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Wednesday, July 22, 2009
How many wins are those dollars buying?
This is from 1998-2009 (as of July 22). This is what I did:
1. Figured the team payroll relative to the league average every year. That’s my team payroll index.
2. Took the average by team. Average is obviously 100%. Yankees are over 200%. Marlins at 50%.
3. Figured the team win% for that same time period. Average is obviously .500. Yanks at .580. Royals/Rays at .428.
4. Figured the best-fit linear line: win% = .41 + .09*PayrollIndex . The correlation coefficient (r) was 0.75.
5. Figured a non-linear best-fit line as: Take the PayrollIndex, and set it to halfway between there an 100%. So, the Marlins come in at 75% (halfway between 50% and 100%). That 75% represents the ratio of wins to losses. So, if you spend at half the league average, you should have 3 wins for every 4 losses (or a .429 win%).
The best-managed team is the Twins, who have a .500 record, but are spending like a .450 team. The worst is the Orioles who spend like a .510 team, but have an actual .460 record.
Before you ask, the Yanks spend like a .610 team, but have a .580 record.
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