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Does spending more money help teams win?

Well, does it? Answer: yes, but probably not as much as you'd think.

Mark Wilson/Getty Images

On the basic level, the Diamondbacks got more bang for their buck than most other teams in the major-leagues last season. The total Opening Day payroll for the 30 major-league franchises in 2015 came out to $3.74 billion, which means that each win cost $1.54 million. Unsurprisingly, the teams which paid most were those at the top of the salary charts, in the Los Angeles Dodgers ($2.96 million) and New York Yankees ($2.52 million). The bottom of the list saw four teams pay less than one million per win, with the lowest cost belonging to the Houston Astros, at $824,325, or less than one-third of the rate at which the Dodgers bought their wins.

Arizona's rate was solidly below average, at $1.16 million. That was easily the lowest in the National League West, and compares well with the Padres ($1.36 million), Rockies ($1.50 million) and Giants ($2.06 million), as well, obviously, to the Dodgers. Now, there are other factors at play here, and you could look at the data in a variety of ways, such as figuring out the cost over a replacement team, and comparing it to the wins above replacement achieved. For it's also true that it's a lot easier to buy the first win, or even the sixtieth, than the 100th. But it's interesting to note that, even by the bald "dollars per win" metric, seven of the ten playoff teams are below average.

However, I thought it might be interesting to look at things a different way, comparing how much teams spent this year to last, and how that change looks when compared against the results. For this, I've used these opening day payrolls for 2014 and 2015, simply because that was the first source to come up in a Google search which had both years. I've figured out the salary change for each team from 2014 to 2015, and adjusted that by the overall increase in total payroll across MLB, which works out at an 8.3% increase. So, even though the Yankees increased their gross payroll from $204 to $219 million, that actually works out as a fractional downturn, once the 8.3% "inflation" is considered.

Here's the chart, with the playoff teams this season in yellow.

Team 2014 Payroll 2015 Payroll 2014 W% 2015 W% Salary Wins Cost per W
Arizona Diamondbacks $112,688,666 $91,518,833 .395 .488 74.98 123.54 $1,157,646
Atlanta Braves $110,897,341 $97,578,565 .488 .414 81.23 84.84 $1,454,920
Baltimore Orioles $107,406,623 $110,146,097 .593 .500 94.68 84.32 $1,359,828
Boston Red Sox $162,817,411 $187,407,202 .438 .481 106.27 109.82 $2,405,061
Chicago Cubs $89,007,857 $119,006,885 .451 .599 123.44 132.82 $1,226,395
Chicago White Sox $91,159,254 $115,238,678 .451 .469 116.71 103.99 $1,516,737
Cincinnati Reds $112,390,772 $117,197,072 .469 .395 96.27 84.22 $1,831,490
Cleveland Indians $82,534,800 $86,091,175 .525 .503 96.30 95.81 $1,056,515
Colorado Rockies $95,832,071 $102,006,130 .407 .420 98.27 103.19 $1,499,208
Detroit Tigers $162,228,527 $173,813,750 .556 .460 98.91 82.73 $2,332,444
Houston Astros $44,544,174 $70,910,100 .432 .531 146.97 122.92 $824,325
Kansas City Royals $92,034,345 $113,618,650 .549 .586 113.97 106.74 $1,196,842
Los Angeles Angels $155,692,000 $150,933,083 .605 .525 89.50 86.78 $1,774,639
Los Angeles Dodgers $235,295,219 $272,789,040 .580 .568 107.03 97.93 $2,964,583
Miami Marlins $47,565,400 $68,479,000 .475 .438 132.91 92.21 $965,091
Milwaukee Brewers $103,844,806 $105,002,536 .506 .420 93.35 83.00 $1,543,247
Minnesota Twins $85,776,500 $108,945,000 .432 .512 117.26 118.52 $1,313,477
New York Mets $89,051,758 $101,409,244 .488 .556 105.13 113.93 $1,125,869
New York Yankees $203,812,506 $219,282,196 .518 .537 99.33 103.67 $2,520,659
Oakland A's $83,401,400 $86,086,667 .543 .420 95.29 77.35 $1,265,236
Philadelphia Phillies $180,052,723 $135,827,500 .451 .389 69.65 86.25 $2,155,376
Pittsburgh Pirates $78,111,667 $88,278,500 .543 .605 104.34 111.42 $900,709
San Diego Padres $90,094,196 $100,675,896 .475 .457 103.17 96.21 $1,359,860
San Francisco Giants $154,185,878 $172,672,111 .543 .518 103.39 95.40 $2,057,678
Seattle Mariners $92,081,943 $119,798,060 .537 .469 120.11 87.34 $1,576,747
St Louis Cardinals $111,020,360 $120,869,458 .556 .617 100.51 110.97 $1,209,251
Tampa Bay Rays $77,062,891 $76,061,707 .475 .494 91.12 104.00 $950,439
Texas Rangers $136,036,172 $142,140,873 .414 .543 96.46 131.16 $1,615,862
Toronto Blue Jays $132,628,700 $122,506,600 .512 .574 85.28 112.11 $1,317,445
Washington Nationals $134,704,437 $164,920,505 .593 .512 113.03 86.34 $1,988,336
Total/Average $3,453,960,397 $3,741,211,113


