A Dollar Short of a Championship

by Robert Nathenson, September 24, 2016.

Every September sports writers pen the Cinderella story narrative, fueling the myth of parity across the 30 major league baseball teams. Despite a low team payroll, one small-market team combines such factors as a solid starting rotation, a high-achieving bullpen, economical free agent pick-ups who are having resurgent years, tremendous coaching, and an excellent farm system, to propel themselves to the playoffs. This year the Cleveland Indians encapsulate the Cinderella trope, with a 23rd ranked team payroll of $112 million (spotrac). Notwithstanding the time-honored tradition of rooting for an underdog, we should not trust this narrative.

Since the baseball playoffs were expanded from four to eight playoff teams in the 1995 season (enacted but not implemented in 1994 due to a strike), and the subsequent expansion to ten teams in the 2012 season, only one team in the bottom third of opening day payroll has won the World Series – the 2003 Florida Marlins. Instead, as my baseball paper published this past spring in the American Statistical Association’s journal Chance shows, high-spending teams are crowding out low-spending teams.

From 1969 to 1993, when only four playoff teams earned a berth in the playoffs, the chances of winning the World Series conditional on playoff entry were not statistically significantly different for high-spending (28.26%) and low-spending teams (30.77%). Since 1995, however, the odds have dramatically changed. Fifteen of the last 21 World Series winners had opening day payrolls in the top ten.

It has become a matter of playoff slots. These years, about half of the ten spots go to teams in the top third of spending, with top-spending teams’ chances of entering the playoffs doubling from 1969-1993 to today. In practice, top-spending teams can spend their way to within a coin flip’s distance of a playoff berth. However, the chance of making it to the playoffs for a team located in the bottom third has not risen, remaining consistent since 1969 at about 11-12%, and resulting these days in a playoff field crowded by high-spenders.

This year is no exception. Four of the top six spending teams, and six of the top ten, are expected to go to the playoffs. Of the expected division winners, all but one team is in the top ten of spending. The Tigers (4th), Giants (6th), Cardinals (9th), Blue Jays (11th), Orioles (12th), Mariners (13th), and Mets (14th) either currently hold or are fighting for a wild card spot. The Cleveland Indians are likely to be the sole representative from the bottom half of team payrolls.

Cleveland sports teams have had a successful year to-date, with the Cavaliers ending the city’s fifty-two year sports championship drought. The Indians are highly favored to win the American League Central for the first time since 2007. However, as the number of news stories touting the Indians as this year’s Cinderella story proliferates, baseball fans should remember what has happened to small-market teams in the playoffs over the past two decades. The Indians, like their low-payroll compatriots of yesteryear, are likely to come up (several million) dollars short of the championship.


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