Fun with statistics: The lowest payroll among the eight highest revenue teams, measured in terms of percentage of total team revenues, belongs to the Yankees, right in line with league average.



The Yankees have the highest payroll in baseball, in absolute numbers. Everyone knows this. This has been the case for the last 10 years at least.

But here’s an odd fact: take the top 8 revenue-earning teams in baseball (Yanks, Red Sox, Cubs, Phils, Mets, Tigers, White Sox and Angels). Make a guess: which of these 8 teams spends the lowest percentage of revenues on player payroll?

The lowest payroll among the top 8 revenue teams, measured in terms of percentage of total team revenues, belongs to the Yankees.

The biggest payroll in baseball, in terms of percentage of team revenues, belongs to the Detroit Tigers. In second place: The Boston Red Sox.



The average payroll in baseball equals 46.4% of average team revenues. So in this sense, the Yankees have an average payroll.

Aren’t statistics fun?

Yes, I understand: the Yankees do not have a small payroll. The truth is, the Yankees have huge revenues. If the Yankees spent revenue on payroll at the same percentage as the Tigers, the Yankees could add another $80 million in player salaries! They could add Ryan Howard, John Lackey, Matt Holliday and Roy Halladay, with money left over.

Scary. The Yankees are actually showing salary restraint?

The numbers also show that the Red Sox have a large payroll. Our neighbors to the north spend aggressively on their 25-man roster.

I’ll close with a statistic about the Red Sox payroll, to match the statistic from Mark Attansio about the cost of the Yankees infield:

The salaries for five part-time Red Sox players spend more on salaries for five part-time players (David Ortiz, Mike Lowell, Bill Hall, Jeremy Hermida and Jason Varitek) represent more total money than the Padres spend for their entire team.



http://itsaboutthemoney.net/archives/2010/...age-not-really/

Nittany -- Thanks for posting. Exactly the point that I and some others on this board have been making about the Yanks, second tier market teams, and MLB. That is why this is a complex issue and major changes are unlikely. The Yanks benefit from a tremendous revenue stream, a portion of which they choose to invest back into the team, no different than when a smart business corporation chooses to invest some of its profits back into the firm. Is it fair to Kansas City? Probably not but it goes back to the inherent strengths that large market cities have over small market cities. It also doesn't help when you have small market teams whose ownership choose larger profits for themselves at the expense of lowering payroll or other costs. This is an argument that is waged forever but MLB has done well for years and enjoyed record attendance so management's attitude is why slaughter the cash cow. BTW, if attendance is down this year so far, it's a reflection of the economy and not the game dynamics, as both small and large market teams suffer.

I d'ont and never will buy an argument like this. I have my own business, it's service oriented and guess what - my payroll expenses to revenue are the same exact level of Goldman Sachs. Does this mean I can compete with them if I was in the finance industry? I've explained many times that the big problem for most small market teams is that by trying to compete against teams with payrolls that are double and triple theirs, and in some cases 4-5X, is that the added expense will simply make them win 70-75 games instead of 60-65. They won't win anything and they will simply deflate profits. It's a terrible business decision to invest went you can't make the level of investment you need to make something work, or to maintain it if it does work. So the old argument of do it right or d'ont do it at all prevails. The only realistic hope of a small market team like the pirates is to land powerhouse pitching that gets them a wildcard and then they can easily win a short series. When free agency arises they lose that pitching. The ability to land both strong pitching and hitting from a lot of non-free agent personnel ala Tampa Bay is going to be very rare. And guess what player the Yankees will sign by next year for LF. This problem goes away if MLB phases out most small market teams. I d'ont see how it cannot do that longer term. This disproportionateness that is now MLB is only in it's baby years. It will do nothing but get worse and worse because it's a run away capitalism greenhouse right now.