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Marginal Payroll

This post is required of all sabermetric web sites, comparing the marginal cost of each team win above replacement level.  I think you've all seen this before (thanks, Doug Pappas) so I'll skip right to the table.

Lg Team Total Payrol Adj W Marg $$/Win
N     Florida Marlins  $21,811,500 82 $291,142
A     Tampa Bay Rays  $43,820,597 99 $631,361
A     Minnesota Twins  $56,932,766 90 $1,093,255
A     Oakland Athletics  $47,967,126 77 $1,253,210
A     Kansas City Royals  $58,245,500 77 $1,628,363
A     Texas Rangers  $67,712,326 81 $1,719,516
N     Arizona Diamondbacks  $66,202,712 80 $1,726,201
N     Milwaukee Brewers  $80,937,499 88 $1,749,683
A     Cleveland Indians  $78,970,066 83 $1,946,804
A     Los Angeles Angels  $119,216,333 102 $2,007,796
N     Philadelphia Phillies  $98,269,880 90 $2,083,814
N     Houston Astros  $88,930,414 84 $2,154,914
A     Toronto Blue Jays  $97,793,900 88 $2,177,510
N     Pittsburgh Pirates  $48,689,783 65 $2,237,182
N     Chicago Cubs  $118,345,833 95 $2,277,213
N     Colorado Rockies  $68,655,500 72 $2,421,175
N     St. Louis Cardinals  $99,624,449 84 $2,475,267
A     Boston Red Sox  $133,390,035 97 $2,508,059
A     Baltimore Orioles  $67,196,246 70 $2,543,606
A     Chicago White Sox  $121,189,332 91 $2,593,571
N     Cincinnati Reds  $74,117,695 72 $2,654,602
N     San Francisco Giants  $76,594,500 70 $3,018,435
N     Los Angeles Dodgers  $118,588,536 82 $3,191,274
N     New York Mets  $137,793,376 87 $3,275,869
N     Atlanta Braves  $102,365,683 70 $4,222,695
A     Detroit Tigers  $137,685,196 76 $4,587,051
A     New York Yankees  $209,081,577 91 $4,648,150
N     Washington Nationals  $54,961,000 57 $4,938,046
N     San Diego Padres  $73,677,616 61 $4,974,001
A     Seattle Mariners  $117,666,482 63 $7,337,950

Payroll data from the USA Today salary database.

Note that I've added two wins to all AL teams and subtracted two from all NL teams to account for the difference in league talent.  Although, depending on how you interpret the numbers, that's not necessarily a good choice.  Some thoughts:

  • Surely sinking $30MM more (mostly payments to arbitration-eligible players) into an 84-win Marlins team would pay for itself after a 10-win increase and playoff birth, no?
  • The average payroll was $89.5MM in 2008.  Without the Yankees and marlins, it was $87.7MM.
  • The average cost of a marginal win was $2.4MM.  Keep that in mind when we congratulate teams who sign free agents for just under the average of $4.8MM per win.  Free agents are really only good deals relative to other free agents.
  • Make fun of the Yankees' $200MM payroll all you like, but they were still more efficient than three other teams last year.

A further analysis that might be interesting would be to use Pythagorean record or third-order wins instead of actual wins.  Both would better hold teams accountable for acquiring talent, instead of simply winning games.  I'd be happy to share my spreadsheet with payroll information and win totals with anyone who wants to tackle those questions.

Lastly, this analysis isn't actually a great way to judge the effectiveness of general managers.  Spending the first $25MM over the leaugue-minimum (mostly money to first- and second-year arbitration players) is MUCH more efficient than the $100MMth dollar (mostly on free agents by that point).  What we really want to do is ask, "Given a certain payroll level, how many wins would we expect a team to have, and which teams outperformed that number?"  That requires a non-linear estimate of dollars-per-win, and another post.  Stay tuned.