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Mind the Gap
Why are MLB's lowest payrolls thriving while its highest flail?
A refrain that finds its way into this newsletter more often than I’d like is some permutation of “Money Talks.”
That’s because money does tend to drive a lot of the outcomes in sports, which are ultimately in the entertainment business. Decisions are made, standards are shifted, players are moved, conferences are realigned, all over money.
But if there’s one instance in which money is not always a leading indicator, it’s winning. While being careful not to overstate it — competitive pay typically accompanies competitive play — baseball in particular challenges that would-be conventional wisdom.
It’s the only one of the four major U.S. leagues that doesn’t have a salary cap, which opens the door to more aggressive spending than any other sport.
In a vacuum, it would stand to reason that if you could just pay all the best players — alright, not all, but more than your opponents — then you’d probably be able to field the best team, right?
With apologies to the Mets fans reading this — you know who you are — the biggest payroll in the history of the sport did not deliver on its promise.
There was a piece in FiveThirtyEight back in April, before the season started, titled: The Mets Assembled The Most Expensive Baseball Team Ever. Is That Enough To Make Them MLB’s Best Team?
It was not. Instead, they sputtered out by midseason and sold off their big-ticket pitchers at the trade deadline. It was a quick reset — agility for which the organization deserves some credit, IMO — in light of a huge disappointment.
Across town, the Yankees — who are no longer in their Evil Empire days, but still carry the second-highest payroll in the game — just sunk below .500 too.
Again, that’s a big disappointment for a franchise that’s used to winning and hasn’t done it in a while now.
What fascinates me, though, is how much less the two teams that are actually leading the Yankees’ division are spending by comparison.
The Orioles have pole position. They’ve got the 28th-ranked payroll ($70M) in the game, yet carry its third-best record overall (74-47).
Right behind them in the standings are the Rays, who rank 27th in payroll ($79M) and have the sport’s fifth-best record (73-50).
To put that in raw numbers, if you were to combine the Rays’ and Orioles’ 2023 payroll, you’d have just under $150M.
That sounds like a lot out of context, because it is, but the context is: the Yankees’ payroll is $280M, and the Mets’ is $343M.
The Mets are spending fully four times what either the Rays and Orioles are this year on their own, yet they trail both by nearly 20 games.
That, my friends, is bonkers.
Money Isn’t Everything
So how is it that the teams spending hundreds of millions are this bad, and the teams who aren’t even hitting nine digits (can you imagine the embarrassment) are this good?
Well, one thing you want to make sure of when you’re spending your money is that you’re spending it on the right things. Return on investment, you might call it.
Max Scherzer and Justin Verlander are earning the highest salaries in baseball this year, but neither pitched as well, or often, as the Mets envisioned.
The offense wasn’t much better, currently good for 19th in scoring, amid such other powerhouses as the Nationals, Rockies, and… Yankees, who exhibit many of the same problems.
This isn’t limited to New York, for what it’s worth. The Padres have been a disaster too, despite being about as aggressive as it gets over the last few years.
They’ve brought in a ton of top-end talent, but it isn’t getting them where they thought they’d be. Third in payroll, fourth in their division. Ouch.
How? At the risk of oversimplifying matters, baseball’s a fickle game like that. Talent translates to success less directly than in any other sport.
Basing this on my own anecdata — great move, highly recommend — I would rank the four major U.S. sports in which you most expect the actually best team to win as follows:
1.) Basketball (easy)
2.) Football (one of the best teams is almost always in the Super Bowl)
3.) Hockey (goal-scoring can run hot and cold)
4.) Baseball (the ultimate crapshoot)
Baseball’s just confounding like that. You can have an absolutely loaded roster and fail, repeatedly.
Ask the Dodgers, who’ve won 90+ games every year in the last decade (topping 100 four times in that span, which probably would’ve been five had 2020 been a full season) and only have the one World Series to show for it.
Even sustained excellence cannot account for the chaos that is playoff baseball.
Baseball is also a sport that rewards efficiency, both in gameplay and in roster construction. The Rays have an especially well-regarded organization for that very reason.
They’ve long made the most of scant resources, maximizing a tight budget, developing the talent they do have, and innovating how it’s deployed.
This year, they’re doing it again. They’ve cooled off from their historically good start, but they remain 4th in runs scored, 2nd in team WHIP (and don’t you dare @ me with a different pitching acronym — just accept that they’re good), 5th in defensive runs saved, and even 2nd in stolen bases.
Being roughly top-five in every facet of the game is a pretty surefire way to be really good, and they’ve done it all with just a single player (Zach Eflin) making more than $10 million this season.
They’ve drafted well, they’ve traded well, they’ve organization’d well. They do as Brad Pitt would’ve done. But they’ve been doing all that for a while.
The bigger surprise is the Orioles, who were thought to be a year away from being a year away. They also employ just one player making over $10 million (Kyle Gibson), possibly because they’re earlier to the party than they expected to be.
I’ll kick it to Tim Kurkjian to explain why that is:
“They have the best record in the American League, only two years removed from finishing 39 games out of fourth place in the AL East. From 2018 through 2021, the Orioles had the worst winning percentage (.326) of any team over a four-year period since the 1962-65 Mets (.300). Now, the Orioles have a chance to join the 1969 Mets as the only teams in baseball history to go from 100 losses to 100 wins in a three-year span.”
Now that’s a comeback story! And while none of their team counting stats are quite as good as the Rays’, the stat that counts above all is wins.
Thanks to nailing what have been high draft picks, the future is brighter than what’s already a league-leading present.
Look out for Jackson Holliday in a couple years, as well as Colton Cowser and Heston Kjerstad. Adley Rutschman and Gunnar Henderson are already here.
And in those players, the Orioles’ answer to the money question gets a little clearer.
Young stars keep the ol’ payroll deceptively low. Rutschman and Henderson are on pre-arbitration contracts, as are closer Felix Bautista (one off the league lead in saves) and their most consistent starter, Kyle Bradish (10th in ERA).
Combined, those four players will make less than $3M this year. That’s a Moneyball miracle.
In baseball, more than most sports, that can happen.
You can have really expensive players (and teams) perform below their salary, and you can have really inexpensive players (and teams) far outperform theirs.
The Rays and Orioles are running a hell of a surplus this year.
I wouldn’t bet anyone over the Braves right now, who have basically been the Rays but better thanks to the kind of high-end talent that Tampa can’t afford. They’ve been emphatically, historically great; possibly the best team that proud organization has ever fielded.
Still, with apologies to the Braves fans reading this — you know who you are — I know better than to bet on baseball. Here’s to October.