Competitive Analytics | Baseball Economics - Competitive Analytics

Baseball Economics

August 25, 2009

Moneyball is widely known. Yet there are many new metrics you can unearth by digging down deep into the data. We “deciphered” two metrics that evaluate each MLB team’s “Annual Change in Payroll Per Win” and “Fan ROI.”

Next month we begin our installments of City Rankings with preliminary 2010 forecasts.  However, for week 12 let’s have some fun and rank all 30 Major League Baseball teams by “Economic Win Efficiency” as well as “Best Fan Value.”  We hope you sports fans enjoy these intriguing numbers which revealed several unexpected findings!  To subscribe to 60 Second Insight, click here.

Vince Lombardi once said: “If winning isn’t everything, why do they keep score?”  And as everyone knows, Major League Baseball is BIG business and owners and general mangers shouldn’t just be counting wins and losses.  So for week 12 we decided to score each baseball team’s Win On Investmentfrom two perspectives:

A. Team ROI – Each team’s “annual return” is simply how often they win.  This makes perfect sense.  And each team’s “annual investment” is simply how much they spend on payroll.  Thus, we developed a new metric that measures and ranks which teams make the best use of their money…and of course, which teams do not.  And this was accomplished by creating a new performance benchmark called ACPW orAnnual Change in Payroll per Win.  Is this acronym obscure enough?  Anyway, we realize there are additional criteria to account for (television revenue, playoff wins, etc.) but hang in there for a moment longer…the results may shock you.

B. Fan ROI – Each fan’s average return is calculated by considering average ticket price, the probability of experiencing a home win, and the expected cost of each fan experiencing each win.

Team ROI

#1. The Seattle Mariners decreased payroll by $18 million AND forecasted to improve their win total by 21 games!  Nintendo (owner of the Mariners) is seemingly running the tightest ship in baseball.

#2. The Detroit Tigers decreased payroll by $23 million AND forecasted to improve their win total by 12 games!  Mike Ilitch (owner of the Tigers, Red Wings, and Little Caesars Pizza) should be pleased.

#3. The San Diego Padres have been somewhat of a laughing stock due to their uncompetitive history.  However, the Padres are expected to rank as the third most economically efficient baseball team in 2009.  The Padres decreased payroll by $30 million AND forecasted to improve their win total by 4 games! Talk about doing more with less!

#4. The New York Mets are the least efficient team in the world of baseball economics.  The Metropolitans increased payroll by 11.5 million and are expected to lose 15 more games this year.  The bottom line: The Mets are paying almost $500,000 more for every win during 2009.  Well…as a life long Mets fan, all I can say is…just wait ’till next year!

TABLE A: Team ROI
2009 Annual Change in Payroll Per Win

 R  MLB Team ACPW   2008 Payroll  2009 Payroll 08W  09Wf  AWC  08 PPW   09 PPWf  ATP  EFI  BFV
                         
