Baseball is a numbers game. It's a tired cliché, but it's true. Math permeates the MLB, from fantasy leagues to contract evaluation. Still, that doesn't mean our understanding of the sport is perfect. One aspect of baseball that's often overlooked is financial efficiency, or how adept teams are at getting the most bang for their buck.
It's no secret the New York Yankees regularly have one of the biggest payrolls in the league. Last year they spent an eye-popping $228 million on their players, which led baseball.
Did you know, however, that the team finished dead last when accounting for how much its wins actually cost? In terms of payroll dollars, the Yankees paid around $2.7 million for each of their 85 wins in 2013. That's significantly less efficient than a team like the Baltimore Orioles, which also won 85 games, but averaged a cost per win near $1 million.
The contrasting strategies of the Los Angeles Dodgers and Tampa Bay Rays are another example. Both clubs won 92 games last season, albeit in significantly different ways. The Dodgers spent $2.3 million per win, largely due to mammoth contracts doled out to Zack Greinke, Matt Kemp, Carl Crawford, and Adrian Gonzalez. Tampa Bay, by comparison, rostered a whopping 23 players who were paid a salary below the MLB average of $3.4 million last season. The team spent just $620,000 on each win.
As you might expect, there are losers among baseball's most efficient teams. But interestingly, they're in the minority. Just two of the league's top eight finishers in cost per win last year, the Astros and the Marlins, had losing records. The Rays, Pirates, Athletics, Indians, Braves, and Royals -- the other teams in the top eight -- finished above .500. Of this group, only the Royals failed to make the playoffs.
That's remarkable in an era when nine-figure contracts seem to be the norm, not the exception. And if anything, it helps to deflate the misguided theory that the best teams in baseball always spend the most money.
Who's on top in 2014?
This season's Baseball Efficiency Standings -- or "B.E.S.T." for short -- might surprise you.
Currently on pace to finish 75-87, the Marlins are paying an average of just over $635,000 per win. The most expensive player on the Marlins' roster is Giancarlo Stanton, who will be paid $6.5 million this season -- a mere 177th in all of baseball.
Through April, Miami is getting huge value out of Stanton and his teammate Jose Fernandez, who has a 2014 salary below $1 million. Stanton currently leads the National League in home runs and RBIs, while Fernandez is fourth in earned run average and tied for third in wins. Both are under the age of 25, though they're only under contract through the end of this year. Neither will remain cheap for much longer -- if Miami chooses to resign them for the long term, its payroll will assuredly climb higher than 29th in the league.
A 100-win trajectory with efficiency
Two teams on a 100-win trajectory -- the Oakland Athletics and Milwaukee Brewers -- are also among the five "B.E.S.T." teams of 2014. The Brewers boast a modest payroll of $103 million, about $10 million above last season's mark. So how is the team 30% more efficient than it was in 2013?
Put simply, on-field performance. The Brewers are on pace to win 120 games after winning just 74 last year. If it holds, the 46-game improvement would be tops in MLB history, better than the Arizona Diamondbacks' 35-game improvement in 1999. The team's Pythagorean record -- Bill James' statistical estimate of "true" performance -- is 17-10, so the Brewers have been lucky. Don't bet on 120 wins.
The Athletics, on the other hand, are in a similar spot as they were last year, after finishing with the fifth lowest cost per win in the MLB and 96 wins. In monetary terms, the only real difference between the 2013 A's, who won the AL West, and this year's team is a $10 million salary for new closer Jim Johnson. While Johnson hasn't been stellar -- he was demoted three weeks ago -- the A's continue to be efficient. Third baseman Josh Donaldson ($500,000) and starting pitcher Sonny Gray ($502,500) are two of the cheapest players on the team's roster, and they're among the league leaders in home runs and ERA, respectively.
The other side of the coin
Conversely, a handful of teams have underwhelmed mightily in the efficiency department. The Diamondbacks are the most obvious example. After finishing with a .500 record in 2013, Arizona increased its payroll by over $20 million to $112 million, the highest in franchise history. Through one month of the 2014 season, the team is the worst in the MLB, and is on pace to finish a woeful 43-119. Each of these wins is projected to cost more than $2.6 million.
As you might expect, the players responsible for the Diamondbacks' pay increase have largely disappointed. Bronson Arroyo, who makes $9.5 million this season as part of a new two-year deal, is statistically the worst pitcher in baseball to start at least five games. Brandon McCarthy and his $10.2 million salary hasn't pitched much better, and $9.5 million outfielder Cody Ross is hitting just .103. Mark Trumbo ($4.8 million) belted five home runs in his first nine games, but he's out of action for at least two months with a stress fracture in his foot. In baseball, like all things, it pays to be lucky, and Arizona has had none of it lately.
Last year's World Series champions, the Boston Red Sox, have also been inefficient. Currently a game below .500, Boston is paying almost 30% more per win in 2014 than it did last year. It's tough to point the finger at a single player, but it's worth nothing that David Ortiz, who makes $15.5 million this year, is on pace for the second worst season of his career, power-wise. Dustin Pedroia ($12.8 million) has also been a mild letdown at the plate thus far.
In the NL, the Cincinnati Reds are in the same boat. The team is seeking to jump start an expensive offense that's been off lately. Both the Reds and the Red Sox upped their payroll during the offseason, and if current trends hold, each will finish 2014 with a winning percentage more than 100 points below last year's mark.
Baseball's biggest spender is still its least efficient
One trend remains -- as mentioned, the Yankees were baseball's biggest spenders in 2013, and were the least efficient team. In 2014, the largest payroll belongs to the Dodgers, who -- surprise, surprise -- possess the worst efficiency.
The team upped its annual on-field commitments to $235 million -- now the MLB's highest ever -- mostly due to one man: Clayton Kershaw. The 26-year-old two-time Cy Young winner will make $19 million this season, as part of a seven-year $215 million deal through 2020. Rotation mates Zack Greinke and Josh Beckett are also on the books for a combined $45 million in 2014.
Including this trio, the Dodgers hold five of the 25 most expensive contracts in baseball. Even if the team goes 162-0, it would still sport a cost per win outside of the MLB's top 15.
The bottom line
Obviously, payroll isn't the end all-be all measure of financial well-being. In some cases, teams with higher revenue -- whether it's from ticket sales, sponsorships, or television deals -- are simply able to spend more on players. In the comparison between the Dodgers and Rays, for example, the former generates over $300 million a year from its TV contract. The Rays, by comparison, make one-sixteenth as much in annual rights fees.
At the end of the day, though, comparing a team's payroll with its overall record is useful. It's one of the best ways to understand how skilled MLB front offices are at turning dollars into on-field success. And while there are many ways to win, these rankings reveal that from a business standpoint, the best teams aren't always truly the "B.E.S.T" in baseball.
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