For Blue Jays fans, it’s difficult to imagine a time when Toronto outspent division rivals like the New York Yankees and Boston Red Sox. But they once did. When the Blue Jays won back-to-back World Series titles—in 1992 and 1993—their payroll was highest in their division, the AL East. In fact, the Blue Jays were the league’s highest spenders in 1993.
But times have changed. Since 1995—the first full season after the Major League Baseball strike—the Blue Jays haven’t won their division and haven’t appeared in the post-season. On the other hand, the New York Yankees have won 12 of a possible 17 division titles. You’ll also notice that the Yankees have spent like gangbusters, and for nearly the past decade their opening day payroll has settled in the neighbourhood of US$200 million per year. The Red Sox also spend well into nine figures and frequently make the postseason. The Blue Jays’ 2012 payroll is roughly $75 million.
As a result, some would argue that the Blue Jays are fighting a losing battle. Baseball’s critics decry the fairness of a sport in which a handful of franchises can buy up all the marquee free agents. And judging from the graph above, you might assume there was a strong correlation between payroll and winning percentage.
Fortunately, there are plenty of baseball writers, bloggers and statisticians who rigorously analyze the data, and for the most part they agree that opening day payroll is not a good predictor of regular-season success. In other words, deep pockets don’t necessarily spell wins. After all, if you could buy championships, the Yankees would be winning more of them.
There is, however, a slight positive correlation between payroll and victories. If you spend a lot of money on salaries, your expected win totals increase. ESPN and The New York Times both have graphs that assess whether teams have exceeded or failed to reach their expected win totals. According to both sources, the Yankees have technically underperformed by a slight margin, even if their win totals look conventionally impressive.
“The problem for spenders, like all players of poker, isn’t the money. It’s the swings,” says the ESPN article, which analyzed data from 1998 to 2008. “Teams that have spent $125 million have won more than 100 games and also managed fewer than 70 victories. Spending more helps, but it’s hardly a guarantee of a winning season.”
For small- and mid-market franchises, there are glimmers of hope. Take another AL East team, the Tampa Bay Rays. In 2008, the Rays spent roughly $44 million on salaries—or, roughly $165 million less than the Yankees. That year, the Rays won the division title. Two years later, they won the AL East again. And while their payroll had increased by $28 million over two years, the Rays were still in the bottom half of MLB spenders in 2010. So rest assured Blue Jays fans—there’s more to winning than spending.
*Data is taken from USA Today’s MLB salaries database and reflects opening day figures in US Dollars. For more information on how they acquire these numbers, follow this link and click “About MLB Salaries.”
**The Tampa Bay Rays joined the AL East division in 1998. The Cleveland Indians were not included in the graph; they left the AL East and joined the AL Central division in 1995. The Milwaukee Brewers left the division after the 1993 season and also weren’t included.
***The 1994 MLB season was ultimately lost due to a players’ strike.