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High salary costs in baseball don’t always mean a home run team

Oakland Athletics reliever Sean Doolittle throws against the Seattle Mariners in the ninth inning of a baseball game on Sunday, July 13, 2014, in Seattle. The Athletics are “off the charts” with the best record in baseball and yet they have a payroll that is in the lowest quintile of the league.


Money doesn't necessarily buy success, at least not in Major League Baseball, according to a BMO Private Bank study.

At the mid-season point, the bank's chief investment officer Jack Ablin studied the stats and club payrolls for teams in both the American and National leagues.

Contending that baseball is the closest thing to a free market in sports, given the absence of salary caps or league parity, Mr. Ablin says it stands to reason that the big-market teams – hello New York Yankees! – should win the most games because they can afford the most talented players.

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He found that 2014 is a year of changes to that pattern, "with some of the lower payroll teams holding higher winning percentages, and vice versa."

In the American League, the Oakland Athletics are "off the charts" with the best record in baseball, and yet they have a payroll that is in the lowest quintile of the league, $83.4-million (U.S.), said Mr. Ablin.

Meanwhile, the Boston Red Sox – a team boasting one of the highest payrolls at $163-million – are batting a collective .194 in their past 7 games, with only two home runs, he points out.

In the National League, the "beer budget" Milwaukee Brewers-- $104-million -- have "posted their best 81-game record in franchise history."

Meanwhile, the Los Angeles Dodgers – at $235.3-million, baseball's biggest payroll, beating out the New York Yankees – trail the Brewers, Mr. Ablin said.

The Atlanta Braves have only a $110-million payroll but are at the top of the National League East, he said in his Moneyball All-Star Break report.

In stark contrast, the Philadelphia Phillies are at the bottom of the NL East on a $180-million payroll while "delivering performance equal to teams spending $100-million less," says Mr. Ablin.

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The Arizona Diamondbacks have the worst record in the league despite their $112-million payroll outlay that puts them in the top third among payouts, he calculates.

Of course, there are instances where payrolls and performance line up. The Detroit Tigers are putting in a solid mid-season showing, on a $162.2-million payroll. The San Francisco Giants are a winning franchise but their payroll is $154.1-million.

Then there are the teams just trying to cope with bad luck: the injury-plagued Tampa Bay Rays and Texas Rangers, said Mr. Ablin.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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