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April 6, 2004

Marginal Payroll/Marginal Wins

1985-1989

by Doug Pappas

Continuing his series on the top teams in terms of marginal dollars spent per marginal win, Doug Pappas today examines the 1985 to 1989 seasons. Click here to read the introduction to this series and the 1977 to 1979 seasons and here for 1980 to 1984. Stay tuned for Part IV (1990 to 1994), coming soon. For a breakdown of the 1995 to 2003 seasons, pick up a copy of the best-selling Baseball Prospectus 2004

Table 9. Marginal Payroll/Marginal Win, 1985


Team          W   L    Pct    Marg  8/31         Marg        Marg $/
                            Wins  Payroll      Payroll     Marg Win
Baltimore   83  78   0.516  34.9  $12,371,429  $10,691,429 $306,208
Boston      81  81   0.500  32.4  $11,080,695   $9,400,695 $290,145
Cleveland   60  102  0.370  11.4   $6,623,133   $4,943,133 $433,608
Detroit     84  77   0.522  35.9  $10,850,643   $9,170,643 $255,295
Milwaukee   71  90   0.441  22.8  $12,216,965  $10,536,965 $461,318
NY Yankees  97  64   0.602  49.0  $15,398,047  $13,718,047 $279,946
Toronto     99  62   0.615  51.0  $11,800,281  $10,120,281 $198,379

California  90  72   0.556  41.4  $11,559,593   $9,879,593 $238,638
Chi WSox    85  77   0.525  36.4   $9,849,689   $8,169,689 $224,442
Kansas City 91  71   0.562  42.4  $11,754,512  $10,074,512 $237,606
Minnesota   77  85   0.475  28.4   $7,238,667   $5,558,667 $195,728
Oakland     77  85   0.475  28.4  $10,008,823   $8,328,823 $293,268
Seattle     74  88   0.457  25.4   $5,549,870   $3,869,870 $152,357
Texas       62  99   0.385  13.8   $8,101,222   $6,421,222 $465,809

Chi Cubs    77  84   0.478  28.9  $13,478,225  $11,798,225 $408,550
Montreal    84  77   0.522  35.9  $10,195,246   $8,515,246 $237,050
NY Mets     98  64   0.605  49.4  $11,013,714   $9,333,714 $188,942
Phldelphia  75  87   0.463  26.4  $11,785,445  $10,105,445 $382,782
Pittsburgh  57  104  0.354   8.8  $10,223,945   $8,543,945 $976,001
St. Louis   101 61   0.623  52.4  $10,441,639   $8,761,639 $167,207

Atlanta     66  96   0.407  17.4  $14,771,382  $13,091,382 $752,378
Cincinnati  89  72   0.553  41.0   $9,258,848   $7,578,848 $185,063
Houston     83  79   0.512  34.4  $10,153,335   $8,473,335 $246,318
LA          95  67   0.586  46.4  $11,970,412  $10,290,412 $221,776
San Diego   83  79   0.512  34.4   $9,801,052   $8,121,052 $236,077
San Fran    62  100  0.383  13.4   $7,777,945   $6,097,945 $455,071

As the owners and players jockeyed toward another mid-season labor showdown, the owner of one of MLB's least efficient teams sought to set the record straight. Bud Selig announced: "The fact is, there are staggering cash operating losses in major league baseball today. ...The enormous cost increase in player salaries is, by far, the biggest reason baseball has dire economic problems. Any charge other than that is clearly and totally unsubstantiated by the economic facts as they exist today." MLB figures released after the season put the total of those "staggering cash operating losses" at less than 1% of revenue.

In fact, player salaries had doubled since 1981. So had MLB's revenue, as cable TV became an increasingly important source of income. Owners who reinvested their rights fees in payroll helped create a $300,000 gap between the major league minimum and the average salary. As the Braves and Pirates demonstrated, badly-run franchises could now waste more money than ever before.

At the bargaining table, the owners won a major concession from the players, as the seniority requirement before a player could file for salary arbitration was raised from two years to three. Not content with this victory, the owners spent the next three off-seasons colluding to destroy players' ability to switch clubs through free agency.

