$$$$ the good news and the bad news
Don't get distracted by the budget teams that jell briefly


Every year, there are articles like this one, that say "Hey!  Some low-budget teams did good this year!  Payroll doesn't matter as much as we thought it did."  For some reason, Fangraphs has always seemed (to my cursory eye) eager to argue that payroll doesn't matter much.  Can't for the life of me imagine why, but there y'go.

And every once in a while, there are articles like this one, that say "Hey!  Figure it over any decent length of time, and you'll see that payroll explains 50-75% of winning, all by itself."  Tango figured wins against payroll index for the period 1998-2009 -- the chart below -- and found (obviously) a very strong correlation.


Dr. D had never understood why this had been an argument.  I understood much less, what motivated people to hold down the other end of the debate.  I'd challenge them to a $260 roto league, where I get $500 to their $260 .... "Sure!  I could beat you!"  



Kwibbles and Bits

The 2012 Fangraphs article, which had isolated on one year, concluded

However, the evidence is pretty striking – even in an era of expanding television contracts and ever-growing payrolls at the high end of the spectrum, you simply cannot determine which teams are going to be competitive simply by looking at money spent on the Major League roster. There are still inefficiencies to be exploited and ways to create value beyond simply chasing the shiny new toy being auctioned off at the winter meetings.

Spending money isn’t a bad thing, of course, but it certainly isn’t the only thing, and this year, it hasn’t even been that important of a thing.


Although the above summary does tip Dr. D off as to the motivation in arguing this side of the issue.  Throwing $$$ at the problem is crass; any grade-schooler can point at Victor Martinez and say "Gimme gimme!"  It's superior intelligence we want to use to win with.  OK, gotcha.

... oddly enough, Dr. D sympathizes with fans who weary of the "shiny new toy" grab.  A bit.  Hey, Dr. D watches Real Madrid.

But disliking a crass Jon Lester add isn't the same thing as saying you're objectively better off with Blake Beavan. :- )  The readers were alert.  Even in the comments to that article, they quickly pointed out:


I think the biggest potential effect here isn’t that some low payroll teams have good seasons when their farms mature, but that the rich are more able to sustain the success. Can you create a graph showing winning % over the past 15 years and compare that to payroll? I bet the big guys are all perched at the top and the small guys bounce in for a year or two and then drop off, with the exception of the Rays and maybe the Twins for a couple years.  (Exactly - Dr. D.  A few low-payroll teams jell momentarily, and pop their heads up *in a given year* to camouflage the problem.)




"Spending money isn’t a bad thing, of course, but it certainly isn’t the only thing, and this year, it hasn’t even been that important of a thing."

The fact that the correlation between wins and spending is lower this year than in previous years does not mean spending is any less important this year. Rather, it means that the teams that spent less money were better at spending their money than the teams that spent more money.

For another example, think of park factors. There’s a high correlation of playing your home games in a hitters park and scoring a lot of runs. But let’s say that the correlation between park factors and overall scoring decreases in 2013. Would that mean that playing in a hitters park is less important to scoring runs in 2013? No, it just means that the teams that played in hitters parks had poor offenses that year. They still received the same advantages as they had in prior years, they just failed to execute. Similarly, the teams with high payrolls still had the same advantages this year–they just failed to leverage their advantage as well as they had previously.


Tango has persistently tried to get across this point, that you must measure Payroll/Win% correlation across longer periods of time.  Here's another great article on his part.

In fact, the correlation between payroll and win% would be even higher except for pre-arb players.  Payroll has almost no effect on the impact that James Paxton, Brad Miller, and Mike Zunino have on the game.  Set everybody to "pre-arb" and correlation is going to be zero.  And yet, the payroll factor dominates even through the club-controls haze.


Good News, Bad News Dept.

But here's the thing.

Check out that last hyperlink we gives yer, and see who sat #7 in baseball for payroll across the period 1998-2009.  When the M's think they are positioned well, they're not afraid to shove into the poker pot.

What was that V-Mart / Lester scenario that Bat571 had going?  :- )   Here's a cool TNT Free Agent Budget Tool.  Shove in about 5 FA's.  Problem is, who you let go ... noodle around with their little GUI and you'll see.

With the M's new TV deal, it wouldn't surprise us if they stayed top-10 in payroll for a while.  But at this point, they're going to shed some serious talent, if they want to bring guys in.  That's where you (and you alone) see the beauty of the 5-for-1 blockbuster.


Dr D




Agree 100% on the TNT tool. Everyone with an idea for a trade or a FA signing should sit down for a few minutes and try to play GM with it.
I wonder if this is effectively the reason that Scott at Lookout Landing opted out of an 'off season plan' for the M's this year. When wholesale changes are needed, it's fun. When there's already a decent amount of talent, and the decision is which of that talent to jettison, things are more problematic.
Which makes me wonder if the assessment of possible trade partners should not be based foremost on which pieces we covet...but rather on which teams most need an influx of 3-4 promising pieces in exchange for one of their few stars.
Five-for-one, indeed.

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