The last 15 of 16 World Series winners have had payrolls in the top half of all the teams in Major League Baseball. Most casual sports fans could have told you that. However, not too many people can state that in 14 of the previous 16 seasons, at least one bottom half payroll team has made the playoffs. In the business of baseball, the goal of most teams is to advance to the postseason. The MLB has the lowest percentage of teams making the playoffs (27%) out of the four main professional sports; the NFL has 38% of its teams while the NBA and NHL have more than half of their teams making the postseason dance.
Reaching the postseason is a significant measure of a successful ballclub in the major leagues. Well-known Oakland Athletics General Manager Billy Beane, who built his team with young players and low salaries, has said, “My job is to get us to the playoffs.” He invented the ‘Moneyball’ approach that many teams have since adopted. After Beane took over as the A’s GM in 1998, he brought a last place team in 1997 and 1998 to the playoffs in each of the four seasons from 2000 to 2003. His new pervasive outlook on baseball has benefited many small market teams that cannot spend as much money as the wealthier teams.
There have been 7 seasons out of the last 16 in which at least 3 bottom half payroll teams have made the MLB playoffs. This was best represented by the Florida Marlins shocking victory over the New York Yankees in the 2003 World Series. The Yankees with the highest payroll lost to the Marlins, the team with the 25th highest payroll. That should not happen according to conventional wisdom. The Yankees, with 8 players with higher salaries than Florida’s highest salaried player, should have at least forced a Game 7 versus the lowly Marlins. Still, the Marlins, behind the outstanding pitching of Josh Beckett, won the World Series in 6 games at Yankee Stadium with a payroll $100 million less than that of the Yankees.
In the 19 years that the Florida Marlins have existed, they have been good enough and ‘lucky’ enough to win 2 World Series Championships. Although they had the 7th highest payroll in 1997 for their first win, from 1998 to 2011 the Marlins have kept their team payroll near the lowest in the league. Florida has been successful because most of their young players and low-risk decisions have panned out. For example, in 2003, the Marlins starting rotation of Josh Beckett, Carl Pavano, Mark Redman, Dontrelle Willis and Brad Penny garnered less than $7.5 million combined. Most aces make much more than that in a year. Those investments provided very high rewards for the Marlins.
Small market teams are hoping they can hit the jackpot like Florida did. Most of them though have not fared as well. Franchises like the Expos/Nationals, Royals and Orioles have had a lot of trouble succeeding. Since those teams do not have the same resources that high payroll teams do, they have to depend on developing players through their farm systems. Conversely, teams such as the Red Sox, Yankees, Cubs, Dodgers and Mets can afford to take on many large contracts at a time. Many say that Red Sox General Manger Theo Epstein has done a very good job, but having a large payroll allows him to make mistakes. Since 2003 when Epstein began as the GM, the Red Sox have not had a payroll lower than 6th in the MLB. Having a substantial budget gives him the opportunity to dish out risky contracts. Since trading Nomar Garciaparra midway through 2004, the Red Sox have had a revolving door at shortstop, which has included the horrifying contracts of Edgar Renteria and Julio Lugo. In 2005, Epstein gave $8 million to Renteria, who made an MLB-high 30 errors and did not even reach hitting 10 home runs at the plate. Then a few years later, Epstein gifted a lot of money on Lugo, who had a .319 on-base percentage and .346 slugging percentage with Boston. The Red Sox organization paid him over $35 million, which included $8.85 million of his $9.25 million contract with the Orioles in 2010. Even with these questionable signings, the Red Sox have continued to make the playoffs 6 out of the last 7 seasons and have won 2 World Series in that time.
In 2011, the Boston Red Sox, with the 3rd highest payroll, are in a prime position for yet another postseason appearance. In addition, as of today*, the playoffs would also include the Yankees (highest payroll in MLB), Phillies (2nd highest), Tigers (10th), Rangers (13th), Braves (15th), Brewers (17th) and Diamondbacks (25th). This slate of teams includes 2 bottom half payroll teams, which is approximately the average number over the last 16 years. It appears that a fourth of the playoff teams tend to be teams with lower payrolls. Overall, money can lead to positive results in the MLB, but low-payroll teams can be successful in the business as well if they make the right decisions.
*Today: standings before games on Monday, August 15.
**The MLB expanded from 28 to 30 teams in 1998. For data from 1995 to 1997, top half payrolls are 1-14; for 1998 to present, they are 1-15.
(Sources: http://www.baseball-reference.com/, http://mlb.mlb.com/mlb/standings/index.jsp)