Baseball may be a game of inches, but it’s also very much a game of dollars and cents. With no hard salary cap, Major League Baseball is “the closest thing to a free market” among our major sports, says Jack Ablin, chief investment officer of BMO Private Bank in Chicago.
“Therefore,” Ablin wrote in an email before baseball’s All-Star break, “it stands to reason that ‘large market’ teams, which can afford the most talented players, should win the most games.”
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Only it doesn’t play out that way. Sure, money can buy teams plenty of added opportunities — the luxury of not having to be devastated by a bad contract, the ability to add a high-priced veteran or two for the stretch run — but a high payroll doesn’t always translate to wins. Low payrolls, on the other hand, can make it harder for clubs to compete.
“So what does it take to have a winning record?” Ablin asks. “Based on current salary figures, our model suggests it takes about $95 million in the American League and $113 million in the National League to eke out more wins than losses in 2014.”
Only there are plenty of exceptions that don’t fit the model.
Yes, the Los Angeles Dodgers, whose payroll of $235 million is the highest of any team, have the best record in the National League at 54-43, for a .557 winning percentage. But the Milwaukee Brewers are right behind them, at 53-43 (.552). The Philadelphia Phillies, meanwhile, are mired at the bottom of the NL East despite carrying enough high-priced veteran players to rank as the third-highest payroll in the game.
In the American League, the Oakland A’s — known for their perennially low payroll and, consequently, for being the birthplace of “Moneyball” — have put up the best record in all of baseball despite having the fourth-lowest salary total of all 30 clubs. At the other end of the spectrum, the Boston Red Sox and Texas Rangers have underperformed the level of success their payrolls might have suggested. At least Boston fans will always have last year.
At the unofficial midway point of the 2014 season, here are Ablin’s breakdowns of the teams and how they have performed compared to what their salary totals might suggest.
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