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October 8, 2009

Relative League Quality

I Told You, Don't Call Me Junior!

by Shawn Hoffman

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The American League is kicking the National League's butt, and has been for a number of years. Check out some of the numbers from the last five seasons, courtesy of Jay Jaffe's article last month: a 714-546 record in interleague games, an even better run differential, and not a single year with an interleague winning percentage under .540. The AL is Danny Almonte to the NL's 11-year-old little leaguer.

So how did this happen? Why, all of a sudden, is the American League so dominant? Is it just a cyclical shift, or is there something deeper that will keep the AL on top for the foreseeable future?

First, we need to actually quantify it. You might remember a couple years back when Nate Silver and David Gassko had a back-and-forth over historical league quality. Long story short, David felt that Nate and Clay hadn't regressed to the mean enough, while Nate said that David was regressing too much. Regardless, in terms of year-to-year AL versus NL quality ratings, both sets of numbers should tell us the same thing. So a huge thanks to David, who lent me his numbers from the beginning of time up through 2004:

Quality

This is coming from the AL's perspective, so anything above zero means the AL is better, and anything below zero means the NL is better. (I'm also using a three-year rolling average, instead of the single-year numbers.) Clearly this is pretty cyclical, with the NL having a few more total years on top, the AL being a bit more dominant in the years in which it's ahead, and a lot of back and forth in between. Subjectively, we can guess that the AL was dominant in the '20s because of the Ruth/Gehrig Yankees, while the NL was dominant for most of the '50s because AL teams were so slow to infiltrate the Negro Leagues. But we're not going to be able to explain every dip and jump, and those anecdotes don't tell us why the AL is better today.

So if we're looking for objective reasons, the most obvious explanation, of course, is money-based on the numbers we have, this does seem to have a pretty significant effect. The Retrosheet salary database only goes back to 1985, but since then, the r-squared coefficient between relative league quality and relative league spending is .46-in other words, 46 percent of the disparity can be explained by how much the teams in each league are spending. Here's the chart:

Cash

Not a very complicated picture. One axis is relative league quality, the other is relative payroll spend (on a per-team basis). As teams in a given league spend more money, the league becomes better. So, no surprise, AL teams have spent a lot more money than their NL counterparts over the past five years. This season is pretty indicative: coming into 2009, the average AL team had a $93 million payroll, according to USA Today's salary database. The average NL team, meanwhile, was just under $84 million. Even if you take out the Yankees, the AL still has a slight edge, coming in at a bit over $85 million.

This trend holds pretty well going all the way back to the mid-'80s. From 1985 to 1991, NL teams were actually outspending AL teams, and did so by about the same margin that AL teams are outspending NL teams today. In turn, the NL was the better league in every one of those seasons, except for a very slight hiccup in '85.

But there's another pretty significant trend taking hold here, and this one gives us an even higher r-squared figure (.48) than league payrolls: the number of teams in each league. From 1977 to 1992, when the AL fielded 14 teams and the NL had just 12, the NL was better in twelve of sixteen seasons. (And the AL just barely squeaked by in the years it was ahead.) In 1993, the Rockies and Marlins evened things up, and the AL played slightly better until the next round of expansion in 1998.

That round, of course, resulted in the current structure, with 16 teams in the NL and 14 in the AL. And from that point on, the junior circuit has dominated, winning six of the last seven years in David's database (which ends in 2004), and crushing the National League in every measurable category since then. (In the chart above, you'll see that the NL hasn't led the three-year rolling average since the 1993 expansion round.)

Those two spans of time (from 1977-92 and 1998 to the present day) are the only extended periods in major league history where the two leagues fielded differing numbers of teams, so it's tough to say for sure whether this is really a significant trend, or just a massive coincidence. But it does make sense: all other things being equal, the league that has to employ more players should inevitably have a longer tail of talent. No matter how you look at it, it's harder to field sixteen teams than fourteen. Add in that the American League teams have access to a slightly better talent pool (thanks to greater financial resources), and it actually makes a lot of sense that the AL has been so dominant.

There's also one other interesting dynamic that should come from having an unequal number of teams in each league, but is hard to empirically prove: each team in the smaller league has a greater chance at making the playoffs, so a perfectly average AL team should expect higher revenue than a perfectly average NL team in a similar market. In turn, that means that the average AL team should also be willing to spend more on players. It makes sense, then, that NL teams were spending more in the '80s than AL teams-the markets haven't drastically changed, just the number of teams in each league.

Could this all change going forward? Maybe, but the National League seems to be starting out with a clear disadvantage, so its teams may simply have to become richer in order for there to be a significant shift. The other question to ask is this: Does it matter? And is it better to be in a smaller but more competitive league, or a larger one that is a bit more diluted? Perhaps these will be issues for another day.

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

Related Content:  Surprise Teams,  Al

21 comments have been left for this article. (Click to hide comments)

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gecko1

So a typical AL team would be expected to have a higher payroll than an NL team due to the designated hitter right? (ie because an AL team has 10 starters vs only 9 for an NL team.) IIRC this is a big issue in the labor negotiations.

Oct 08, 2009 10:22 AM
rating: 1
 
BP staff member Shawn Hoffman
BP staff

This is the generally-held opinion (or at least the one used in CBA negotiations), but I don't actually think it's true. Teams create their budgets based on expected revenue -- simply having to hire a DH doesn't increase expected revenue. Having a greater chance at the postseason does. Which helps explain why NL teams were spending more than AL teams in the '80s.

Oct 08, 2009 10:26 AM
 
jkaplow21

The DH creates a huge imbalance.

First, it gives a significant edge to AL teams in their home parks. They have budgeted for a full time player whereas the NL has to put a part time player into a full time role.

Second, it has completely changed how teams handle stocking their benches. NL teams have to pay for more mediocre players than AL teams do since they are much more likely to come into games. If you have 4 bench spots and a DH and 15 million dollars to spend on them, an AL team can put 10-11 on the DH and 1 each on the bench spot where the NL will likely need better bench players and have to put 2-3 mil on each player.

Lastly, it also completely changes how you manage your bullpen. The AL can afford more long relievers (1+ inning guys) in their pen since they never have to worry about hitting for them. An AL team could just go to an all relievers rotation and not have to worry about a thing.

Oct 09, 2009 06:32 AM
rating: 1
 
R.A.Wagman

I've heard this argument a few times, but it generally fails to account for the fact that the vast majority of teams do not have a set DH. In fact, last year, only 7 teams had a primary DH who exceeded 500 PA. And this includes Luke Scott, who accumulated at least 40% of his PA while playing the field. The other true DH's were Hideki Matsui, Jack Cust, Jason Kubel, Aubrey Huff, David Ortiz and Adam Lind.

Oct 09, 2009 08:17 AM
rating: 0
 
Richard Bergstrom

If you switched the typical offensive performance by a pitcher with even a replacement-level position player, I would think you would gain at least a few wins. Those players that cycle into the DH spot also get more regular at bats, suggesting that they are better able to maintain their hitting skills.

There's also the additional benefit of being able to maintain a bench... you don't have to pinch hit for pitchers (or, in some cases, use two pinch hitters when a same-handed reliever is brought in). Managers have easier choices to make on when to bring a new pitcher into the game instead of worrying about when the pitcher's slot is coming up.

AL Managers gain a lot of flexibility from the DH slot.

Oct 09, 2009 10:56 AM
rating: 0
 
Drew Miller

"Even if you take out the Yankees, the AL still has a slight edge, coming in at a bit over $85 million."

That $85M isn't significantly different than the $84M figure for the NL. If you removed the Yankees from the quality ratings entirely, would the AL still have a statistically significant quality advantage?

In other words, is money really the issue here?

Oct 08, 2009 10:24 AM
rating: 0
 
BP staff member Shawn Hoffman
BP staff

I think the Yankees are always going to have a huge impact here. What would be interesting though is to trade them with the Mets, lets say, so you have by far the richest team in the larger league. In the '80s, NL teams still paid out more than AL teams, but the Yankees are a different animal now.

Oct 08, 2009 12:00 PM
 
Vince Galloro

You showed us the AL average with that league's biggest outlier, the Yankees, taken out. What is the NL average if its biggest outlier -- I'm presuming that it's at the opposite end of the salary heap, the Florida Marlins -- is removed?

Oct 08, 2009 13:05 PM
rating: 0
 
morillos

The combination of money with total talent pool and competitive issues based on league size sounds so right that it strikes me, having read this piece, as the sort of wisdom that is so blindingly obvious once it's pointed out that we wonder why no one noticed it before.

Brilliant.

Oct 08, 2009 11:42 AM
rating: 0
 
JoeSky60

Hear, Hear!

Oct 08, 2009 12:03 PM
rating: 0
 
BaseballGod

Very interesting article. What is the R-squared if you include both money and league size?

Oct 08, 2009 13:42 PM
rating: 1
 
cjrhgarmon

The "more diluted" argument only makes sense if the AL and NL are acquiring their players from different equal-sized populations. But all teams acquire their players from the same population, i.e., they pull players from the same distribution of baseball talent, so an NL team is not more likely to have less-talented players than an AL team (holding other factors like salary equal, of course). The worst team in MLB (and the best team, for that matter) is slightly more likely to be an NL team, but only because there are 2 more NL teams to choose from. But any particular NL team is just as likely to be bad (or good) as any particular AL team. The salary explanation is much more compelling. Also, what about draft spending and international spending on amateurs? There may be a difference there as well over the past ten years that could explain some of the difference.

Oct 08, 2009 14:01 PM
rating: 4
 
kjgilber

Agreed. The diution aregument does not makes sense. The notion that average revenue is higher is intriguing, but you could also argue that with the Yankees in the AL outspending the rest of the league by leaps and bounds, most years the rest of the AL is playing for 3 playoff spots.

I have also heard the argument (here on BP?) that the Red Sox/Yankee rivalry amd the success of the two franchises over the last decade has just raised the bar in the AL. You have to do more to get to the postseason and be competitive with these teams. The bar has been lower in the NL so teams have not had to extend themselves as far to get a shot.

Oct 09, 2009 07:42 AM
rating: 1
 
Peter Benedict

I double the agreement.

If each league had equal revenue, one league having more teams would be a disadvantage. But each team makes its own revenue independent (relatively) of the others. Adding the Yankees to the NL would improve, not harm, the NL.

Oct 09, 2009 08:27 AM
rating: 1
 
mafrth77

What factors are you using to judge relative league quality?

Oct 08, 2009 15:08 PM
rating: 0
 
Ira

So, to even the teams out, we need to add two teams to the AL.

Portland and Sacremento? we could put them both in the AL West and move the Rangers to the Central.

Sacremento and New Jersey? I'm sure Selig would love this, as it would eat into Yankees pocketbooks. but it would leave the Rangers in the West and necessitate a move of a team from the East to the Central. probably Toronto.

Vancouver and Montreal? Don't think that the Canadians are interested in baseball anymore. of course, with the relocation of Hockey franchises, looks like they aren't interested in that either.

San Antonio and Jacksonville? Can florida support a third team? Neither of the existing 2 are doing all that well.

Las Vegas and Orange County? LA could probably support a third team, as each of the ones there are doing very well, but Las Vegas is a problem for 2 reasons, 1 is desert and 2 is gambling.

opinions?

Oct 08, 2009 15:15 PM
rating: -1
 
mafrth77

Brooklyn!

Oct 08, 2009 16:33 PM
rating: 2
 
R.A.Wagman

2 more teams - Portland and Charlotte - two divisions per league.

Oct 08, 2009 15:47 PM
rating: 2
 
BP staff member Shawn Hoffman
BP staff

Not sure expansion is realistic until the economy is booming again and MLB can get another couple stadiums built, and that could be a long while. From a competition standpoint, I wouldn't mind seeing two divisions and two wild cards in each league. But it probably isn't optimal business-wise.

Oct 08, 2009 16:38 PM
 
Llarry

I can understand league size affecting competition for playoff spots and scheduling, but how does it affect the talent pool? Are there players (other than perhaps a few DHs) who are only eligible to play in the AL? All 30 teams are sharing the same worldwide talent pool, the number of them that are in one league or the other is irrelevant.

Oct 08, 2009 18:07 PM
rating: 1
 
Aaron Rosenbaum

BP shouldn't have published this article for any number of reasons. R^2 shows correlation, not causation. The league that has to employ more players may have a larger standard deviation - but that works in both directions. There's no reason to see a shift in the mean performance of a player. Do we expect the AL West to outperform all other divisions on a per dollar basis?

Oct 08, 2009 22:03 PM
rating: -1
 
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