The State of League Parity

Mookie Betts
Rick Scuteri-USA TODAY Sports

With players and team personnel reporting to their spring camps, the 2023 season is almost upon us, with 30 teams set to play over 2,000 games in an effort to qualify just for a chance to reach the ultimate goal of a World Series. It’s a marathon of unparalleled scale in American professional sports, and when all is said and done, some of those teams may be separated by as little as one or two wins — or, though it hasn’t happened since the tragic assassination of Game 163 last winter, any of a series of tiebreakers buried somewhere in the season standings.

That such a long race can come down to the final days is part of what makes our sport brilliant, like some amplified version of Monday’s UAE Tour cycling photo finish my colleague Michael Baumann shared on Twitter. It is part of what makes us all tune in so faithfully for this marathon; over a long summer, the margins between the playoff-bound and the homebound can be paper thin. Just ask last year’s 87-win Phillies and 86-win Brewers, who finished their seasons with extremely different tastes in their mouths.

All this to say: competitive balance is, well, a delicate balance, and with the debut of our 2023 playoff odds last week, there’s no time like the present to evaluate the state of the league from a parity perspective. Competitive parity in MLB has been a hot topic for the better part of a decade as we’ve started to see megateams like the Dodgers and Astros routinely eclipsing 100 wins, and others getting more comfortable with finishing somewhere around 60. In the five full seasons since 2017, 17 teams have reached 100 victories; just five did so in the previous 11 years. On the other side of the standings, prior to 2019, there had been just one season in which as many as four teams lost 100 games; then four clubs did so in each of the 2019, ’21, and ’22 seasons. With that in mind, here’s a look at the disparity in team winning percentage at the end of each season since 1960:

A few things are clear: measures of parity are pretty susceptible to swings in either direction, and as for right now, we are playing through a particularly disparate era. After a seven-year low in 2014, disparity spiked over the next five years to a peak standard deviation of .098 in 2019 before effectively leveling out around .090 in the last three. Left unchecked, this could pose a risk to the delicate balance of maintaining an exciting and marketable 162-game regular season. A wider spread means fewer tight playoff races and more teams with known playoff fates in the latter months of the regular season.

To be fair, the issue is not unchecked. Owners have stressed competitive balance as a key issue in today’s game. Rob Manfred continues to address it in the press, though he has a tendency to cite the variety of league champions, which has more to do with playoff randomness than league parity, as evidence. Over time, the league has implemented a number of systems to promote competitive balance, to varying levels of success. Oddly enough, the “About MLB” page on boasts that the league “currently features record levels of competitive balance,” but whether they mean record highs or record lows is not specified.

Anyway, let’s dive into those projections, where we’ll find good news: the standard deviation of all teams’ projected winning percentages is ticking down in 2023 to its lowest level since 2016. Note that I am comparing this standard deviation to that of previous years’ projections, not final standings, so as to compare apples to apples (the spread of the projected standings will be smaller than that of the actual standings since the projected standings represent average outcomes, as Ben Clemens noted here). But the shrinking deviation indicates a leveling of the playing field, so to speak.

One of the factors that deserves some credit here is the new schedule. With teams now scheduled to play less than a third of their schedule within the division, the deviation of strength of schedule values has dropped from .0067 last year to .0048 in 2023. As Ben wrote here, the difference between the toughest schedule and the weakest is a matter of just 18 points this season after sitting around 30 points in recent full seasons. These things feed into each other — a more balanced league means a more balanced schedule for everyone — but while strength of schedule doesn’t tend to have a profound effect on any given team’s season, MLB’s shift to a schedule with more overlap between all teams is one step toward parity.

In terms of talent distribution, the league took a step back last year amid an era of imbalance. Former FanGraphs scribe Craig Edwards wrote about competitive balance in 2019 and noted that, in addition to seeing high deviations in winning percentage, we were also seeing historically high disparity in team WAR, which we would expect given the relationship between the two. From 2019 to ’21, this disparity dropped significantly, but last year, we saw it tick back up considerably, suggesting we aren’t through with this era of talent inequity.

Standard Deviations of Team WAR
Season Standard Deviation (Team WAR)
2010 10.32
2011 11.31
2012 10.34
2013 10.66
2014 7.89
2015 9.43
2016 10.22
2017 11.66
2018 12.99
2019 15.63
2020 5.27
2021 12.20
2022 14.67

We do need to be careful with the nuances within competitive balance, though; what is it that we’re actually looking for? When MLB expanded the playoffs last season to 12 teams — a full 40% of the league — that opened the door for teams to sneak into the playoffs with a win total somewhere in the mid-80s. A whole bunch of teams in the mid-80s may look like competitive balance, but do we want them to be shooting for that level of slightly-better-than-average mediocrity? For a team that finished last year under .500, sure, the mid-80s could be a fine goal, but what is pretty clear is that we don’t want to build a system that incentivizes teams taking their feet off the gas pedal once they feel they can land at that level.

It’s a little early to tell whether this is a problem; so far, it’s a bit of a mixed bag. Last offseason, of the seven teams that finished 2021 between 75 and 85 wins, the Mets, Padres, and Phillies all took aggressive approaches to improve, though most of that movement happened before the playoff structure was finalized. Even the Tigers tried, signing Javier Báez and Eduardo Rodriguez and declaring the rebuild “100% over” before going 66–96. We’ll see how the results of this offseason play out, but as of now, none of the five teams that finished 2022 in that range — the Orioles, White Sox, Giants, Red Sox, and Twins — have managed to earn themselves a projected win total of 85 or higher for 2023. This is a small snapshot of a complicated issue; the Giants, Red Sox, and Twins had some of the league’s most tumultuous offseasons. But ideally, the league should want those teams to be hungry and to put themselves back in the top third of the league in projected wins. If the expanded playoffs end up as an excuse for teams to stand pat in the middle of the pack, that may improve competitive balance on the surface, but it’s not a win for the sport at large.

