In 2019, Team Payroll and Wins Are Closely Linked
Over the last decade, we’ve seen a change in the demographics of baseball, with playing time shifting away from older, declining veterans toward younger players still in their prime. There’s a good reason for that, as each new generation of player entering the majors has been getting better and better relative to their older peers. Baseball’s owners have capitalized on this development — those younger, better players are also much cheaper. And teams have not reinvested those gains elsewhere on their rosters, as major league payrolls have stagnated the last few seasons while amateur talent expenditures have become hard-capped. Given the emphasis on younger players, it might be reasonable to believe that when it comes to fielding a winning team, payroll matters less than ever. But that hasn’t been the case this season.
This piece marks the fifth season during which I’ve taken a look at the standings in August and compared them to Opening Day payrolls (2015, 2016, 2017, 2018) and for the most part, the relationship between Opening Day payrolls and wins has been relatively low. I’ve used the Pearson correlation coefficient “r” to track the strength of the relationship between the two and from the end of the strike through 2011, the average correlation per year was .45. In the last seven seasons heading into this season, though, the correlation coefficient between the two was higher than .31 only once, when it was a high .62 back in 2016.
In past years, I’ve noted that while individual season correlations have remained low, looking at either sustained spending or using Forbes franchise valuations to gauge a team’s overall financial might tends to show that the relationship between spending, wealth, and winning remains strong. That logic remains for this season, and indeed, the relationship between wins and payroll trails only that of 2016 season this decade: