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October 23, 2012

Bizball

2012 MLB Postseason Shows Money Matters

by Maury Brown

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I don’t care how many times you’ve heard it, but money matters in sports. Somewhere along the line, maybe starting with a book by some guy named Lewis about the A’s, someone confused “money doesn’t win championships” for somehow meaning that money doesn’t matter if you want to be competitive. That’s never been true.

We can haggle over this a bit. There’s empirical evidence—a good bit of which comes from this current season—that a team can get into the playoffs without having a massive player payroll. After all, there was “Moneyball” then, and someone will say we saw a new form of “Moneyball” in Oakland this season. But as Nate Silver and Dayn Perry said so eloquently in Baseball Between the Numbers, Billy Beane’s shit hasn’t worked in the postseason. In truth, having money helps if you wish to go deep into the playoffs.

The past few seasons, this has been less evident. The LCS last year was comprised of the Brewers (ranked 17th in payroll with $85,497,333), Rangers (ranked 13th with $92,299,264), Cardinals (11th with $105,433,572), and Tigers (10th with $105,700,231), leaving the 11th and 13th ranked teams by player payroll in the World Series. In 2010, the LCS featured the Rangers (27th with $55,250,544), Giants (ninth with $98,641,333), Yankees (first with $206,333,389), and Phillies (fourth with $141,928,379). With a Giants/Rangers World Series, that meant no team competing in the championship series had a player payroll over $100 million.

This year, however, this is not the case. With the exception of Oakland, nine of the ten teams that made the postseason had player payroll in the top 20, and all of the LCS teams were in the top eight, not one of which came in under $110 million. The 2012 World Series features the Tigers, with the fifth-ranked Opening Day player payroll of $132,994,000, and the Giants, with the sixth-ranked payroll of $131,980,298. If there is a “glass half full” feeling for the league, it’s that along with the A’s, there were four playoff teams (Nationals, Braves, Reds, and Orioles) that were within the middle third of the league by player payroll:

Commissioner Selig and others (this author included) have said that the league is experiencing incredible parity in the number of teams that make the postseason. That’s true. After that point, however, it shifts. When you think about it, this is a nice side-effect for the league. Selig can rightly say that every team has a shot to make the postseason, while FOX and TBS have been able to ensure good national television ratings as large-market teams and storied franchises make deep runs into the playoff. In that, it’s been a win-win.

Money matters. It always has. There hasn’t been a GM that sat back and said, “You know what Mr. Owner, I don’t need the extra resources that you’re offering.” The point is money never hurts. And while there are GMs and execs that will always say they've spent wisely, they sometimes don't. What money gives you is a buffer. Or, rather, what sustained revenues give you is margin. You can take more risks and you can more easily blunt the blow if some of the decisions you make don’t turn out as planned. Conversely, the club that has limited resources is always at greater risk if it makes mistakes. To quote the poet laureate Brian Johnson of AC/DC, money talks.

What money really gives you is flexibility. It allows you a greater chance of being competitive now and sustaining that competitiveness in subsequent years.

The problem has always been the ability of each of the 30 clubs to have a steady flow of revenues to work from. Yes, everyone is pulling in record revenues, but not all at the same rate. The key is "cost certainty." Clubs that have generational fan bases—Yankees, Red Sox, Phillies, Cubs, etc.—will, for the most part, generate a fairly steady flow of ticket revenues. When you throw in media rights (see recent television deals for the Rangers, Angels, and soon the Dodgers), it becomes a formidable force that the likes of Tampa Bay, Pittsburgh, and Kansas City can’t compete with. Those teams have to rely on the draft process, and certainly the Rays have shown that you can actually be competitive for more than a season or two under these constraints, but it isn’t easy and it’s not something to expect from every club. A club has to be smart. A club has to be positioned to spend when it can spend. And for heaven's sake, a club can’t be in a lengthy rebuilding process to do it. In other words, if a club is in the cycle, it can’t make too many mistakes that inhibit its ability to spend what little it may have available in the free agency space when the opportunity presents itself.

So, while it’s just one year, how does player payroll equate to winning when it comes to the postseason? I hesitated (greatly) with this considering how tight the LCS series were; a play here or there could have easily changed the outcomes. Still, it’s an interesting look. I had assumed that there would be more variance before plugging in the numbers, but with one glaring exception, the team with the higher player payroll (which, theoretically could equal a more talented roster ) won each series. Here’s a look.

The wild card play-in didn’t really follow our pattern, but it’s just one game in which a team’s rotation isn’t even really tested. This has been a common argument by some in regard to the new Wild Card format; at the very least, perhaps a three game series should be employed. It would have been interesting to see how each of these teams would have fared in that format and how the Rangers might have performed.

After that, each series went to the club that had the higher player payroll with, yes, that glaring exception. The Yankees, who had the worst team batting average (.188) in a seven-game series since the playoff format was introduced, were swept by the Tigers. Despite letting outfielder Magglio Ordóñez, infielder Carlos Guillén, and starting pitcher Brad Penny leave via free agency and releasing Brandon Inge, the club increased payroll nearly 25 percent this season (good for fifth in the league) thanks to Prince Fielder’s nine-year, $214 million deal. Still, the difference in player payroll between the two clubs was staggering—$76,568,900 less than the Yankees.

What will be interesting is seeing how this plays out in the World Series. The Tigers and Giants (fifth and sixth by total player payroll) show a difference of just $1,013,702, leaning to the Tigers. The question will be how those dollars are invested.

The Tigers are an interesting study in distribution. The team’s three biggest contributions all make up a relatively equal portion of their payroll pie: Fielder ($23 million) takes 17.29 percent, Miguel Cabrera ($21 million) takes 15.79 percent, and Justin Verlander $20.1 million) consumes 15.11 percent.

For the Giants, the distribution is spread wider and leans more toward pitching than position players. The top three by pay on the roster for 2012 are starters. Barry Zito, who shined in Game Five, is still the club’s highest-paid player ($19 million, or 14.4 percent), followed by Tim Lincecum ($18.25 million, or 13.83 percent), and Matt Cain ($15,833,333, or 12 percent), who shut down the Cardinals in Game Seven. From there, Aubrey Huff ($10 million) is at 7.58 percent while Brian Wilson ($8.5 million), who has been on the DL, makes up 6.44 percent.

The most important thing isn’t the ‘how much’; it’s the output each player provides compared to his salary that counts.

As total player payroll goes, a team’s chances of winning go up the more they dole out. It is not an absolute truth, but what is inarguable is that high player payroll affords a team a better chance of being competitive. Money doesn’t win championships, but it does give a team a better chance at winning than if it didn’t have as much to toy with. We’ll see if money talks in the World Series or not, but as the 2012 postseason has shown, it really already has.

Maury Brown is an author of Baseball Prospectus. 
Click here to see Maury's other articles. You can contact Maury by clicking here

Related Content:  The Who,  Payroll,  The Process,  Money

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