Does it matter that the Yankees keep buying pennants?
As most baseball fans are aware, the New York Yankees have been spending more money on payroll than any other team in the major leagues, by a long shot. In 2009, for instance, the Yanks spent $201 million, about two-and-a-half times the average, and $76 million more than the next highest team (the Mets).
And so, as you would expect, the lavish-spending Yankees have been very successful. The Yankees made the post-season every year but one since 1995. That's 14 out of 15.
In an excellent post in November, Joe Posnanski wondered why fans are willing to put up with this. He gave two reasons:
1. In baseball, unlike football and basketball, a truly dominant team still wins only about 60% of its games. This tends to hide the extent of the dominance:
"I would bet if the Indianapolis Colts played the Cleveland Browns 100 times, and the Colts were motivated, they would probably 95 of them — maybe even more than that. But if the New York Yankees played the Kansas City Royals 100 times, and the Yankees were motivated, I suspect the Royals would still win 25 or 30 times. That’s baseball.
"So you have this sport that tends to equalize teams. That helps blur the dominance of the Yankees. If the New England Patriots were allowed to spend $50 million more on players than any other team, they would go 15-1 or 16-0 every single year. And people would not stand for it. But in baseball, a great and dominant team might only win 95 out of 160, and it doesn’t seem so bad."
And, given that the Yankees should only be expected to win 97 games or so, there will likely be other teams that come close to them, so it winds up looking like the Yankees are one of many quality teams. Of course (and now this is me, not Posnanski), the Yankees are expected to do it every year, whereas whatever team challenges them is probably just a random team that got lucky. But you can't tell that just by watching, so that Yankees don't look all that special in any given season.
2. Under the new, post-1995 playoff system, a team has to win three rounds to win the World Series. But in a short series, anything can happen, and the better team will lose with pretty high frequency.
A team with a 60% chance of winning each game will only win a best-of-five series about 68 percent of the time, and a best-of-seven series 71 percent of the time. (If I've got the numbers right.) So the chance of winning three consecutive rounds, and the World Series, is .68 * .71 * .71, which is about 34 percent.
So even if the Yankees are 60% favorites every game of the post-season -- the equivalent of 97-65 against three of the best other teams in baseball -- they'll win the World Series only about one year out of three. Posnanski:
"And in that way the expanded playoffs have been genius for baseball — not only because they are milking television for every dime but because the short series have been baseball’s one Yankee-proofing defense against the ludicrous unfairness of the New York Yankees. ... They are the best team with the best players every year — that sort of big money virtually guarantees it.
"So, you create a system where the best team doesn’t always win. In fact, you create a system where the best team often doesn’t win. For years the Yankees didn’t win. They lost to Florida. They lost Anaheim. They blew a 3-0 series lead against Boston. They lost to Anaheim again and Detroit and Cleveland — and how could you say that baseball is unfair? Look, the Yankees can’t win the World Series! See? Sure they spend $50 million more than any other team and $100 million more than most. But they haven’t won the World Series! Doesn’t that make you feel better?"
Last week, at the Sports Economist blog, Brian Goff agreed and disagreed with Posnanski's analysis. His agreement was that Posnanski got it right in terms of understanding why MLB did what it did with the expanded playoffs. His disagreement was that, while Posnanski thinks it's a bad thing for the fans, Goff thinks it's a *good* thing.
Why? Because Yankee-haters get a lot of satisfaction out of seeing the Yankees lose. And so MLB's strategy is win-win. Yankee fans get to see their team in contention every year, which creates a lot more revenue for the league and utility for fans (since the Yankees have the largest fan base in MLB). And then, Yankee-haters get to see their least-favorite team defeated two years out of three, which makes *them* feel good and open their wallets. MLB deliberately designed the system this way to squeeze more money out of its fans.
That may be true, but I'm not so sure the strategy is still in baseball's long-term interest. The sports economists I've read note that fans spend more money when their team is successful, and, from that, they conclude that it maximizes profit for the league to ensure the cities with the most fans win the most often.
I'm not convinced. That may work in the short run, when the fans still have memories of when payrolls were more even, and playoff berths were earned more by other means than money. But what happens longer term, when the Yankees make the playoffs for 28 of the next 30 years, and it becomes more and more obvious that the Pirates and Royals will seldom (if ever) be able to compete? And what happens when even Yankees fans start to get uncomfortable noticing that there's a lot less to be proud of when your management is just buying all the best players, and a playoff berth is just being purchased every year?
Maybe it's just me, that it's my personal taste that I'd rather all teams have an equal payroll, and that success on the field be "bought" with intelligence, strategy, and luck, rather than money. I've been a fan of the Toronto Maple Leafs all my life, but if the Leafs finally won the Stanley Cup again, but by spending three times as much as any other team ... well, I don't think I'd really care that much. And I'm sure there are many more like me. And so I wonder if a "we make more money when we rig the system so the Yankees win more often" strategy might backfire.
If you asked me a few months ago, I'd say for sure it would backfire, and fans would never put up with years and years of the Yankees buying pennants. But, after reading "Soccernomics," I'm not so sure. What I learned (pp. 48-49) was that, in the English Premier and Championship Leagues, there is a huge tendency to purchase wins. From 1998 to 2007, Manchester United had three times the average team payroll, and finished second, on average. That's second out of 58 teams, not second out of five teams in the AL East. Moreover, that's not second one year and then tenth the next -- it's an *average* of second, over ten years. They finished first five times, second twice, and third three times.
And they weren't even the highest-spending club ... that was Chelsea, who spent 3.5 times as much as the league mean, and had finished third on average.
The flip side of Man U is a club called "Brighton & Hove Albion," which spent 1/7 the average payroll (and finished 42nd, on average). So, in English soccer, you have the biggest team spending 23 times as much as the smallest team. Compare that to MLB, where the ratio was only 6 times for 2009, and is probably a lot smaller than that when you average out 10 seasons.
Moreover: in baseball, the Yankees stand alone in payroll: last year, they spent almost 50% more than the second-highest paid Mets. In English soccer, there were four teams at double the average (compared to one in MLB), and 13 teams at less than a quarter of the average (compared to none in MLB). And, again, these are ten-year trends in soccer, compared to a single year in baseball, which makes then even more shocking.
(One disclaimer: the soccer teams are, technically, divided into two leagues: the (first-tier) Premier League, and the (second-tier) Championship League. You'd expect that teams in the lower league would pay less. However, every season, as I understand it, the three best teams in the second tier swap places with the three worst teams in the first tier. So, theoretically, even the lowest paid second-tier team has a hope of being the overall champion two years from now. In that sense, it's really one league.)
But, despite the payroll and standings disparities, Man Utd still has a rabid fan base, and, as a result, the club is valued at $1.87 billion, even more than Forbes' appraisal of the Yankees at $1.5 billion.
So, what I'm thinking is: if British soccer fans can tolerate huge pay differences, and accept the fact that it's almost always going to be one of the richest teams that win ... well, maybe baseball fans can accept that too, especially since it's on a much smaller scale. Maybe the New York Yankees can become baseball's Manchester United, the Red Sox can become Chelsea, and fans of the Marlins and Padres can hope to fluke into the postseason and engineer an upset.
Major League Baseball might very well lose me as a fan if they do that, but if they can make it up in revenues from everyone else, who am I to say they're wrong?