Did you hear? The Dodgers are getting cheap. Really cheap. By 2018, they'll be spending less than the Royals on payroll, all while pocketing about $300 million in profit. If the team doesn't do well, so be it—people will come to the games anyway, because in the history of sports (and particularly in Los Angeles, where there's little else to do), there's nothing that fans enjoy more than a rich team that doesn't spend.

We're coming up on a really fascinating period in the history of sports media. At some point in the next five to 10 years, the television industry is going to be staring down the same barrel that the music industry has been looking at for the last decade. Cable in particular is just waiting to get its lunch eaten, as our already-exorbitant monthly rates keep going up thanks to more and more basic-tier channels that we'll never, ever watch. For the major sports leagues (and even some of the non-major ones, for that matter), the options are pretty clear: develop some contingency plans, or risk losing an incredibly large chunk of your revenues.

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For the past 20 years, Forbes Magazine (and previously Financial World Magazine) has put out its annual estimates of the thirty MLB teams' revenue, income, and value every April. For obvious reasons, these numbers can be incredibly valuable for anybody outside the industry; they are the only full set of financial estimates that are publicly available, so by default they're our best option for any kind of economic analysis.

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As a recap, here's my original piece on PER (or Payroll Efficiency Rating), followed up by some adjustments, and then the first part of this series two weeks ago.

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Welcome to the age of the payroll floor, or at least the mandate to spend some esoteric minimum if you're taking other teams' revenue-sharing dollars.

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For me, this is a lot of fun, but as a refresher, here's how these rankings are calculated. First, we find each team's expected revenue, based on their third-order winning percentage, and how big their market is. Then, you divide that by what each team's marginal revenue should have been, had they won exactly as many games as their payroll would have predicted. (Draft pick value is also factored in, so the worst teams get slightly more credit than the vanilla mediocre teams.) The end result is PER-Payroll Efficiency Rating-which tells us how well each team spent their payroll dollars.

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Let's throw some cold water on an outdated idea: player salaries don't always go up. Over the long term, there's always going to be a decent amount of inflation in payrolls, but it's very cyclical-instead of rising 10 percent every year, as we lazily tend to assume, there are significant peaks and troughs along the way. Right now, because of the recession, we're in a down cycle-2010 payrolls will likely be flat from their 2008 levels, meaning that any team that signed a mediocre player to a "going rate" contract in '07 or '08, assuming that it would look cheap by the time it was done, is probably feeling very sorry today. On the flip side, there's a pretty good chance that we'll look back at some of the deals signed during this recession and think of them as absolute steals.

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What's the free-agent market going to be like this winter? A buyer's market, or a seller's? I can honestly say that I have no idea, and any team executive who gives you a more definitive answer is probably either hoping or hedging.

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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?

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Way back in August of 2009, I tried to evaluate major league front offices on how efficiently they were spending their payroll dollars, building on the work of Doug Pappas and Nate Silver. I called it MR3/ExpMR-which was horrible. So from now on, we're going with Payroll Efficiency Rating, or PER. So there.

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Want a top-of-the-rotation starter this winter? You might want to check the trade market, because this year's pool of free-agent starting pitchers is mediocre at best, and downright boring at worst. That's a sharp contrast from last year's group, which featured C.C. Sabathia, A.J. Burnett, and Derek Lowe at the top, and had teams bidding against each other in the worst economic environment we will ever see.

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Back in 2004, the late Doug Pappas came up with a simple way to evaluate how well each team was spending their money: marginal payroll per marginal win. Here's Doug's original formula:

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