Table 10. Marginal Payroll/Marginal Win, 1986


Team          W   L    Pct    Marg  Open Day     Marg        Marg $/
                            Wins  Payroll      Payroll     Marg Win
Baltimore   73  89   0.451  24.4  $12,168,758  $10,488,758 $429,867     
Boston      95  66   0.590  47.0  $13,140,239  $11,460,239 $243,886     
Cleveland   84  78   0.519  35.4   $6,870,000   $5,190,000 $146,610     
Detroit     87  75   0.537  38.4  $12,320,714  $10,640,714 $277,102     
Milwaukee   77  84   0.478  28.9   $8,852,975   $7,172,975 $248,387     
NY Yankees  90  72   0.556  41.4  $16,044,473  $14,364,473 $346,968     
Toronto     86  76   0.531  37.4  $11,935,380  $10,255,380 $274,208     
                                                                
California  92  70   0.568  43.4  $12,732,312  $11,052,312 $254,662     
Chi WSox    72  90   0.444  23.4  $10,066,667   $8,386,667 $358,405     
Kansas City 76  86   0.469  27.4  $12,626,198  $10,946,198 $399,496     
Minnesota   71  91   0.438  22.4   $8,955,667   $7,275,667 $324,807     
Oakland     76  86   0.469  27.4   $8,502,352   $6,822,352 $248,991     
Seattle     67  95   0.414  18.4   $6,607,809   $4,927,809 $267,816     
Texas       87  75   0.537  38.4   $6,402,330   $4,722,330 $122,977   
                                                                
Chi Cubs    70  90   0.438  22.3  $14,256,665  $12,576,665 $564,609     
Montreal    78  83   0.484  29.9   $9,207,313   $7,527,313 $251,880     
NY Mets     108 54   0.667  59.4  $14,270,714  $12,590,714 $211,965     
Phldelphia  86  75   0.534  37.9  $11,682,166  $10,002,166 $263,672     
Pittsburgh  64  98   0.395  15.4   $8,652,568   $6,972,568 $452,764     
St. Louis   79  82   0.491  30.9   $9,742,235   $8,062,235 $260,992     
                                                                
Atlanta     72  89   0.447  23.8  $14,642,786  $12,962,786 $543,577     
Cincinnati  86  76   0.531  37.4  $11,111,388   $9,431,388 $252,176     
Houston     96  66   0.593  47.4   $9,413,501   $7,733,501 $163,154     
LA          73  89   0.451  24.4  $14,494,943  $12,814,943 $525,203     
San Diego   74  88   0.457  25.4  $11,077,186   $9,397,186 $369,968     
San Fran    83  79   0.512  34.4   $8,163,959   $6,483,959 $188,487 

The cover of the December 9, 1985 Sporting News asked, "Why Won't Anyone Sign Kirk Gibson?". Neither Gibson nor any other desirable free agent could obtain a single offer from other clubs, at any price. Owners were more aggressive in their negotiations with other players, too, forcing a record 159 arbitration filings. For good measure, all 26 clubs suddenly adopted 24-man rosters. Welcome to the Era of Collusion.

After the season, George Steinbrenner vowed to "get my payroll in line with my team's performance." This statement came weeks after Steinbrenner traded 24-year-old rookie Doug Drabek, who would win 148 more major league games, to Pittsburgh for 33-year-old Rick Rhoden, who would win 30 more. The defending World Champion Royals were even less efficient than the Yankees.

The National League rewarded good management, with both division winners among the league's three most efficient clubs. The 108-54 Mets won 38 more games than the Cubs, who had opened the season with almost exactly the same payroll, while in the NL West, the Braves and Dodgers competed to see who could do less with more.

Table 11. Marginal Payroll/Marginal Win, 1987


Team          W   L    Pct    Marg  8/31         Marg        Marg $/
                            Wins  Payroll      Payroll     Marg Win
                                                                
Baltimore   67  95   0.414  18.4  $13,434,895  $11,684,895 $635,049     
Boston      78  84   0.481  29.4  $13,211,873  $11,461,873 $389,860     
Cleveland   61 101   0.377  12.4   $7,955,250   $6,205,250 $500,423     
Detroit     98  64   0.605  49.4  $12,557,881  $10,807,881 $218,783     
Milwaukee   91  71   0.562  42.4   $7,687,724   $5,937,724 $140,041     
NY Yankees  89  73   0.549  40.4  $18,569,714  $16,819,714 $416,330     
Toronto     96  66   0.593  47.4  $13,194,734  $11,444,734 $241,450     
                                                                
California  75  87   0.463  26.4  $12,985,489  $11,235,489 $425,587     
Chi WSox    77  85   0.475  28.4   $8,987,415   $7,237,415 $254,839     
Kansas City 83  79   0.512  34.4  $13,188,384  $11,438,384 $332,511     
Minnesota   85  77   0.525  36.4  $13,271,956  $11,521,956 $316,537     
Oakland     81  81   0.500  32.4  $12,292,250  $10,542,250 $325,378     
Seattle     78  84   0.481  29.4   $5,624,500   $3,874,500 $131,786     
Texas       75  87   0.463  26.4   $6,342,718   $4,592,718 $173,967     
                                                        
