MLB: Does Payroll = Success?

May 21, 2008

In Major League Baseball, does a heavy investment in team payroll translate into success? How do teams measure “success,” for that matter? If the beancounters are consulted, success = high attendance. If fans are consulted, success = a winning team, or at least exciting baseball games to attend, with a hope of contending. Owners undoubtedly measure success by high revenues collected through a combination of ticket sales (where shared gate revenue can add up when your team has a loyal following around the country like the Red Sox Nation or fans are simply clamoring to see a once-in-a-generation talent like Barry Bonds), TV contracts (like the lucrative YES network for the Yankees), corporate sponsors, revenue sharing costs, stadium rent, and club standing in the league all figure in.

Major League Baseball is currently enjoying NFL like monetary success with team owners, “getting rich like never before. During 2007, revenue for MLB’s 30 teams went up 7.7%, to $5.5 billion. The average team is now worth $472 million, 9.5% higher than last year and 143% more than when Forbes first calculated team values in 1998. Again the Bronx Bombers sit atop baseball with a value of $1.3 billion. George Steinbrenner, who paid $10 million for the team in 1973, could probably teach Warren Buffett a thing or two about investing.”

So, the question remains, does significant monetary investment via payroll translate into a winning season? Below is a breakdown of current league standings with, compared with player payroll and average attendance. (Current Standings and Average Attendance are ytd 2008 - half hearted apologies for the uneven alignment of the numbers I blame wordpress.)

AL East                             Payroll                    Rank      Ave. Attendance
Boston RedSox               $133,440,037                1                    37,594
Tampa Bay Devil Rays    $43,820,598                  2                    18,445
Baltimore Orioles           $67,196,248                   3                     22,933
Toronto Blue Jays           $98,641,957                  4                     25,485
New York Yankees         $209,081,579               5                     50,981

AL Central
Chicago WhiteSox          $121,152,667                  1                      25,789
Minnesota Twins           $62,182,767                    2                      24,677
Cleveland Indians          $78,970,067                    3                      23,109
Kansas City Royals        $58,245,500                    4                       18,616
Detroit Tigers                $138,685,197                  5                       37,726

AL West
Los Angeles Angels      $119,216,333                  1                        39,438
Oakland Athletics         $47,967,126                    2                        19,954
Texas Rangers              $68,239,551                    3                        22,880
Seattle Mariners            $117,993,982                 4                        26,472

NL East
Florida Marlins               $21,836,500                 1                         14,973
Atlanta Braves                $102,424,018               2                         29,648
Philadelphia Phillies       $98,269,881                 3                         38,864
New York Mets               $138,293,378              4                         49,625
Washington Nationals    $54,961,000                 5                         29,154

NL Central
Chicago Cubs                $118,595,833               1                         40,035
St. Louis Cardinals        $100,624,450               2                          40,846
Houston Astros             $88,930,415                  3                          33,793
Milwaukee Brewers        $81,004,167                4                          33,822
Pittsburg Pirates            $49,365,283                  5                         16,283
Cincinnati Reds             $74,277,695                6                          21,169

NL West
Arizona DiamondBacks $66,202,713                1                          28,047
Los Angeles Dodgers    $118,536,038              2                          46,533
Colorado Rockies          $68,655,500                3                          32,276
San Francisco Giants     $76,904,500                4                          33,544
San Diego Padres          $73,677,617                5                          30,852

The Diamondbacks, Marlins, A’s, Twins and Devil Rays (all small market teams) are all at the top of their divisions and with the lowest (or 2^nd lowest) respective payrolls in their divisions. However, most of these teams also draw low attendance even though they’re at the top of their respective divisions, so winning doesn’t necessarily translate into larger crowds and more money for the owner(s). Conversely, the WhiteSox, RedSox, Angels and Cubbies all have large payrolls, are ranked number #1 in their division, and enjoy solid attendance numbers.