Aside from keeping the middle of the pack motivated to improve, there are two other major priorities in the conversation around competitive balance: for teams at the bottom of the league to be incentivized to try to win (i.e. not tank), and for teams at the top to be unable to run away with noncompetitive division titles or championships. To take a rough look at this, we can look at how the disparity within these groups has changed throughout time. For instance, decreasing disparity at the top and bottom of the league would indicate that the overall decrease in disparity is not a result of just the middle of the pack clustering somewhere around .500, but rather more competition amongst the league’s best teams and less folding over of the league’s worst. Note: when separated, the middle third of the league will typically have a lower disparity than the top or bottom because of the characteristics of a normal distribution, so it’s less useful to compare these standard deviations to each other by group than it is to visualize the pattern over time.

In looking at the preseason projections from the last eight seasons, we can see that both the top third of the league and the bottom third have seen pronounced decreases in their standard deviations over the last four years or so, suggesting that, based on all the projection models know going into each seasons, both the top and bottom of the league are getting tighter.

When it comes to ensuring genuine competitive balance, the new schedule is a step in the right direction, and hopefully recent trends will continue, bringing more competitive regular seasons in the years to come. But it seems likely that it will take more evening of the talent distribution to return sustainably to mid-2010s levels of parity, and the league’s existing mechanisms for leveling out the talent — the competitive balance taxes and draft picks, for example — appear to be limited in their impact. With competitive balance at least top of mind, we can hope for a more equitable system in the league’s future. In the meantime, let’s hope for tight playoff races and a whole lot of meaningful summer baseball.

Chris is a data journalist and FanGraphs contributor. Prior to his career in journalism, he worked in baseball media relations for the Chicago Cubs and Boston Red Sox.

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1 year ago

I don’t really think that “competitive balance” itself is the right thing to be concerned about. Some teams are just not very smart, and there’s nothing you can really do about it.

The bigger concern is that top teams have revenue streams that are at least twice as great as those in the bottom half of the league (based on public sources, it’s about twice as great, but it the numbers don’t quite add up so ). There are things you can do around the edges, and building a winning team definitely helps, but it’s not like “every team should be the Cardinals” is an option, since it’s not possible for every team to have a winning record. And it’s not like the so-called “anti-tanking” proposals work either, since taking away revenue sharing dollars from teams that are bad would lead to them spending less rather than more. There’s really no way around it–unless you want to give small market teams even more draft picks and such, you have to find a way to get more revenue into the small markets.

I am hopeful that the implosion of Bally Sports will lead to some changes that level the economic playing field among half the league’s teams, but MLB is going to have to be smart about it because the teams with the biggest TV contracts (Dodgers, Yankees, Red Sox, Cubs, and Giants) are not really affected. So MLB is going to have to be smart about it to find a way to bring the revenue of the rest of the league (including the smallest markets, like Kansas City, Milwaukee, and Cincinnati) up closer to the bigger players rather than just bringing down the revenues of the Rangers, Angels, and Braves. But that means MLB has to find a way to grow their product, something which they have shown little interest in doing lately.

1 year ago
Reply to  sadtrombone

I think you’ve largely nailed it. The root cause here is revenue disparity, and that’s the issue they should be working on.

Other band aid measures like fiddling with the draft, compensation picks and the like are just as likely to have unintended consequences that make things worse as having any sort of measurable improvement, no matter how good the intentions.

Joe Joemember
1 year ago

I’d say revenue disparity with better understanding of how to use that revenue effectively.

1 year ago

Yeah, this is the big issue. But it’s tough to see for a few reasons. For one, there are cheap owners who don’t spend as much as they should. Probably about 20 teams in total. The ones at the bottom of the revenue scale get more attention than the ones at the top, so it’s easy to get distracted with “some teams don’t spend enough.” But having teams spend more of their revenue on players isn’t really a fix, since almost all teams will be spending more.

Another issue is the idea that if teams win, their revenue problems will be fixed. This is true to some extent; it’s helped the Cardinals punch way above their weight, and it’s helped the ticket revenues for the Padres and Brewers a little bit. But in terms of cost-effectiveness it’s a bad idea to spend money like the Padres or Mets. Not to mention, it wouldn’t work if everyone did it. It is impossible for every team in MLB to have a winning record.

All of these are distractions, but up until now, the obvious issue–the fact that the Dodgers get $240M in TV money and teams like the Brewers and Royals and Twins are getting something like $45M–has been completely off-limits. And this is sort of reasonable, because you don’t really want to leave money on the table as a league. The NYC, LA, and Chicago markets (and Red Sox) should not be giving up those deals easily. Heck, the Blue Jays and Red Sox are practically vertically integrated there.

So MLB has to find a way to make the teams with lower revenue make more money–probably from whatever comes out of Bally Sports imploding–without jeopardizing the other teams’ revenue streams.

1 year ago
Reply to  sadtrombone

The only real answer is much more revenue sharing, but the cheap owners can’t be allowed to just pocket it either. A tax structure for underspending that parallels the luxury tax?

The owners just don’t seem to have any appetite for something like this, and the players have (foolishly, in my opinion) resisted it as well. It would be a huge challenge to figure out how to make the highest value team owners whole with extensive revenue sharing.

Jim Parksmember
1 year ago
Reply to  cowdisciple

I think revenue sharing and salary floor/cap would address many of MLB’s issues. Unfortunately MLBPA will never accept a cap.