Where do the D-backs stand among low-budget teams?

The D-backs wake up on this off-day just 1¹⁄₂ games out of a wild-card spot in the National League. It’s probably safe to say that’s a lot better than most people thought we’d be on August 8th, even if the wild-card field in the National League is not far off being... the National League. It’s especially impressive that the team is on pace for the same record as last year, given the losses of Paul Goldschmidt and Patrick Corbin, as well as a payroll which is $28 million less than 2018, according to Spotrac. But how does the team’s performance compare against others of around the same financial situation? And are there any lessons we can learn from them?

I looked at cumulative team results and salaries since the beginning of 2017 - which marks the start of the Mike Hazen era in Arizona. It also helped smooth away outlying single seasons. I used the info from Spotrac for each of the three seasons, summed them up, and also worked out the team’s overall win percentage from Opening Day 2017 through the end of play last night. The chart below plots total payroll against win percentage.

You can see there is a fairly significant connection between how much you spend, and how much you win, shown by the line. [A correlation of 0.43, for the statistically-minded] If you are above the line, you are spending more than your record deserves; if you are below it, you are squeezing out more value than most. The D-backs’ dot, incidentally, comes in at $361.2 million and a win percentage of .531. It’s effectively a “double-dot”, since Arizona’s numbers are almost identical in both categories to Minnesota’s ($359.6m and .532).

One of the things we can do is project from a team’s win percentage, how much they “should” have spent over three seasons, in order to achieve that record. [The formula is 718 x W% + 57.5, should you care] We can then compare that to their actual spending and figure out if they have a surplus or a deficit. The table has all the data, in descending order of win percentage. The salary and surplus columns are color-coded. If you are in the top third of spenders and worst deficits, you are shaded red; the middle third of each category gets a yellow; and the bottom third (lowest spenders and largest surpluses) is in green.

Some interesting points crop up here. Firstly, the Astros are not a small-budget team: over the last three seasons, their average payroll has been $36 million per year more than that of the Diamondbacks. This season, they rank sixth in the majors, above the Nationals, Cardinals, Angels and Mets. That’s in sharp contrast to 2013, the final year of their tanking strategy, when they lost 111 games and were dead last in payroll, at only $35.6 million. It strikes me that tanking is not necessarily just about getting a good draft pick. It can also be about saving money, so that your team has a “war chest” of funds, which can then be used when you are back to being competitive.

We also see the benefits of being rich. Five of the six teams in win percentage, are in the top third of spenders over the same time. The exception, perhaps surprisingly, are the Cleveland Indians. who have the 4th-best win percentage, despite coming in only 16th in payroll. However, I suspect that the AL Central is perhaps the lowest-spending divisions in baseball: their highest-ranked team the Tigers, are only 14th overall. It’s a lot easier to compete when you don’t have to compete with free-spending behemoths. There’s much more of a level financial playing field there, than in the AL East or the NL West, and that can only benefit the Indians.

To confirm that suspicion, I tallied things up by division, and here are the average annual payrolls for each team in the six divisions from 2017-2019:

1. NL West - $153.5m
2. AL East - $153.3m
3. AL West - $141.1m
4. NL East - $133.2m
5. NL Central - $130.0m
6. AL Central - $121.5m

I was surprised to see the NL West just edge out what I would have expected to be the most profligate of groups, the AL East. However, the latter is anchored by the Rays, whose average payroll over the last three years has been under $70 million. In the same period, the 2019 Padres are the only NL West franchise with a salary bill not to be in nine digits.

It’ll never happen, but it would be interesting if major-league baseball, rather than structuring geographically, did so financially. Teams would compete with others of similar resources, and move up or down, depending on how much they spent. Based on these three-year totals, the Behemoth Division, for example, would currently contain the Red Sox, Yankees, Dodgers, Cubs and Giants. The D-backs would be in the second to lowest tier (the Cheapskate Division?), along with the Twins, Reds, Brewers and Padres. If we were to re-align the major leagues on this basis, but keep the individual team results the same, these would be the current standings.

Going back to the red, yellow and green chart of salary and surplus, it seems the D-backs aren’t doing too badly, especially considering their location in the “richest” division. But if we’re looking for inspiration, the chart shows some other teams who have payrolls similar to (or lower than) Arizona’s, but which have done more with their resources. The Brewers, A’s and Rays are perhaps the most obvious; perhaps the Indians as a stretch goal. Of course, we shouldn’t be trying to copy slavishly anyone else’s approach. But it might be interesting to look, for example, at from where these successful teams get their best players, and see if there’s anything the D-backs can be doing to improve in those areas.

However, any such specific investigation will have to wait for another off-day - or another writer! For the payroll related rabbit-hole down which I wandered has sucked up all my available time. :) [And a hat-tip to Paul B for his suggestion which sent me down it]