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The Money Pitch

The Widening gap between rich and poor teams means only a handful will have a shot at the World Series
Ken Shouler, Austin Merrill
From the Print Edition:
Cuban Spy Scandal, May/Jun 02

(continued from page 1)

-A difference of more than $85 million separated the 2001 payrolls of the highest team, the New York Yankees, with $109,791,893, and the lowest team, the Minnesota Twins, with $24,300,000. This awesome disparity is not even the greatest ever. In 2000, the Yankees spent $113,365,867, nearly $98 million more than the Twins' bottom- feeding $15,822,000.

-Before last season, the last time a team not in the top five in payroll was in a World Series was 1998, when the San Diego Padres, who ranked 10th with a payroll of $53 million, were swept by the Yankees.

-The 2001 Arizona Diamondbacks ranked eighth in spending ($81,206,523) and won the World Series. It was the first time in nine World Series that a winning team ranked that low.

-In the 25 years since 1977, seven teams ranked below the top 10 in spending have won the World Series. But only one—Minnesota in 1991—has won any of the last 10 Series. (See table of Series winners since 1977 and where they ranked in payroll, page 109).

In addition, teams that once had winning traditions seem to have little or no chance today. Since the 1970s, teams like Kansas City, Milwaukee and Detroit have enjoyed successful runs. Now, ranked in the bottom half of payrolls, these three clubs have not only failed to win a World Series, but not one has won a pennant, division or wild card in 15 years. (Milwaukee won the pennant in 1982, Kansas City won the World Series in 1985, and Detroit won its division in 1987.)

Moreover, the problem is one of image, not just numbers. "The perception of the fan is also relevant," says Zimbalist. "It's not an absolute measure. In absolute measures, the Yankee dynasty of the last five years is no worse than the Yankee dynasty of 1949—53. The perception is the greater problem today than it was then because it's more on the table. The money [George] Steinbrenner is spending is all there for everyone to see.

"Baseball once stood alone on the pedestal of team sports. But today, baseball is seriously challenged by the NFL and the NBA as well as by a growing list of new professional sports and entertainment options on television and the Internet. So baseball has to care more about fan sensitivity to these issues since fans have so many more options now."

If fans perceive unfairness, baseball risks losing its prestige and—in the lexicon of advertising—market share. "What you're really interested in competitive balance is what turns the fans on and what turns the fans off," says Zimbalist. "What fans respond to is a sense of hope for their team, a sense of fairness in the process. And insofar as they respond to outcomes, I think they are much more inclined to respond to winners of championships, winners of divisions, and so on than they are to winning percentage. Keep in mind, that inequality isn't necessarily bad. Any rational league would want to have some inequality toward the larger cities. Because you get more rating points if the Yankees are in the Series than if the Oakland A's are. You don't want perfect equality. It tends to be a turn-on to have a king of the hill to go after."

Recent evidence also shows that payroll alone doesn't take you to the promised land. Baltimore, Anaheim and Los Angeles have been emptying the vault lately and the last of them to win a Series was Los Angeles in 1988. Even the Yankees were spending a lot of money 10 years ago without results. They finished 67-95 in 1990, leading conservative pundit George Will to quip, "As the Yankees have recently shown, the absence of baseball acumen in the front office can be a great leveler, regardless of financial assets."

Among the top-ranking teams in payroll last year, five—Toronto, Los Angeles, Texas, Boston and the New York Mets—didn't make the postseason. Seattle ranked 11th in payroll, yet tied a Major League record with 116 wins. So the correlation between high payrolls and a high won-lost percentage is imperfect. The best that can be said is that payrolls influence the outcomes and create a greater probability of one outcome over another. Predictions fit the realm of inductive logic and probability, not deductive logic and certainty. "The correlations between payroll and performance for the last five years is that payroll explains about 30 to 40 percent in the variations in performance," Professor Zimbalist says. "That leaves 60 to 70 percent of the variation explained by other factors. There's no guarantee that you're going to win by spending a lot more money. It's just more likely that you'll win."

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