Therefore, it seems that success has more to do with the market in which the team is located, the stadium, a loyal fan base, big names on the roster and a glimmer of hope in the standings than it does with winning on a shoe string budget. Fans, who today pay a lot to go to these games, like to see familiar faces and big names in nice parks. Winning is still important to fans, but a loyal base and big market (see the Yankees) will keep the stadium packed even if they suck.

It bears noting that all of these numbers are reflective of an early season. With the NBA and NHL playoffs in full swing, baseball is taking a back seat to these sports until the All Star Break. Let’s look at the numbers again in the fall and see where the teams stand then.

Tags: MLB, Payroll Success
Categories: Sports
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Dumb & Dumber

As the 3 month long NBA Finals begin D&D try and tackle who will emerge with the Larry O'Brien Trophy when it's all said and done.

Dumb

After being humiliated in the Finals last year by Boston (you know expectations are high when losing 4-2 without your starting center is considered humiliation), the Los Angeles Lakers have but one objective this year: Win It All. Anything less would be a failure. So, after bringing the gold medal home for all Americans in Beijing this past summer, Kobe has the sole focus of bringing the gold Larry O'Brien trophy back where IT belongs: The City of Angeles. And make no mistake about it, with KG sidelined with a bum knee, the Lakers are the best team in the NBA, and the best team always wins. The only team that can really give the Lake Show a run for their money is The LeBrons, aka the Cleveland Cavaliers. I agree that LeBron is the best player in the game. But history shows that the best TEAM wins the Finals, not the best player. That's why the Spurs have won 4 titles in the last 10 years, it's why Detroit won in 2004 and it's why the Celtics won last year. Assuming the Cleveland vs. Lakers scenario plays out, the Lakers will undoubtedly have the best team between the two. Last year, they were without Bynum and Trevor Ariza, and were playing with Gasol for only 1/2 season, and came within 2 games of winning it all. This year, with the core of the team healthy, both Ariza and Lamar Odom (not to mention Kobe) available to D up King James, and a supporting cast that is deeper and better from 2-12 than Cleveland, the Forum Blue & Gold will be poised to hoist the trophy once again. LeBron will have to wait at least another year to claim his crown and Kobe, ala Steve Young, can finally take that monkey off his back, earning his first title without Shaq.

Dumber

I gotta go with the Cavaliers. I know Dumb is picking the Lakers. He loves them so much he probably wishes he could be the girl Kobe raped in Colorado - just to say he “had some champion in him”. LeBron’s got home court advantage, meaning he’ll throw white powder in the air like Boston George at a Peter Frampton concert. Aside from the ridiculous talent, admittedly mostly possessed by LeBron, they have chemistry and play as a TEAM (unlike the Lakers, who play because they might get their dicks sucked after the game by Laker Girls - can’t blame em). True, the Cavs need Ben Wallace and HoMo Williams to ensure victory over Bean Town or LA, but I’m very sure LeBron is PISSED about last year — His time has come

White Noise

Homeless & Their Pets Rant: Why in the hell do homeless people always have dogs? I assume it is some kind of a begging tactic, but what the hell? PETA wants to hang Michael Vick by his balls, yet any dreadlocked idiot who cannot take care of him/herself has a cute little puppy. My parents wouldn’t let me get a dog until I was 14 or so and we had a house with power, a yard, access to dog food and only smoked crack on the weekends (you know - normal). So I’m at the DMV the other day (talk about the LCD of society), I step outside due to enjoy my 1.5 hour and what is it I see at the park? Numerous homeless with dogs. Are these poor things fed? Are they constantly getting brown weed smoke blown in their faces? If you can’t have at least a crappy apartment and a form of income, you shouldn’t have a dog. I guess the one good thing is since these people don’t work, they can spend all day with the dog. Also, since they live outside, I guess you don’t have to worry about the dog being taken out to the bathroom. Regardless, I don’t effing get it. Maybe it is for companionship, but since there are roughly 12,500 homeless in SF, I figure they can all hang out and leave poor fido out of it.