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October 6, 2003

Marginal Dollars Per Win, 2003

The Best vs. Worst Spenders

by Doug Pappas

As I've previously written, a good way to judge the efficiency of a team's front office is to compare the amount it spends on players to the number of wins it registers beyond that which could be attained by fielding a replacement-level club on which everyone earned the major league minimum salary.

To compute this, I've assumed that a replacement-level club would play .300 ball, which translates to 48.6 wins in a 162-game season. A club's "marginal wins" thus equals ((winning percentage -.300) x 162). For marginal payroll, the baseline assumes a 25-man active roster and three-man DL with everyone earning the major league minimum of $300,000, which would produce a payroll of $8,400,000.

As several people have reminded me, the 2003 Tigers broke the formula. Their 43-119 record is worse than I had thought possible--the first team in 40 years to finish with a sub-.300 winning percentage. How bad were the Tigers? Compare them to the last two clubs to lose as many as 110 games: the Montreal Expos and San Diego Padres, who both finished 52-110 (.321) in their inaugural season of 1969.

The Expos and Padres were awarded their franchises on May 27, 1968, less than 11 months before they played their first major league game. Here's how Baseball America's The Baseball Draft: The First 25 Years described the Expos' participation in the June 1968 amateur draft:

The Expos' selections were made by Gerry Snyder, the chief drumbeater in Montreal's bid to land an expansion team and the No. 3 man in the Montreal municipal government. The team hadn't had time to hire a single front office official. Snyder worked from scouting reports other teams were willing to share with him.

After the season, the Expos and Padres stocked their rosters by drafting three players from each of the other 10 National League clubs. Each club could protect 15 players in its organization during the first round--enough to protect its entire projected 1969 starting lineup, plus four starters, two relievers and a not-quite-ready prospect--then could pull back three additional players after each selection. As a result, the Expos and Padres started play with their rivals' 16th, 20th, 24th, 28th, 32nd and 36th best players, no minor league system to draw upon, and no way to sign additional talent through free agency. If those aren't replacement-level teams, I don't know what is.

They still finished nine games ahead of the 2003 Tigers.

Now let's look at the rest of the majors, division by division:


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

BAL   .438    22.4      $ 69,452,275  $ 61,052,275  $2,725,548
BOS   .586    46.4      $ 96,631,677  $ 88,231,677  $1,901,545
NYY   .623    52.4      $149,710,995  $141,310,995  $2,696,775
TB    .389    14.4      $ 19,630,000  $ 11,230,000  $  779,861
TOR   .531    37.4      $ 51,279,000  $ 42,879,000  $1,146,497

Notes: Marginal wins = ((winning percentage .300) x 162)
Marginal payroll = (opening day payroll - (28 x $300,000))

The big news here is that the Yankees are threatening to pass Baltimore as the least efficient team in the AL East. New York's Opening Day payroll included seven players earning more than $10 million and seven more earning $5-$8 million. Baltimore loses $19 million from its 2004 payroll now that the Albert Belle and Scott Erickson contracts have finally expired, while the back-loaded long-term contracts the Yankees gave Derek Jeter, Jason Giambi, Mike Mussina, and Jorge Posada will keep their payroll growing for years to come. These four are collectively due raises of $9 million in 2004, $7 million in 2005 and $9 million in 2006. (Joe Sheehan, avert your eyes: Jeff Weaver is also guaranteed raises of $2.1 million in 2004, $3 million in 2005.) By contrast, the Red Sox were able to reduce their Opening Day payroll by nearly $12 million while holding onto their nucleus of big-name talent and improving at every other position. Carlos Delgado accounts for more than a third of Toronto's Opening Day payroll, while Tampa Bay paid $12 million to Rey Ordonez and Ben Grieve, $7.6 million to everyone else combined.


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

CWS   .531    37.4      $ 51,010,000  $ 42,610,000  $1,139,305
CLE   .420    19.4      $ 48,834,833  $ 40,434,833  $2,084,270
DET   .265    -5.6      $ 49,163,000  $ 40,763,000  Infinite
KC    .512    34.4      $ 40,518,000  $ 32,118,000  $  933,663
MIN   .556    41.4      $ 55,605,000  $ 47,205,000  $1,140,217

OK, how many of you picked the Minnesota Twins to have the AL Central's highest payroll? Say what you will about Carl Pohlad (I certainly have), but the Twins reinvested their revenue-sharing money just as they were supposed to. The Twins and White Sox got exactly the same bang for their buck, providing additional ammunition to those who believe that White Sox cheapness may have cost them an easily winnable division. Cleveland's relative inefficiency is natural for this stage in the rebuilding process, when they're still paying big bucks to players like Ellis Burks and Omar Vizquel who will be retired before the Indians next contend. Kansas City got lucky, to be sure, but Wal-Mart honcho David Glass can be proud of the way he squeezed value out of a payroll almost $9 million less than hapless Detroit.


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

ANA   .475    28.4      $ 79,031,667  $ 70,631,667  $2,487,031
OAK   .593    47.4      $ 50,360,833  $ 41,960,833  $  885,250
SEA   .574    44.4      $ 87,184,500  $ 78,784,500  $1,774,426
TEX   .438    22.4      $104,526,470  $ 96,126,470  $4,291,360

The AL West didn't quite finish in reverse order of its payroll, as it did in 2002, but it came close. Once again Oakland, the most efficient spenders over the past four seasons, led all contenders in marginal dollars per marginal win. If the Moneyball class of draftees develops, there's no reason they can't maintain this "anomaly" for another three or four years. Seattle, like the White Sox, took considerable criticism for not increasing their payroll at mid-season; their relative efficiency, coupled with sky-high local revenues, suggests that they could have. Anaheim suffered from having to pay its players like world champions despite receiving sub-.500 performance, while the $25 million the Rangers paid Chan Ho Park, Rusty Greer, Jeff Zimmerman and Todd Van Poppel could just as well have been spent helping Nigerian businessmen reclaim money trapped in their homeland.


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

ATL   .623    52.4      $104,622,210  $ 96,222,210  $1,836,302
FLA   .562    42.4      $ 48,368,298  $ 39,968,298  $  942,649
MON   .512    34.4      $ 51,949,000  $ 43,549,000  $1,265,959
NYM   .410    17.8      $116,868,613  $108,468,613  $6,090,342
PHI   .531    37.4      $ 70,780,000  $ 62,380,000  $1,667,914

But those Rangers look like the Twins when compared to the Mets, who opened the 2003 season with the majors' second-highest payroll and finished it with the fourth-worst record. At least the Mets seem to be learning: the mid-season departures of Jeromy Burnitz, Roberto Alomar and Armando Benitez, and the apparently permanent "loss" of Mo Vaughn saved $44 million. By contrast, the Braves got the quality they paid for, tying with the Yankees for the majors' best record despite spending $45 million less. The 2004 Marlins showed what good, young, cheap players could accomplish, while the Expos demonstrated that even good, young, cheap players need to choose between extra wins and extra frequent flyer miles. The Phillies, a large-market team often run like a small-market club, needed either one more free-agent signing or one fewer Jose Mesa to hold onto the Wild Card that was within their grasp until mid-September.


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

CHC   .543    39.4      $ 80,743,333  $ 72,343,333  $1,836,125
CIN   .426    20.4      $ 56,979,777  $ 48,579,777  $2,381,362
HOU   .537    38.4      $ 70,489,840  $ 62,089,840  $1,616,923
MIL   .420    19.4      $ 40,627,000  $ 32,227,000  $1,661,186
PIT   .463    26.4      $ 54,542,098  $ 46,142,098  $1,747,807
STL   .525    36.4      $ 83,150,895  $ 74,750,895  $2,053,596

Not much to say about the majors' most mediocre division. Four of the six clubs got almost exactly what they paid for. Cincinnati was ravaged by injuries, then by owner Carl Lindner; St. Louis was ravaged by its bullpen.


              Marginal  Opening Day   Marginal      Marginal $/
Team   WPct   Wins      Payroll       Payroll       Marginal Win

ARI   .519    35.4      $ 80,657,500  $ 72,257,500  $2,041,172
COL   .457    25.4      $ 66,981,667  $ 58,581,667  $2,306,365
LA    .525    36.4      $105,897,609  $ 97,497,609  $2,678,506
SD    .395    15.4      $ 45,430,000  $ 37,030,000  $2,404,545
SF    .621    52.0      $ 82,352,167  $ 73,952,167  $1,421,580

Once again, the Giants are the division's most efficient spenders; the Dodgers, the worst. Los Angeles paid as much as the Braves to win 16 fewer games. Arizona's relative efficiency is particularly impressive given the injuries to/ineffectiveness of Randy Johnson, Matt Williams, and Tony Womack, who collectively accounted for 38% of the Diamondbacks' payroll. The Rockies continue to flounder, while the Padres' low payroll positioned them for the opening of their new park in 2004. San Diego added Brian Giles at mid-season and can now afford to sign a quality free agent or two during the off-season.

Related Content:  The Who,  Marginal Revenue,  Payroll

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