Can You Buy Wins In Baseball?

New York Rangers – New York Islanders = $32,265,000

Los Angeles Lakers – Sacramento Kings = $47,539,063

New York Yankees – Pittsburg Pirates = $171,390,389

Above are three simple equations showing the range of team salaries in the National Hockey League, the National Basketball Association, and Major League Baseball respectively. Clearly, Major League Baseball takes home the medal for this one.

Why? Baseball has been all out of whack for a long time; allowing teams to spend wildly, resulting in a disproportionate range of salaries across the league. In fact, the range in salaries for MLB is just below the sum of the top three team salaries in the NHL. In other words: MLB is a financial nightmare.

Not surprisingly, all the heat has fallen on one team. You guessed it, it’s the New York Yankees. Every year, the Yankees spend, spend, spend. $190 million, $200 million, whatever it takes to put together an All-Star team, the Yankees will throw down the cash.

But how much does that cash matter? Could the Yankees’ unlimited sum of cash really result in an astonishing 27 World Championships?

Consider the following graph, which compares each MLB team’s salary against their win total in 2010:

Evidently, there is minimal correlation between salary and wins (a correlation coefficient of just .1218 for all you statisticians).

Thus, we can conclude something very counterintuitive and potentially controversial: you are not guaranteed more wins by spending more money. In other words, you can’t buy wins in baseball.

The typical fan would point to the Yankees as a counter-example. Consistently, the Yankees spend the most money, and consequently, they say, they have won 27 World Championships.

However, there are some counter-counter-examples. The Chicago Cubs spent the third most of any team in 2010, and won just 75 games, finishing 16 games out of first place. The Seattle Mariners spent the ninth most of any team in 2010, and finished 29 games out of first place with the second worst record in baseball.

Conversely, the San Diego Padres spent the second least of any team in 2010, but finished just two games out of first place with 90 wins. Finally, and most famously, the Tampa Bay Rays went to the World Series in 2008 with the second lowest payroll in baseball.

Baseball has been continually criticized for allowing teams to create empires by spending loads of money each year. However, this assertion is surprisingly false: more money does not equal more wins in Major League Baseball.

Nevertheless, a new problem arises. It is ridiculous enough that teams spend so much money on a game, but now we know that they are spending that money for no reason. It’s all pretentious. Sure, the money may help a bit, but if it’s not guaranteeing wins, couldn’t it be better used elsewhere?

Jess is the host of The Seamheads.com Radio Hour, every Monday night at 9pm, Eastern. Contact him at [email protected].

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2 Responses to Can You Buy Wins In Baseball?

  1. Bronx Knight says:

    Nice article, Jess. Another big question, closely related, is … how on earth did the Yankees win 26 of the 97 or so World Series between 1903 and 2000 (and 27 of the 110 between 1903 and 2010)? During this time, there were between 16 and 30 teams in the majors, but the Yanks won about 1/4 of the titles.

    Money can only be a small part of the answer. Additionally, it seems to me that money has only really been an important factor since the inception of free agency in the 1970's. Prior to that time, baseball was basically run as a cartel, with owners colluding to keep down player salaries.

    So how did we do it?

  2. af says:

    Maybe money just works if there's a method to how it's being used. The difference between Cashman and Minaya.