THE BOOK--Playing The Percentages In Baseball

Friday, October 14, 2011

Chance of making playoffs, based on payroll

By Tangotiger, 10:11 AM

Back in April 2010, I had a quick indicator to determine the chance a team of making the playoffs (or, more accurately, having a playoff-level team, i.e., winning at least 89 games):

Chance of Playoffs = (Payroll Index / 2) - 23

I figured I’d check to see how it worked out for 2011. Payroll Index is simply the team payroll divided by the league average. Anyway, let’s see what we get (doing this as we speak):

PayIndx 89winChance    Wins    
218%    86%    97    New York Yankees
186%    70%    102    Philadelphia Phillies
174%    64%    90    Boston Red Sox
149%    52%    86    Los Angeles Angels

138%    46%    79    Chicago White Sox
135%    44%    71    Chicago Cubs
128%    41%    77    New York Mets
127%    41%    86    San Francisco Giants
121%    38%    63    Minnesota Twins
114%    34%    95    Detroit Tigers
114%    34%    90    St. Louis Cardinals
112%    33%    82    Los Angeles Dodgers

99%    27%    96    Texas Rangers
95%    24%    73    Colorado Rockies
94%    24%    89    Atlanta Braves
93%    24%    67    Seattle Mariners
92%    23%    96    Milwaukee Brewers
92%    23%    69    Baltimore Orioles
82%    18%    79    Cincinnati Reds
76%    15%    56    Houston Astros

72%    13%    74    Oakland Athletics
69%    11%    80    Washington Nationals
67%    11%    81    Toronto Blue Jays
61%    8%    72    Florida Marlins
58%    6%    94    Arizona Diamondbacks
53%    3%    80    Cleveland Indians
49%    2%    71    San Diego Padres
49%    1%    72    Pittsburgh Pirates
44%    -1%    91    Tampa Bay Rays
39%    -4%    71    Kansas City Royals

The top 4 teams based on payroll had an expectation of seeing 2.7 teams winning at least 89 games. We actually had 3, and the Angels barely missed out on that.

The next 8 teams in payroll had an expectation of 3.1 teams winning at least 89 games. We had 2, with the Giants barely missing out.

The 8 teams after that had an expectation of 1.8 teams, and we had 2 above, and one that hit 89 on the nose.

Finally, the bottom 10 teams had an expectation of 0.5 teams, and we had 2.

The results don’t seem out of line from expectations. It’s a bit hard to tell because we had 10 teams with at least 89 wins, which is two more than normal. You certainly can’t conclude that payroll doesn’t matter.

(Negative chances are the result of making the equation linear. So, it’ll break down at extreme levels, and having a payroll at less than half the league average is a breaking point.)

• Sabermetrics • Finances

#1 Steven Ellingson (see all posts) 2011/10/14 (Fri) @ 11:08

Reading your last sentence (before the parentheses), the first thought that popped into my head was “Of course, but no one actually thinks that!”

Then I was reminded of the multiple people who I’ve heard opine that the Twins are actually worse off BECAUSE of their high payroll - because they aren’t as smart with it or something like that. I’ve never argued with one of these people, because life is too short to argue with stupid people, so I don’t know if this is one of those things people say that they don’t really mean, or if they would actually defend this position.

The main basis of this “argument” would probably be the Mauer contract, though these would are probably the same people who railed on the Twins for being cheap and letting Hunter and Santana go.

#2 Tangotiger (see all posts) 2011/10/14 (Fri) @ 11:18

I think there is something that if you give someone too much money, that they won’t spend it wisely.

We had that situation with the Expos, when they decided to give management “extra” money, and they spent it on Graeme Lloyd and Hideki Irabu. It was money thrown down the toilet from what I remembered at the time of the announcement. (I never bothered to check if it’s true.)

We have this problem right here at my corporate america office. Each department is given a budget, and it’s a “use it or lose it”. They can’t roll the surplus to the next year. And, instead of being a good corporate department, and giving the money back, they instead spend it on whatever they can, and get whatever they can out of it.

They do it not only for this year, but for next year. Because if they don’t spend it this year, they can’t then justify the same or higher budget the next year!

Imagine my department is allocated 2MM$ for its operations (I have no idea what the number actually is). They’ve wisely spent 1.8MM$. Now, here are their choices:
don’t spend any more
and when it comes to asking next year, you have to beg and plead to maintain 2MM$ budget

spend the extra 0.2MM$ on whatever you can
and when it comes to asking next year, you can make an easy case to increase budget to 2.2MM$

There’s an inefficiency in spending that last dollar, if you look at the company in subdivisions like this. (Is there some economic principle that supports my experience here?)

Spending money on free agents is similar to that, that unless you get a great deal on a player, then a big share of long-term free agent deals will likely blow up in your face.

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THE BOOK--Playing The Percentages In Baseball

Friday, October 14, 2011

Chance of making playoffs, based on payroll

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