The Astros, the Dodgers, and World Series Payrolls

Last year’s World Series featured a true face-off between big and small markets, pitting the high-revenue Chicago Cubs against the lower-revenue Cleveland Indians. The difference in each club’s markets materialized in their respective payrolls: Chicago outspent Cleveland by roughly $90 million in 2016. The contrast was stark.

This year’s Series represents a different kind of contrast. Everyone’s aware of the Dodgers’ financial might, of course, but the Astros enjoy a large market, too. And even if that hasn’t been obvious recently, the club’s payrolls from a dozen years ago reflect the club’s spending capacities. Over the last decade, however, the team has executed a massive tank-job and also navigated difficulties with their gigantic television deal. The result? Dramatically lower payrolls. The rebuild has worked, however, and the club’s payroll has nearly doubled in just the last two years. However, that payroll is still in the bottom half of baseball and represents only half of the Dodgers’ expenditures in what is the largest disparity in World Series history.

I would be remiss when discussing the disparity between the two teams not to mention that the gap between the clubs’ payrolls is much more modest when comparing only active rosters. Carl Crawford has been gone from the roster for quite some time, but his $22 million salary is still on the books. Scott Kazmir is hurt. Adrian Gonzalez is in Italy. Those three account for around $60 million in salary alone. A handful of other players are no longer on the team. As a result, the Dodgers’ 25-man World Series roster is earning “only” $143 million. Even with all the money the Dodgers have written off, they still have an active roster that would place them in the top half of MLB payrolls. As for the Astros, their World Series roster comes in at around $115 million.

The graph below depicts the 50 players currently participating in the World Series and the amounts owed to them by the Astros and Dodgers this season. (Clicking in the upper right corner should make it bigger.)

Clayton Kershaw is making more than double the amount of the second-highest-paid player in the World Series (not counting full salaries for Justin Verlander and Brian McCann), and he’s probably worth twice what he’s getting paid. A few of both teams’ best players are making the league minimum or near it: Cody Bellinger, Alex Bregman, Carlos Correa, and Corey Seager all produced roughly four wins or more this season and none are receiving more than $600,000 this year. If we were to use actual year-long salaries for players like Justin Verlander, the payrolls between the two teams’ World Series rosters comes pretty close to even.

As mentioned in the first paragraph, Houston isn’t exactly a small market. As the graph above shows, there’s virtually no disparity between the on-field salaries of the two teams. Yet, when it comes to total payroll, the difference between Los Angeles and Houston is bigger than any we’ve ever seen.

The ability to write off mistakes is an advantage for Los Angeles. As for Houston, they’ve had a different sort of advantage — namely, of having been able eschew every bad contract from the previous regime without having to assume any new ones. Only since the team’s young core has begun to emerge has the club invested in higher-priced commodities. They traded for Brian McCann, and signed both Josh Reddick and Carlos Beltran before the season. They signed Yulieski Gurriel out of Cuba to a $47.5 million contract. They were able to take on a significant portion of Justin Verlander’s remaining deal after all other teams passed on him during waivers. Even with all the arbitration salaries, they will only have $130 million in salaries heading into the winter, and with their market, their television situation settled, and this World Series run, they should be able to afford a lot more. Right now, though, that disparity is big.

At this time last season, I noted that the difference between the Cubs and Indians’ payrolls, at $88 million, was the third largest in World Series history. It’s now been bumped to fourth. At that time, the Yankees and Marlins had the biggest gap, back in 2003. In that series, the Marlins upset the Yankees. Since that 2003 series, there have been eight World Series matchups with at least a $20 million payroll disparity between the two relevant clubs. The team with the larger payroll has won all eight matchups. In the five matchups featuring clubs within $20 million of each other since 2003, the higher payroll team is 2-3. We know that the playoffs are pretty much a crapshoot and this record is probably more a fluke than meaningful data point, but it’s at least an interesting bit of trivia.

If we adjust for inflation in terms of the overall economy, the Marlins-Yankees Series remains atop all the others in terms of payroll disparity; this year’s version appears in second place by about $30 million or so. However, inflation in baseball has risen much faster than outside the sport. If we adjust for inflation using baseball salaries, we can see just how large a gap we have between the Marlins-Yankees and every other matchup.

In today’s dollars, the difference between the Yankees and the Marlins isn’t too far from the difference between this year’s Dodgers and that $29 million payroll the Astros ran back in 2013, a season that led to 111 losses for Houston. Payroll still matters in baseball. Arizona, Cleveland, Colorado, Houston, and Minnesota all made the playoffs with relatively modest payrolls, but so did the Yankees, Red Sox, Nationals, Cubs, and Dodgers. There are a lot of ways to acquire talent and Houston has spent the last decade amassing draft picks and avoiding mistakes on big long-term contracts (because they weren’t signing any).

Talent wins out and that’s what got Houston — and the Dodgers — to the World Series. The Astros have begun to use money to supplement their young players and, this year, the result is a World Series appearance. The Dodgers have spent a lot of money on talent that isn’t even present with the club, but they’ve also spent a lot of money on players who are helping in the World Series. Big money has won in the World Series lately, but we have a pretty even matchup. How much the teams have paid isn’t likely to affect how they play in the World Series.