Chi Cubs    76  85   0.472  27.9  $12,968,026  $11,218,026 $402,483     
Montreal    91  71   0.562  42.4   $8,895,552   $7,145,552 $168,527     
NY Mets     92  70   0.568  43.4  $14,102,214  $12,352,214 $284,613     
Phldelphia  80  82   0.494  31.4  $11,325,597   $9,575,597 $304,955     
Pittsburgh  80  82   0.494  31.4   $7,589,500   $5,839,500 $185,971     
St. Louis   95  67   0.586  46.4  $11,802,500  $10,052,500 $216,649     
                                                                
Atlanta     69  92   0.429  20.8  $14,385,393  $12,635,393 $606,638     
Cincinnati  84  78   0.519  35.4   $8,536,500   $6,786,500 $191,709     
Houston     76  86   0.469  27.4  $11,508,371   $9,758,371 $356,145     
LA          73  89   0.451  24.4  $14,280,987  $12,530,987 $513,565     
San Diego   65  97   0.401  16.4  $10,484,429   $8,734,429 $532,587     
San Fran    90  72   0.556  41.4  $10,628,000   $8,878,000 $214,444

By 1987, the owners had figured out how collusion was supposed to work. Even as MLB's revenue rose by 15%, the average major league salary actually declined for the first time in the free agent era. MLB's reported profits topped $100 million for the first of four consecutive years.

The remarkably well-balanced AL West saw all seven teams finish within 10 games of one another, even though Seattle and Texas spent less than half as much as those big-market powerhouses in Kansas City and Minnesota. The Milwaukee Brewers finished a surprising 91-71 despite the division's lowest payroll, while Cleveland's thriftiness proved less effective.

In the NL, St. Louis continued its tradition of efficient spending. Whitey Herzog led the Cardinals to their third division title in six years, despite being outspent by at least two rivals each season. Atlanta continued its tradition of wasting Ted Turner's cable revenue. The Pittsburgh Pirates rode a tiny payroll almost to .500, thanks to youngsters named Bonds and Bonilla.

Table 12. Marginal Payroll/Marginal Win, 1988


Team          W   L    Pct    Marg  Open Day      Marg        Marg $/
                            Wins  Payroll       Payroll     Marg Win
Baltimore   54  107  0.335   5.7  $13,532,075  $11,782,075 $2,054,271   
Boston      89  73   0.549  40.4  $13,896,092  $12,146,092   $300,646   
Cleveland   78  84   0.481  29.4   $7,899,000   $6,149,000   $209,150   
Detroit     88  74   0.543  39.4  $12,932,071  $11,182,071   $283,809   
Milwaukee   87  75   0.537  38.4   $8,464,500   $6,714,500   $174,857       
NY Yankees  85  76   0.528  36.9  $19,441,152  $17,691,152   $479,072   
Toronto     87  75   0.537  38.4  $12,141,225  $10,391,225   $270,605   
                                                        
California  75  87   0.463  26.4  $11,947,388  $10,197,388   $386,265   
Chi WSox    71  90   0.441  22.8   $6,190,000   $4,440,000   $194,387   
Kansas City 84  77   0.522  35.9  $14,090,223  $12,340,223   $343,531   
Minnesota   91  71   0.562  42.4  $12,462,666  $10,712,666   $252,657   
Oakland     104 58   0.642  55.4  $10,110,000   $8,360,000   $150,903   
Seattle     68  93   0.422  19.8   $7,342,450   $5,592,450   $282,128   
Texas       70  91   0.435  21.8   $5,412,131   $3,662,131   $167,720         
                                                        
Chi Cubs    77  85   0.475  28.4  $13,119,208  $11,369,208   $400,324   
Montreal    81  81   0.500  32.4   $9,665,833   $7,915,833   $244,316   
NY Mets     100 60   0.625  52.7  $15,269,314  $13,519,314   $256,777   
Phldelphia  65  96   0.404  16.8  $13,838,000  $12,088,000   $719,364   
Pittsburgh  85  75   0.531  37.5   $5,998,500   $4,248,500   $113,407   
St. Louis   76  86   0.469  27.4  $12,880,000  $11,130,000   $406,204   
                                                        
Atlanta     54  106  0.338   6.1  $11,828,174  $10,078,174 $1,658,959   
Cincinnati  87  74   0.540  38.9   $8,888,409   $7,138,409   $183,316   
Houston     82  80   0.506  33.4  $12,286,167  $10,536,167   $315,454   
LA          94  67   0.584  46.0  $16,850,515  $15,100,515   $328,387   
San Diego   83  78   0.516  34.9   $9,261,002   $7,511,002   $215,119   
San Fran    83  79   0.512  34.4  $12,380,000  $10,630,000   $309,012   

The NL standings looked like something out of a Bud Selig nightmare, with the Mets and Dodgers outspending their competition as the Pirates and Reds tried in vain to overcome the payroll disparity. Oakland upheld the honor of smaller markets, while Boston won a wild five-team race even though the Yankees outspent everyone else by 20%. This year, though, the Yankees finished out of the money in the Overspending Derby.

