February 28, 2001

The Big Debate: Part Two

This is Part Two of the two-part debate between myself and Scot Zook.  The subject: the disparity between "large" and "small" market baseball teams, and what this means to the future of the game.   In Part One, Scot and I spent several days just trying to determine what it is we are arguing.   Our debate continues...

MIKE: Apparently, we'll need to modify our original premise to read:

"In baseball's current economic environment, which began sometime around the late 80's and early 90's and has gotten progressively worse since then, teams from cities with low populations cannot maintain a competitive balance financially or talent-wise with teams from cities with high populations."

Whew!

Now that we have a theory, let's test it. For now, let's concentrate on the second half of that sentence. Can teams from a small population maintain a competitive balance with teams from a large population? You disallowed the use of playoff appearances as a means to measure success, so why don't we use wins instead? I think (at least I hope!) we can both agree on that.

Here is the method I used. If you'd like to use a different method, feel free. I first divided the 30 teams in MLB into three groups: Top-10, Middle-10 and Bottom-10. I then added up all the wins in each group for the past ten years. Since the MLB has consisted of 26, 28 and 30 teams during this time, I took the average number of wins instead of the total in order to keep everything equal. In 1994 and 1995, teams played less than 162 games, so the averages look a little smaller than you'd think. Here are the figures I found for grouping teams by population:

Top-10: 78 wins
Mid-10: 77 wins
Bot-10: 78 wins

I was actually surprised myself to see how consistent the numbers are. There is literally NO correlation at all between a city's population and the number of wins for a team playing in that city. Since I know you'll come back to me and ask me to do the same analysis for TV market, here you go:

Top-10: 79 wins
Mid-10: 78 wins
Bot-10: 76 wins

As you can see, there's not much of a difference here, either. There's only a 4-percent difference between the Top-10 and Bottom-10 groups, which amounts to an average of three wins per year. Want another iteration of this analysis? Let's try a combined ranking of population AND TV market. To do this, I admit I was a little lazy and just added the ranks together. For example, the Yankees are ranked #1 in population and in TV market, so their combined rank is "2". Kansas City is ranked #31 in TV market and #32 in population, so their combined rank is "63". It's not really the best, most scientific way to do it, but it works well enough. Here are the numbers:

Top-10: 78 wins
Mid-10: 80 wins
Bot-10: 75 wins

Again, the difference between the top and bottom teams is minimal (4-percent or three wins), and the middle group is actually better than both ends thanks to Atlanta (which is the 10th ranked TV market, but only the 39th ranked population.)

It appears that I have proven that teams from cities with (relatively) small populations can, in fact, maintain a competitive balance with teams from cities with (relatively) large populations. Do you agree? If not, please provide some proof.

SCOT: Okay, I've stalled long enough. You've shot some pretty decent sized holes in my argument there, I will give you that. Unfortunately enough for you though, they are not big enough to cause me to change my mind and ultimately agree with you that it's perfectly fine if one team has a payroll over $100 million and while another pays $25 million. We do agree that there is a huge difference in the level of talent that can be bought using those two figures don't we? Obviously we don't, otherwise we wouldn't be doing this.

Take a look at the top three and bottom three payrolls compared to where they finished in the standings (for some reason, I'm having problems finding the 2000 rankings but I'm sure that they are comparable):

Top 3 Payrolls Finishing Third or Higher: 26 teams
Top 3 Payrolls Finishing Fourth or Lower: 4 teams

Bottom 3 Payrolls Finishing Third or Higher: 7 teams
Bottom 3 Payrolls Finishing Fourth or Lower: 23 teams


From the looks of things, it seems that the size of a team's payroll can actually provide an indicator as to where that team might finish in the standings. I don't believe this provides a competitive balance on the field if a team can almost literally buy a championship. Do you disagree?

MIKE: Well, I have to say it is great to see some cold, hard facts to support your argument rather than regurgitated Bud Selig rhetoric! Unfortunately, the point you are arguing has never been at issue. What I have argued, and continue to argue, is that the teams that carry a large payroll today are not the same teams that carried a large payroll yesterday. And the teams that are successful today are not the same teams that were successful yesterday. Success - both in terms of wins and dollars - changes hands every year, as you would expect it to do in a fair, competitive environment. If the same teams won every single year, or carried an enormous payroll every year, or lost every year, or carried a tiny payroll every year, then I might see a problem in baseball that would need to be fixed. But I don't see that at all. If anything, I see a game that is more equitable now than it has ever been.