Or, for those who prefer a more graphical interpretation, this plots salary along the bottom against wins going vertically:

In effect, you can divide the above chart into four quarters.If you're in the left-hand half, you have spent less money than in 2014 (allowing for inflation); if you're on the right, you've spent more. Similarly, the top half is teams that won more games than in 2014, and the bottom half is teams that were less successful. So, ideally, you want to be in the top-left hand quadrant, where you spend less money, and win more games. The line indicates the basic trend, and shows that, yes, teams which spent more than last season do tend to see that reflected in increased success. However, not that much: a 10% increase in salary led to about 3% more win-percentage, which for a .500 team is 2.5 extra wins or so.

That, however, conceals some startlingly large variations. The Diamondbacks demonstrate the most efficiency year on year: their payroll dropped by over 25%, inflation adjusted, but they still improved their winning percentage by almost as much. Obviously, that comes with the huge caveat that they were the worst team in the league last season, and virtually the only way to go from there was up. Against that, the only team to slash costs by a bigger percentage were the Phillies, and let's just say, the results were a bit painful. Certainly, most of the teams to reduce payroll did not get much better, with just three of 15 (us, the Rangers and Blue Jays) improving the W% by more than 5%.

At the other end of the spectrum, we find the Astros, who opened their wallets to the tune of a 47% increase. Again, of course, this was coming from a low-water mark of the lowest payroll. But it's interesting to compare and contrast the results with those of the Marlins. Both last year and this, the two sides' budgets were within about $3 million of each other. though they did swap places at the bottom of the salary standings in 2015. However, while Houston improved by 16 games, Miami won six games less than in 2014. It's no surprise that the teams most in the bottom right (Miami, Seattle and Washington) have all fired either their managers or GMs this year.

In the Diamondbacks' case, there is a significant sense that one of the main activities over the last season and a half was getting out from underneath some of the bad deals inherited by Tony La Russa and Dave Stewart from the previous administration, while also trading away players that were becoming expensive, and for whom we had younger, cheaper alternatives. Those gone from the 2014 Opening Day roster include Trevor Cahill, Miguel Montero, Wade Miley, Martin Prado and Gerardo Parra, and you'd be hard pushed to say many of them proved to be particularly irreplaceable.

While improving by these 15 wins was a good start, certainly., it's worth bearing in mind that another 15 wins still are likely necessary for the team to meet their goal of playoff baseball in 2016. And getting out of the basement and coming back towards .500 is the easy past.  It's like climbing Mt Everest: going from sea-level to 15,000 feet may technically out you at half-way, but what lies in front is significantly tougher than what is behind you. As the above shows, spending more money is not, by itself enough: you need to make wise investments and likely also hope for good luck, with regard to things like health.

This winter will be a much sterner test of Stewart and La Russa's abilities, for getting rid of bad contracts is one thing - replacing them with good ones, quite another.