Baseball’s Competitive Balance Problem

The current landscape of the game might charitably be called an era of superteams. Last year, the Yankees, Astros, Twins, and Dodgers all won more than 100 games. In 2018, it was the Red Sox, Astros, and Yankees; the year before that, the Dodgers, Indians, and Astros all won at least 100 times. The Cubs won 103 on their way to a World Series title, bringing the total number of 100-win teams over the past four seasons to 11. In the 10 years heading into 2016, only four teams hit the 100-win mark, and only the 2009 Yankees and 2011 Phillies won more than 100 games. Superteams are made possible by great players and smart organizations, but they are also made possible by having a bunch of bad teams to beat up on. The lack of competitive balance in today’s game is worse than it’s been in more than 60 years, back when there were only 16 teams and the reserve clause kept players from ever choosing their own employer.

One way to test baseball’s competitive balance is simply to take every team’s winning percentage in a single year and find the standard deviation. The smaller the standard deviation, the more teams are bunched toward the middle in a more competitive atmosphere. The bigger the standard deviation, the more teams are spread apart. Going back to 1903, this is what the standard deviation for team winning percentage looks like:

That line goes way up at the end and shows the least competitively balanced season since 1954. For a closer look, let’s break things down since 1961, when baseball first began to expand beyond 16 teams:

It isn’t difficult to see a pattern of imbalance in the expansion years. This should be expected, given that the league is adding two or four bad teams. The only other season that comes close to the last two years is 2002, at the height of the steroid era. That was mostly before the surge in popularity of advanced analytics; older, more expensive players were performing better than many of their peers, in part due to how two rounds of expansion had diluted the talent pool (and possibly in part due to chemical enhancement), which made it easier to buy wins on the free agent market. My theory is that the rise of analytics combined with steroid testing served to even things out between large- and small-payroll teams. It shouldn’t be a surprise, then, that during that time, the correlation between spending and wins was fairly low at the beginning of this decade, and has risen over the last few years as competitive balance has gone down, as seen in the graph above.

There were calls back in the early 2000s to fix the game’s lack of competitive balance. As we see in the graph above, the balance was fixed shortly thereafter for about a decade. To get a better sense of the trend, the graph below shows the three-year rolling average of the standard deviation of win percentage:

We have those early 60s years, which were less competitive as the league grew by 25%. That makes sense. There are a couple of other expansion-related spikes before 1980, and then we have one other big spike at the turn of the century comparable to what we are seeing now. Looking at the graph, it is fair to say that competitive balance is cyclical, and will go back down. The problem now is how quickly the problem has escalated. Just 20 months ago, competitive balance didn’t really seem like a major issue. In March of 2018, Ben Lindbergh wrote about the potential for Cubs and Astros copycats for The Ringer, but noted that the imbalance wasn’t that great at the time. In 2017, the standard deviation for winning percentage was .071, which looked right in line with the average over the last 60 or so years. Since that article, the lack of competition has become much clearer.

In his piece, Lindbergh noted that FanGraphs projections showed more expected imbalance for 2018, the fourth straight year of increasing standard deviation for projected wins. That season, the standard deviation approached 10 wins, after coming in around six to eight wins over the previous dozen years. Those projections proved accurate; the standard deviation for wins was higher in 2018 than any season since 1970 except for the 2002 season. And the projected standard deviation of wins got worse heading into this season, topping 10 for the first time. Again, the projections were correct, as this past season had the highest standard deviation for winning percentage since 1954.

Wins aren’t the only way we can measure the league’s race away from the middle; WAR can help out as well. The talent gap in baseball has never been wider than it was this past season:

Since the dawn of free agency about 45 years ago, the average standard deviation of team WAR has been right around 10, and had been above 13 just once, when the league added two teams in 1977. The standard deviation has been above 13 in each of the last two years and was 50% higher than average in 2019. As for why it matters, Baseball Prospectus‘ Rob Arthur found that non-competitive teams were a big driver of in-person attendance losses. Arthur looked at daily playoff odds to determine the competitiveness of the league instead of projections or year-end totals, but he reached the same conclusion: baseball has become increasingly non-competitive. (Arthur’s own analysis of competitive balance found that the Astros, Dodgers, and Yankees held an unprecedented share of the World Series win probability, using Baseball Prospectus‘ measures.)

Parsing how much of the current imbalance is due to the very good teams pressing genuine advantages in drafting, player development, and analytics versus playing against a league with an increasing number of teams voluntarily entering down cycles is difficult; this piece isn’t a commentary on “tanking,” which comes in many different forms, with some rebuilding efforts resulting in a better experience for fans than others. Some teams are really bad even when they try to win. And what’s good for the future of individual teams isn’t necessarily what’s best for the long-term future of the sport, either. But however those forces balance against each other, and they are each worthy subjects of analysis, it’s undeniable that the game is less competitive than it’s been in generations. And while this lack of competitiveness could be cyclical, there isn’t a clear solution to getting out of the current cycle. The big-market teams have caught up to, and in some cases passed, the smaller markets analytically. We’ve already gone two decades without expansion, so we can’t expect a more competitive landscape due to adjustments resulting from more teams. There doesn’t appear to be an easy solution. This is what Commissioner Rob Manfred had to say in June:

“When you talk to our owners, everybody’s competing,” Manfred said, when asked about the concerns of teams not competing. “The question is what are they doing to be competitive and at what stage in that process are they. I think at the end of the year, my guess is you’re going to have more parity in terms of the spread of winning percentages than we had last year, and that’s a good thing.

“Obviously the tighter the clubs are grouped, the better it is for us and for our business. I do think that in today’s game, it’s important to realize that as always there’s been a cycle to competitiveness and clubs are going to continue to go through those cycles.”

Manfred was wrong about his guess. He understands what the issue is (or at least could be) in terms of competitiveness, but it’s not clear he has come to grips with the fact that the problem is real and right in front of him. Worse, based on his “cycle of competitiveness” quote, he doesn’t appear to have a plan to solve the problem, instead hoping the issue will resolve itself. Hope and faith is fine for the rest of us, but ending this cycle will likely need some intervention from the owners and players to make the game healthier and more fun for its fans.

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Craig Edwards can be found on twitter @craigjedwards.

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Shalesh
Member
Shalesh

Craig chooses a good metric in w/l standard deviation to view competitive balance over the years, but I agree more with Manfred. Everything looks like a big problem if you look at the short-term of 1-3 years. Over longer cycles, the current superteam/tanker dichotomy is going to smooth out as teams that are currently bad focus more on developing strong farm systems so that they can maintain a higher win baseline over longer periods. I think baseball writers have been slow in recognizing the change from free agency as a big source of wins to minor league development and thus have been alarmist at every turn. In a few years, we’ll look back and laugh and how weirdly alarmist we all were.

Patrick Flaherty
Member
Member
Patrick Flaherty

I feel like saying it’s cyclical is hand waving. It’s not like “developing strong farm system” hasn’t been the mantra for 30+ years. You *need* several 5+ win players to compete for a title, and the best way to get them right now is to continue collecting lottery tickets and high draft picks until you hit on a few at the same time. Big market teams can afford to lock those players up and extend the window for their lottery tickets to hit, small markets can’t. So small markets trade their winners for more tickets. In the mean time, you count on ticket sales from the super teams coming to town to keep your organization afloat. There is no compelling reason for teams without a ton of cash to change that formula.

Shalesh
Member
Shalesh

Mantra? The J2 draft/Dominican has really only taken off in the last 7-8 years and I’d say that’s a bigger source of the spread between good and bad teams than big-market/small-market. Prospects are a much more important currency than Payroll $. Said differently: Farm System Rankings are a forward-looking indicator on team success and Payroll-Ranking is a lagging indicator. Build your core first, have success, then increase payroll to add good veterans to get to the WS. I agree that big-markets can have longer “windows” since they can extend their best players, but that doesn’t mean a small market can’t be playoff-able for a couple years, take a step back for a couple years, and then back in the playoffs .

sadtrombone
Member
sadtrombone

Well, small-market teams have done a pretty good job of extending one franchise player at a time, but ironically pretty much all of those contracts turn out to be disasters by the time the team is ready to compete again. The classic example of this is Joey Votto. You haven’t seen a lot of Joey Votto-ish contracts lately except Arenado and Blackmon, and while those contracts are/may turn into an albatross and the Rockies’ front office isn’t all that smart they did seem to sincerely think that they were going to keep on winning for a while.

Where the bigger market teams really shine is being able to do that with multiple guys at once. The Red Sox managed to extend Dustin Pedroia, and that didn’t keep them from extending Rick Porcello, which didn’t keep them from extending Chris Sale, etc. None of these contracts looked good eventually and they also didn’t keep them from locking up someone else later. The Giants also tried this, except they all turned into pumpkins at the same time. But smaller market teams, if they want to do that, they have to hit on an Evan Longoria really early. I don’t know exactly how fix it so that a team like the Royals hang on to a guys like Eric Hosmer after locking up Alex Gordon, but if you could that would solve a bunch of problems mentioned in this article.

DKH
Member
DKH

I think I understand your point, but that seems like an odd example since Hosmer has produced -0.5 fWAR since leaving the Royals.

I’m struggling to think of a better recent example, though. Seems like small market teams have completely avoided large contracts since the Votto signing. It’s more like the small markets think they can’t afford any risk, with the A’s trading Donaldson, Grandal only getting a 1-yr contract with the Brewers, the Indians not even giving Brantley a QO, etc.

sadtrombone
Member
sadtrombone

I struggled with that example too, but it’s also hard to find guys who would make sense to extend. Hosmer, being a face of the franchise and pretty young, seemed like a decent way to illustrate the point. Perhaps the Rays trading David Price instead of locking him up?

kevinthecomic
Member
Member
kevinthecomic

I think Craig was thinking about the Rockies when he wrote this line: “Some teams are really bad even when they try to win.”

Seamaholic
Member
Seamaholic

Plenty of teams would like to have been to the playoffs 2 out of the last 3 years. Rockies get a bum rap. They are dealing with the hardest to crack nut in baseball in their home stadium, and have still played October baseball quite a bit lately. How far they got in the playoffs is, as always, a crapshoot.