Now, let's get back to your analysis for a minute. In theory, it certainly seems to be EASIER to field a competitive team given a higher payroll because the margin for error is greater. For example, the Yankees can afford to overpay Tino Martinez and still have enough money left over to field a competitive team. But certainly, we have seen teams with low payrolls field competitive teams (such as Oakland and Chicago last season) and teams with high payrolls field horrible teams (such as Los Angeles and Baltimore.) The White Sox and Orioles were separated by more than $51 million in payroll last year, yet Chicago won 21 more games. So while it is harder for low-paying teams to win, it is certainly not impossible.

Given that, I have decided to test your theory by running some numbers of my own. I ran the same formula I used earlier, separating different teams every year into three groups based on payroll, adding the wins those teams earned, then dividing to get an average number of wins per team. What I discovered was pretty startling:

As you can see, in 1998 and 1999, the teams who were in the top third in payroll outperformed the teams in the bottom third by an average of 34.5 percent! Not coincidentally, this was around the same time that we really began to hear the rhetoric from Selig's camp on how the disparity between the "have's" and "have not's" was destroying the game. Looking at the numbers from those two years alone, it's hard to argue that not only is there a clear correlation between winning and payroll, but teams that don't pay the big bucks have seemingly little chance of competing.

But now, take a look at all the other years. In EVERY OTHER YEAR between 1992 and 2000, the difference between the "have's" and "have not's" was less than ten percent. And in FOUR of those nine years, the "have not's" actually out-performed the "have's!"

This, to me, is a completely mind-blowing discovery. I only wish I had payroll data from prior to the 1992 season so I can run this study back even further. The question is: what does this tell us? I'm no expert, but I have a couple of theories. I'd like to see what you think of them:

Theory #1: 1998 and 1999 were statistical anomalies. Given a large enough sample size (say, over 100 years), if you group teams by any criteria (say, striped jerseys versus non-striped), you are likely to find one or two years where one group vastly out-performs another simply by random chance. 1998 and 1999 just happened to be two years where teams in one group (high payroll) out-performed teams in another (low payroll), and this has no relevant correlation whatsoever.

Theory #2: Under the terms of the 1995 Collective Bargaining Agreement (you know, the CBA that resulted from the cancellation of the World Series), teams that ranked in the top five in payroll were forced to pay a luxury tax to teams ranked in the bottom five in payroll between the years of 1997 and 1999. This tax was supposed to "even out the playing field" between the "have's" and "have not's." Instead, owners from Minnesota and Montreal (and other "small market" teams) pocketed this money. It seems reasonable to assume that these "small market" teams made no effort during this three year period to raise payroll, as they were promised this free money from the "big market" teams. (Note for all you liberals: this is similar to the way that folks on welfare make no effort to get a job because they know they will be given free money taken from those who do work.) By shedding payroll (and, in the process, quality players) without concern for on-field performance, it only stands to reason that these teams far underperformed the teams at the top.

It should be noted that since the luxury tax ended, Montreal doubled their payroll. Of the two theories, I'm leaning toward the second one. I'm curious to see how you would explain this.

SCOT: Mike quoted, "If the same teams won every single year, or carried an enormous payroll every year, or lost every year, or carried a tiny payroll every year, then I might see a problem in baseball that would need to be fixed. But I don't see that at all. If anything, I see a game that is more equitable now than it has ever been."

Hello? Anyone there? You have noticed that the Yankees have now won four of the last five World Series played don't you? Thank you...that will be $5.89...please drive thru.

Of the ten years that I listed before (1990-1999), the Yankees finished in the top three payrolls an unremarkable 6 times. To me that says the Yankees have been in the top 10% of payrolls more than half of the time during the 90's. The Atlanta Braves carried a payroll that was in the top three 4 times and won their division 8 times. They might have won 9 if '94 wasn't cut short, but we'll never know. The Expos on the other hand were included in the bottom three payrolls 6 times yet only came close to the post-season one time, which also was marred by the strike.

I don't pretend to know what is best for a team financially. When it comes to signing free agents or even their own players either a team has the money or they don't. Let's take into consideration that the league as a whole is only as good as it's worst team. If the tuxedo wearing Yankees go into the Metrodome and kick the living hell out of the financially strapped Twins, does that really say that they are the better team, or that the Yankees really don't have any competition there?

MIKE: We're not really going to judge whether baseball is fair based solely on who wins the championship are we? You yourself have already tossed out post-season appearances as a possible criteria for measuring the word "compete." Yet now, it seems that you are using not only post-season appearances, but something as arbitrary as championship victories, as the sole barometer of your argument. I'm sorry, but you can't have it both ways.

