When it comes to running a sports team, there are ultimately several factors that come into play that determine your ability win. Clearly, you have to be able to scout and evaluate talent. After that, getting those players under contract can be tricky. In doing so, it’s critical to make the best use of whatever revenue resources you have at your disposal. Money doesn’t buy championships, but let’s face it, it doesn’t hurt.
How effectively one spends money depends on how large those revenue resources are. While I’m sure that they don’t enjoy spending lavishly, the Yankees have clearly decided year-in-and-year-out to pour a league-leading amount into player payroll in an effort to consistently make the playoffs. They may not ultimately be the most efficient, but if you’re giving yourself a shot at a championship and money rolls in via television and the gate, well… so be it.
On the other hand, if you’re a low-revenue club, your risk increases dramatically. Clubs (normally) pick and choose very carefully when to spend more on player payroll for a given season to try and make a postseason push. Calculate incorrectly, however, and not only will they miss the playoffs but they could potentially kill their payroll flexibility for next season and possibly beyond. Being effective and efficient is what most clubs shoot for.
This year, MLB added two extra wild card teams—one in each league—and with it, playoff odds have increased. You can be double-digit wins out of the division race but be in the hunt for the wild card. (As an example, as of Sunday the Brewers are 13.5 games out of first in the NL Central but just 2.5 out of the NL wild card.)
It seems a quick gut-check of who is spending most efficiently is in order. Based on compensation data here at Baseball Prospectus, the following shows each of the 30 clubs by player payroll, with the addition of cost per win, where they sit in the division and wild card standings, and their current odds of making the playoffs.