Until 1988, no club had ever spent more than $1 million per marginal win. The Atlanta Braves cleared that threshold with ease, spending more to win 54 games than Oakland spent to win 104. But the Braves were pikers compared to the Baltimore Orioles, whose 0-21 start set the tone for the worst season by a non-Detroit team since 1979. Baltimore cleared the $2 million/win mark with room to spare.

The owners were on a losing streak of their own. For the third off-season in a row, they colluded to restrict players' free agency, even though they had already been found liable for collusion in 1985-86. Collusion, which eventually cost the owners $280 million to settle, was subsequently described by a federal appeals court as "in many ways as damaging to baseball as the Black Sox scandal of 1919." It poisoned labor relations for years to come.

Table 13. Marginal Payroll/Marginal Win, 1989


Team          W   L   Pct    Marg  8/31         Marg        Marg $/
                           Wins  Payroll      Payroll     Marg Win
                                                                
Baltimore   87  75  0.537  38.4  $10,944,499   $9,040,499   $235,430    
Boston      83  79  0.512  34.4  $19,064,885  $17,160,885   $498,863
Cleveland   73  89  0.451  24.4  $10,349,500   $8,445,500   $346,127    
Detroit     59  103 0.364  10.4  $14,147,763  $12,243,763 $1,177,285    
Milwaukee   81  81  0.500  32.4  $11,901,500   $9,997,500   $308,565    
NY Yankees  74  87  0.460  25.9  $18,482,251  $16,578,251   $641,086    
Toronto     89  73  0.549  40.4  $16,016,666  $14,112,666   $349,323    
                                                
California  91  71  0.562  42.4  $15,362,333  $13,458,333   $317,414    
Chi WSox    69  92  0.429  20.8   $8,981,094   $7,077,094   $339,778    
Kansas City 92  70  0.568  43.4  $17,101,047  $15,197,047   $350,162    
Minnesota   80  82  0.494  31.4  $14,303,000  $12,399,000   $394,873    
Oakland     99  63  0.611  50.4  $17,722,999  $15,818,999   $313,869    
Seattle     73  89  0.451  24.4   $8,702,500   $6,798,500   $278,627    
Texas       83  79  0.512  34.4  $10,831,781   $8,927,781   $259,529    
                                
Chi Cubs    93  69  0.574  44.4  $12,167,000  $10,263,000   $231,149
Montreal    81  81  0.500  32.4  $15,141,222  $13,237,222   $408,556    
NY Mets     87  75  0.537  38.4  $21,300,878  $19,396,878   $505,127    
Phldelphia  67  95  0.414  18.4   $8,633,000   $6,729,000   $365,707    
Pittsburgh  74  88  0.457  25.4  $12,463,000  $10,559,000   $415,709    
St. Louis   86  76  0.531  37.4  $16,077,333  $14,173,333   $378,966    
                                                
Atlanta     63  97  0.394  15.2   $9,065,334   $7,161,334   $471,528        
Cincinnati  75  87  0.463  26.4  $12,257,000  $10,353,000   $392,159        
Houston     86  76  0.531  37.4  $16,761,625  $14,857,625   $397,263        
LA          77  83  0.481  29.4  $21,147,506  $19,243,506   $655,377        
San Diego   89  73  0.549  40.4  $14,004,000  $12,100,000   $299,505        
San Fran    92  70  0.568  43.4  $17,255,083  $15,351,083   $353,712 

MLB continued to benefit from the aftereffects of the collusion era, posting a record profit of $214 million on revenue of $1.2 billion. From 1984 to 1989, MLB's gross revenue rose 99%, while player salaries increased by just 51%. Over the next three years, salaries would more than double, setting the stage for the labor showdown of 1994-95.

Four of 1989's five highest payrolls belonged to the 1988 division winners. The Red Sox, Mets and Dodgers paid for the previous year's success, while the Yankees continued treading very expensive water. In the NL, the surprising Cubs combined the league's best record with its third-lowest payroll.

The Tigers, who collapsed after contending for seven years in a row, spent more for less than any other club. Atlanta's Ted Turner wasn't investing his superstation money in his team, though the Braves' dynasty lay just two years ahead. Meanwhile the Orioles, MLB's laughingstocks of 1988, improved by 33 games despite slashing their payroll by 20%.

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