The fact is that out of the eight teams in the playoffs last year, the Yankees owned the worst record. And the difference between the Yankees winning four of the last five championships and only two of the last five comes down to one unlikely home run by Jim Leyritz off Mark Wohlers (or, I suppose you could argue irrationally, a stolen home run by Jeffrey Maier) and a dropped fly ball by Terrence Long. You simply cannot make any rational judgments about one team's superiority over another based upon a five or seven game series. The more games that are played, the more convincing a win total becomes. That's why it makes more sense to look at a 162 game season instead of just 5-to-19 post-season games. You asked if a team can maintain a "competitive balance" in today's current economic environment. Let's stick with the topic at hand.

When you talk about how the "tuxedo-wearing Yankees kick the living hell out of the financially strapped Twins", are you talking solely about a match-up of today's Twins and Yankees? Because in the late 80's and early 90's it was the Twins who opened a can of whoop-ass on the Yankees and every other team in the American League on a regular basis. The Twins were the darlings of baseball, featuring home-grown talent, playing in front of packed houses every single night, while the Yankees were wallowing at the bottom of the A.L. basement, collecting their prized Brien Taylor trophy as their reward for a last-place finish. But guess what? The game wasn't any less "fair" then than it is now. What goes around comes around, Scot. Why is that so hard for you to see? Why are you so blinded by the seemingly arbitrary events of the recent past?

You also talked about how the Yankees and Braves have managed to sustain great success over the past decade. You attribute this success solely to their payroll and nothing else. I wonder, then, what your opinion is of the 1976-1985 Kansas City Royals. During that ten year span, Kansas City finished in first place six times and second place three times. Was this due solely to their high payroll? Or did it have something to do with their tremendous scouting and front office intelligence?

If you're still unconvinced that today's successful, big-spending, "large-market" teams were yesterday's unsuccessful, penny-pinching, "small market" teams, then let me give you some more numbers to chew on.

If we take my formula, grouping teams into thirds based on their 2000 payrolls, you get three distinct groups:

Group #1 (Large Markets): Yankees, Dodgers, Orioles, Braves, Red Sox, Mets, Diamondbacks, Indians, Rangers and Devil Rays.

Group #2 (Mid Markets): Rockies, Cardinals, Cubs, Tigers, Mariners, Angels, Padres, Giants, Astros and Phillies.

Group #3 (Small Markets): Blue Jays, Reds, Brewers, Expos, A's, White Sox, Pirates, Royals, Marlins and Twins.

Now, if my theory is correct, the teams in Group #1 should switch places with the teams in Group #3 if you look at a ten year span. If your theory is correct, the teams in Group #1 should always maintain dominance over the teams in Group #3 regardless of what year it is. Let's see who is right:

Looks like I was right. The teams in these three groups have completely switched places over the past ten years. And guess what? I'd wager a good chunk of change that they will switch places again over the next ten years.

If you look really close, you can see the pendulum beginning to swing already. Look into your crystal ball and imagine the following teams ten (or even five) years down the road: the Mets, Dodgers, Orioles, Diamondbacks, Reds, A's, White Sox, Royals, Marlins and Twins. Every championship-caliber team in baseball history with a sustained level of success lasting five years or more all have one thing in common: a tremendous farm system capable of generating replacements for aging vets and/or trade bait. The Yankees and Braves have not been successful dynasties throughout the past decade by accident. It all started with the farm. Jeter, Williams, Pettitte, Rivera, Posada, Milton, Snow, Davis, Hernandez, Mendoza, Hitchcock, Kelly, and even Ruben Rivera have made the Yankees a dynasty. And Chipper Jones, Andruw Jones, Furcal, Lopez, Glavine, Smoltz, Millwood, Rocker, Wohlers, Stanton, Klesko, Dye, Chen, Wright and Justice have all contributed to an extended run of success for Atlanta.

The Mets, Dodgers, Orioles and Diamondbacks all have horrible farm systems and rosters full of aging vets. The Reds, A's, White Sox, Royals, Marlins and Twins all have excellent farm systems and rosters full of good, young players. It isn't hard to see that this shift in the balance of power will happen sooner rather than later.

If we're talking about one team's ability to "compete" with another team, we are really talking about one team's ability to beat another team, right? And the only way we can measure that ability is with wins and losses. I believe I have demonstrated beyond a reasonable doubt that teams have been competitive with other teams whether they are grouped by payroll, population or TV market.

So my question to you is still unanswered. How do you explain the fact that teams in the bottom third in payroll have won nearly as many - and often MORE - games than teams in the top third in payroll for seven of the last nine years? How do you explain that teams from cities with small populations and/or TV markets have been as successful - if not more so - than teams from large populations and/or TV markets? If your theory is correct, why can't we see any evidence of it?

