (21%)

2003 – Florida (Miami) Marlins (-36%), New York Yankees (115%)

2002 – Anaheim Angels (-9%), San Francisco Giants (16%)

2001 – Arizona Diamondbacks (14%), New York Yankees (50%)

2000 – New York Yankees (90%), New York Mets (41%)

In Major League Baseball, salary and payroll does equal wins.  The numbers for the past twelve seasons prove it.  As a review:

69% of the playoff participants (66 of 96) in the past 12 seasons have spent more on payroll than the average.

The combined playoff teams averaged a payroll of 21% greater than the average.

Of the teams that won the Wild Card Series (35 of 48) in the past 12 seasons, 73% of the participants spend more on payroll than the average

The combined Championship League teams averaged a payroll of 25% greater than the average

75% of the World Series participants (18 of 24) in the past 12 seasons have spent more on payroll than the average

The combined World Series teams averaged a payroll of 23% greater than the average

The 12 World Series winners averaged a payroll 32.5% greater than the average payroll and the losers spent an average of 13.5% greater than the average team.

The winning World Series team averages a payroll greater than the average 83% of the time

Major League Baseball salaries have increased 41% from 2000 to 2011, with a $1.651 billion difference between the top spending team and the least spending team for the 12 years studied

Teams that spent at least $1 billion over the past 12 seasons have averaged nine wins per season more than the teams that spent less than $750 million during the same time period

Here is some other information:

The Chicago White Sox went from a team that spent almost half of the average payroll in 2000 to a team that spent more than 30% above the average in 2008

The Cleveland Indians went from a team that spent 25% more than the average in 2001 to a team that spent 25% less than the average in 2007

The Minnesota Twins went from a team that traditionally spent less than the payroll average until 2010, when Target Field was opened.  In 2011, the Twins spent 18% more than the average

The New York Yankees (11 times) and the Boston Red Sox (7 times) have made the playoffs more than anyone in American League in the past 12 seasons, they have also spent the most on payroll, a combined $3.6 billion

The Atlanta Braves averaged a payroll 34% greater than the average from 2000 to 2005, in 2010 they averaged 10% less than the average

The St. Louis Cardinals made the playoffs eight times in the past 12 seasons with a payroll averaging only 11% more than the average payroll over that time.  They have spent $400 million less than the Red Sox and made the playoffs one more time

From 2000 to 2006, the Philadelphia Phillies did not make the playoffs and had a payroll average just slightly above the average payroll.  From 2007 to 2011, they averaged 33% above the payroll average (including 73% above average in 2011).

The Arizona Diamondbacks made the playoffs in 2002 spending more than 50% above the average on payroll.  In 2011, they spent 41% less than the average and once again made the playoffs.

In 2011, Major League Baseball spent $2.876 billion on salary, more than the Gross Domestic Product of 30 countries