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Cleveland Indians

PD examines baseball's economic slate

By jcfortun Published: March 24, 2009

The Cleveland Plain Dealer's Rich Exner and Bill Lubinger used their computer-assisted reporting skills to dig into the economic slate of Major League baseball today.

Does maximum cash equate to winning?

It's an interesting report, but flawed in many areas and just not broad enough overall.

It is obvious from the onset Exner and Lubinger may be examining a sport they know little about:

But while reviving the call for a cap on major-league salaries that many owners believe would give teams equal footing, Red Sox President Larry Lucchino reminded the media, "An old adage says [there's] three things money can't buy -- love, happiness and the American League pennant."

Maybe he's right on the first two. But winning baseball?

The Yankees, with their league-high $209 million payroll, missed the playoffs last season for the first time in 14 years. Boston lost the American League pennant to Tampa Bay, which had one of baseball's lowest payrolls at $44 million.

But a Plain Dealer comparison of payrolls and team performance over the last 13 seasons (1996-2008) suggests that, yes, Larry, you can buy your way into the postseason.

Making the postseason and winning an American League pennant are two different things guys.

Obviously there is going to be a direct correlation with spending money and making the playoffs. Baseball has always been an uneven playing field.

The reporters offered these bullet points in their story:

• Nearly 80 percent of the 104 playoff teams since 1996 ranked among the top half in payrolls.
• Eight of the 13 World Series titles were won by teams ranked among the top 10 payrolls.
• Last season, the three teams with the highest payrolls -- the Yankees, Detroit and New York Mets -- sat out the playoffs. But other high payroll teams dominated: No. 4, No. 5, No. 6, No. 7 and No. 8 all reached the postseason.

The top half in payrolls is a broad spectrum. There is a huge difference between the 2008 Yankees who had a payroll of $209,081,579 and the No. 15 team, the Milwaukee Brewers, who had a payroll of $81,004,167. The Indians came in at No. 16 with a payroll of $78,970,067.

The Brewers were the only playoff team of that group.

The Top 10 payrolls are also interesting. The No. 10 team last year, the Atlanta Braves, had a payroll that was half of the Yankees at $102,424,018. Heck the No. 2 team, the Detroit Tigers were far behind the Yankees at $138,685,197.

While a team may be in the top 10 or 15 of payrolls, it doesn't mean they are throwing around a lot of cash. There is just such a huge difference after you get past the Yankees.
Click here to check out everyone's payroll from last season

But what the report really ignores is how Major League baseball is beginning to close the economic gap through revenue sharing.

In 2001 the revenue sharing system circulated $169 million dollars throughout all of Major League Baseball, according to Sports Illustrated senior writer Tom Verducci in his new book, the Yankee Years. By 2008 the figure jumped to $408 million dollars.

This has allowed teams like the Tampa Bay Rays the ability to sign some of their premiere young players, Like Evan Longoria, to long term deals.

Now that small market teams can afford to buy out their star player’s arbitration years (six years), players are not hitting the free agent market till they are about 30 years old. Making there attractiveness to possible buyers less then they would be if they were hitting the market at 25, reaching their peak years.

This leaves the free-wheeling Yankees, who like to purge free agency, with choices that are getting closer to the downside of their career.

While there is always going to be a disparity between the top payrolls and the lower payrolls, teams are starting to catch up just by being economically efficient as well.

Which, Exner and Lubinger tried to cover in their second story:

Only Oakland, Minnesota, Atlanta, Houston and St. Louis graded out better (than the Indians) in analyzing the combination of win totals and opening day payrolls over the 13 full seasons since the 1994-95 work stoppage.

Not suprisingly, the Oakland A's -- with their dollar-stretching ways made famous by the 2003 book Moneyball -- got more for their money than any other team in baseball.

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