MLB: 2023 is looking like the season of reckless waste of money
2023 has been a bad year for money in Major League Baseball (MLB).
The New York Mets laid out $330 million for talent (including Justin Verlander) and six weeks into the season they’re below .500. The San Diego Padres paid $250 million for what looks like a losing team. The Chicago White Sox spent $181 million and they’re pushing last place in a weak division.
The dictum that the last shall be first is holding up pretty well. The Tampa Bay Rays, with baseball’s third-lowest payroll, have the game’s best record. The Baltimore Orioles, with the second-lowest payroll, are second in winning percentage.
The Arizona Diamondbacks, with a $116 million payroll, have a better record than the Yankees ($278 million), Phillies ($243 million) or Astros ($179 million).
What in the name of John D. Rockefeller is going on?
The answer isn’t as simple as one explanation. Injuries obviously play a part, as do simple misjudgments and scheduling differences. The latter, at least, will work itself out by season’s end.
But one major part of the answer is often overlooked, both in team executive offices and in the commenting media. It is this: You can’t buy wins.
That’s actually a little overstated in order to make a point, so let’s rephrase for true statistical accuracy: You can’t reliably buy wins.
Since 2007 — that’s 15 full seasons plus the abortive 2020 season and part of 2023 — the average annual correlation between a team’s Opening Day payroll and its winning percentage works out to a very tepid 35 percent.
How about this year? Well, if we get as high as 35 percent, it will mark quite a shift in the fortunes of the game’s biggest spenders. Through six weeks, the correlation between team payroll and team winning percentage is a remarkably low 13 percent.
If that holds up through season’s end — the odds say that’s unlikely but possible — it would be the weakest correlation between payroll and performance in decades. Since 2007, that weakest correlation was just 16 percent … but that was for the 2020 Covid season.
The weakest for a full 162-game season was 21 percent back in 2015.
Teams — and the people who write about teams — routinely wax rhapsodic about spending vast sums of money, such as everybody who talked about the Mets and Padres did just this past winter. This past winter in particular, they may have been swayed by the outcomes in 2022, when money turned out to correlate very nicely with winning.
The 2022 correlation was 58 percent, the strongest since 2016. And it’s true, the big-money teams (Mets, Dodgers, Yankees, Padres and Phillies) all reached postseason play last year.
The problem was that statistically 2022 probably represented an event, not a trend. In fact, there is no trend with respect to spending and winning, unless it’s that the one only coincidentally leads to the other.
To know that, all you have to do is examine the historical relationship between the two. Here are the numbers for the 10 most recent full seasons; that’s 2012 through 2019 plus 2021 and 2022. As you look at this, remember that 1.000 indicates a supreme relationship, .000 indicates no relationship whatsoever. Also look closely at the season-to-season fluctuations.
Only twice in the decade did the data suggest that money played a significant role in the outcome of the MLB pennant race.
Why is money such an overrated factor in team outcomes? The answer is simple when you think about it. Historically, most money is spent on veteran players who tend to be toward both the end and the least productive portions of their careers.
Production, by contrast, tends to come from players in their third through sixth seasons. Those are seasons when, dictated by the negotiated salary structure, they tend to be paid less. That, in turn, means the real driver of success on the field is success in the scouting, drafting and development phases of team operations.
That’s not a perfect explanation. Justin Verlander won the Cy Young Award last year at age 39.
And perhaps in recognition of the numbers, teams have in recent seasons committed bigger money to their younger stars. Yordan Alvarez and Ronald Acuna Jr. are now under contract to their teams through 2028, while Corbin Carroll, Wander Franco, Michael Harris Jr., Austin Riley, Fernando Tatis Jr. and Julio Rodriguez — all age 26 or younger — are tied to their teams into the 2030s.
If those players perform consistently over the long haul (and that’s a big if) spending might become a more vital factor in winning.
But consistency is always problematic in athletics. So is pitching, and it’s worth noting that of the eight young MLB stars listed above as having committed to long-term deals, none are pitchers.
It’s also worth noting, at least for the moment. that If the season ended today, one-third of the 12 postseason teams would come from among the 10 smallest-payroll teams. That includes the Pirates, Rays and Orioles, who with the Oakland A’s comprise the bottom four in payroll.
Even if that outcome doesn’t hold up into October, the number still offer a cautionary lesson. Any idiot can spend money. Spending it wisely usually takes skill.