SCOT: Your correct in your model here but where you and I differ is that you believe the pendulum is swinging back while I believe it's not coming back. Sure, the small market teams (or Group #3 for arguments sake) are going to make a run every once in awhile, I showed you that in my example.

The fact still remains that some teams are spending a lot more money for talent than other teams. Those teams that are spending the money are winning while the teams that refuse/can't are not. That does not provide a competitive balance in any shape or form, no matter which way you turn or twist it.

This is obviously a debate that I'm sure we will never agree on. I'm closing my argument here for two reasons; first neither of us is convincing the other, and second, I've got too much going on in my personal life to continue on. I hope that everyone has as much fun reading and forming their own opinions on the matter as Mike and I have had battling it out.

MIKE: Well, I'm surprised and saddened to see this debate come to such a sudden end. But I'd like to thank you, Scot, for taking the time to debate this issue with me.

Believe it or not, I can sympathize with you as a fan of a team that just doesn't seem to be going anywhere. Back in the late 80's and early 90's, it was extremely frustrating to be a Yankee fan. Those who knew me back then probably remember my daily mantra: "As long as George Steinbrenner owns the team, the Yankees will never win another World Series." Every year, I watched as an endless wave of good, young prospects like Fred McGriff, Doug Drabek and Jay Buhner walked out the door. And in their place, an endless wave of aging has-beens like Don Baylor, Steve Kemp and Roy Smalley came into town, hailed as saviors by our clueless King George.

Back then, it was much easier for me to blame George Steinbrenner for everything that was wrong with the franchise rather than looking at the entire organization as a whole. Today, it is much easier for you and other fans of "small market" teams to blame the economic system for your favorite team's woes. It is human nature to look for an easy excuse rather than conduct a thorough investigation. Hell, I even heard Boston Red Sox fans bemoaning the "enormous disparity in payrolls" between the Red Sox and Yankees between the time the Yankees picked up Mike Mussina and the time the Sox acquired Manny Ramirez. Now that the Sox rank ahead of the Yankees in payroll, I don't hear that as much anymore. Payroll disparity has become the ubiquitous crutch of fans, players, owners and baseball writers alike. And it is a myth.

Just as I once believed that the Yankees would never again compete for a championship, you now believe that your Royals will never compete. I'm sure fans of the Cleveland Indians felt the same way back in 1993 when they were a sub-.500 team with a payroll that ranked 26th out of 28 teams. I'm sure that Texas Rangers fans also felt the same way back in 1995, when their team was in the middle of the pack in both wins (74) and payroll (13th.) Even fans of the National League champion New York Mets must have felt a bit of dismay just five seasons ago when they ranked 21st in payroll and won just 71 games. The year before that, the Mets won 69 games with a payroll that ranked last in baseball.

But things change, sometimes more quickly than we realize. As I said before, the Royals have an excellent core of young, talented players. To me, it doesn't seem to be out of the realm of possibility that within the next few years we'll see these players develop and mature into one of the better teams in the league. Provided, of course, that they are managed properly. And that is really the key to this whole argument: management. If there were some way to quantify management, I would rank all teams into three buckets and get an average number of wins for each group. I guarantee the teams in the first bucket would win at least 20 percent more games than the teams in bucket #3 year after year after year.

Unfortunately, all the solutions we've been hearing to this great "problem" don't address the real issue here, which is bad management. If you handed the Montreal Expos an additional $15 million and forced them to spend that money on payroll, would they know what to do with it? Fortunately, we already know the answer to that question: no. Last year, Montreal spent $15 million more in payroll than the year before. What did they do with that extra cash? They traded a good, young hitter (Brad Fullmer) for an aging vet (Lee Stevens.) They traded two good, young pitchers (Jake Westbrook and Ted Lilly) for Hideki Irabu. They spent millions on Graeme Lloyd, who didn't pitch an inning last year. They spent millions on Steve Kline, another middle reliever. And they traded away their most desirable trade bait (Rondell White) for a mediocre prospect (Scott Downs.) In short, the Expos just don't get it. And throwing money at them won't make them any smarter. The same goes with Pittsburgh, who would likely just spend that money to extend the contracts of Pat Meares, Wil Cordero and Derek Bell a few more years.

In summary, Scot, I am sympathetic to your plight. I understand your frustration. But I feel you are letting your emotions take over your senses when you blame the system instead of the folks in charge. Once again, I thank you for a spirited debate. If I've caused you (or any other Selig disciple) to rethink your position even a little bit, I consider this to have been a worthwhile endeavor.