By: Patrick W. Zimmerman

Apparently the Oakland A’s just are that efficient.  They are not just the team most closely associated with spotting market inefficiencies (thanks, Michael Lewis and Brad Pitt!), but they also seem to actually do best when they spend frugally.

We thought we’d dig into baseball’s conveniently vast (and free) reams of data to look at which teams offer the most bang (measured in run differential in a given season) for buck (the percentile of each team’s payroll in a given year).  We’ll go as far back as reasonable payroll data exists, which means 1988, the end of baseball’s (first?) collusion and the re-opening of modern free agency.

The question

Is spending money to construct a baseball roster a skill, or do teams just luck into good buys (or terrible ones)?

The short-short version

Yes, there is.  The A’s lead the pack at efficiently generating good teams, and the Blue Jays and Mets suck at it.

Why aren’t the Yankees and Red Sox at the bottom? Well, because they spend like crazy but also generally have good teams as a result.

Also, apparently the Atlanta Braves are the one franchise whose payroll is most closely linked with their success.  When they spend, they win; when they don’t, they stink.  No one else is even close to their 0.74 correlation between payroll percentile and run differential (next is Washington/Montréal with a correlation of 0.48 and then a bunch of teams in the mid-0.40s).  We have no idea what that means, and suspect it might just be the baseball gods trolling us through randomness.  Or that Atlanta had one amazing generation of players that was well paid, and also had plenty of completely lost seasons.

The results

¿Quién es más listo?

Oaktown.  Next question.

Mouseover for details.

Ok, fine, we’ll elaborate.  We looked at a team’s typical season over the last 30 years (1988-2018), in terms of how much they spent relative to the league and how well they did.

This seems about right.  At the level of franchise history (or, skill of front office), there’s a decent correlation between money and happiness (r²=0.40), but some teams are also clearly better at it (and some worse).  There are good teams who spend a ton (Evil Empire, Evil Empire’s whiny little brother), and there are teams that spend a lot with mixed results (LOL Mets and Angels).  There are also a few cheap, decent teams (Oakland, Cleveland).

And then there are the Pirates, who turned 100-loss seasons into an art form for 20 years.

Looking at the numbers, the A’s top the chart, followed by Washington/Montréal, Tampa, and the White Sox.  We calculated efficiency by taking a team’s run differential for a given season, and dividing it by their payroll percentile (if a positive run differential) or by that percentile subtracted from 1 (if negative, to account for the sign change – we didn’t want to reward a team for spending a lot on a negative run differential). 

Basically efficiency = how many more runs did a team score than its opponents, corrected for how much it spent.  Bang / bucks.

Fun nuggets:

• Franchise with the least-bad worst season (in terms of efficiency): The 2008 Washington Nationals, with a -21.1 efficiency score (compare that to the disaster that was the 1995 Blue Jays).
• Franchise with the least-good best season: The 2015 Kansas City Royals. Sure, they won the World Series, but they only managed a 18.1 efficiency score. Nothing remotely like the 1996 Expos and their 730 mark.

Want to see each team’s history?  Ok, glad you asked!

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What’s next?

It’s time to start breaking teams down into components. 

A question we’ve been tossing around is: where should a team allocate its payroll?   Starting pitchers?  Hitters?  Relievers?  Grit? (Haha. No.)

A positional breakdown might be interesting.