01 Seattle Mariners ($722,810) $117,666,482 $98,904,166 61 82 21 $1,928,959 $1,206,148 $25.53 $50.44 ($24.91)
02 Detroit Tigers ($522,411) $137,685,196 $115,085,145 74 86 12 $1,860,611 $1,338,199 $27.38 $51.58 ($24.20)
03 San Diego Padres ($516,737) $73,677,616 $43,734,200 63 67 4 $1,169,486 $652,749 $20.01 $48.38 ($28.37)
04 New York Yankees ($374,239) $209,081,577 $201,449,189 89 102 13 $2,349,231 $1,974,992 $72.97 $115.89 ($42.92)
05 Los Angeles Dodgers ($365,783) $118,588,536 $100,414,592 84 96 12 $1,411,768 $1,045,985 $29.66 $50.05 ($20.39)
06 St. Louis Cardinals ($323,960) $99,624,449 $77,605,109 86 93 7 $1,158,424 $834,464 $29.43 $51.27 ($21.84)
07 Atlanta Braves ($297,023) $102,365,683 $96,726,166 72 86 14 $1,421,746 $1,124,723 $17.05 $32.12 ($15.07)
08 Chicago White Sox ($190,111) $121,189,332 $96,068,500 89 82 -7 $1,361,678 $1,171,567 $32.28 $63.77 ($31.49)
09 San Francisco Giants ($124,989) $76,594,500 $82,616,450 72 88 16 $1,063,813 $938,823 $23.28 $42.86 ($19.58)
10 Texas Rangers ($107,900) $67,712,326 $68,178,798 79 91 12 $857,118 $749,218 $19.41 $34.55 ($15.14)
11 Colorado Rockies ($101,392) $68,655,500 $75,201,000 74 91 17 $927,777 $826,385 $19.50 $34.71 ($15.21)
12 Boston Red Sox ($80,780) $133,390,035 $121,745,999 95 92 -3 $1,404,106 $1,323,326 $50.24 $88.47 ($38.23)
13 Toronto Blue Jays ($77,424) $97,793,900 $80,538,300 86 76 -10 $1,137,138 $1,059,714 $19.10 $40.71 ($21.61)
14 Los Angeles Angels ($31,867) $119,216,333 $113,709,000 100 98 -2 $1,192,163 $1,160,296 $20.05 $33.14 ($13.09)
15 Pittsburgh Pirates ($10,640) $48,689,783 $48,693,000 67 68 1 $726,713 $716,074 $15.39 $36.66 ($21.27)
16 Baltimore Orioles $13,337 $67,196,246 $67,101,666 68 67 -1 $988,180 $1,001,517 $23.42 $56.63 ($33.21)
17 Cincinnati Reds $80,152 $74,117,695 $73,558,500 74 68 -6 $1,001,590 $1,081,743 $19.19 $45.72 ($26.53)
18 Philadelphia Phillies $108,975 $98,269,880 $113,004,046 92 96 4 $1,068,151 $1,177,125 $31.10 $52.48 ($21.38)
19 Milwaukee Brewers $115,663 $80,937,499 $80,182,502 90 79 -11 $899,306 $1,014,968 $20.98 $43.02 ($22.04)
20 Washington Nationals $126,844 $54,961,000 $60,328,000 59 57 -2 $931,542 $1,058,386 $30.63 $87.05 ($56.42)
21 Minnesota Twins $169,278 $56,932,766 $65,299,266 88 80 -8 $646,963 $816,241 $21.70 $43.94 ($22.24)
22 Florida Marlins $173,680 $21,811,500 $36,834,000 84 85 1 $259,661 $433,341 $19.06 $36.33 ($17.27)
23 Cleveland Indians $174,063 $78,970,066 $81,579,166 81 71 -10 $974,939 $1,149,002 $22.12 $50.47 ($28.35)
24 Oakland Athletics $225,855 $47,967,126 $62,310,000 75 72 -3 $639,562 $865,417 $24.31 $54.70 ($30.39)
25 Arizona Diamondbacks $228,096 $66,202,712 $73,516,666 82 71 -11 $807,350 $1,035,446 $14.31 $32.65 ($18.34)
26 Houston Astros $253,381 $88,930,414 $102,996,414 86 80 -6 $1,034,075 $1,287,455 $28.73 $58.18 ($29.45)
27 Tampa Bay Rays $267,708 $43,820,597 $63,313,034 97 88 -9 $451,759 $719,466 $18.35 $33.78 ($15.43)
28 Kansas City Royals $362,595 $58,245,500 $70,519,333 75 62 -13 $776,607 $1,139,201 $19.38 $50.72 ($31.34)
29 Chicago Cubs $423,952 $118,345,833 $134,809,000 97 82 -15 $1,220,060 $1,644,012 $47.75 $94.34 ($46.59)
30 New York Mets $470,327 $137,793,376 $149,373,987 89 74 -15 $1,548,240 $2,018,567 $36.99 $80.98 ($43.99)

 

Fan ROI

• The Los Angeles Angels of Anaheim have the highest fan value in all of baseball!  The halos expected fan investment is only $33.14 for experiencing each home win; which is only $13.09 more than an Angel fan’s average ticket price of $20.05.

• The Washington Nationals (of D.C.) have the lowest fan value in baseball.  There are so many punch-lines for this fact that I will let your political imagination fill in the blanks.  The Nats expected fan investment is an expensive $87.05 for experiencing each home win; which is $56.42 more than a fan’s average ticket price of $30.63..

•  Both the New York Yankees and New York Mets rank near the bottom in Expected Fan Value.  However, baseball in New York is practically a religious birthright…so no matter what happens, fans of the Mets and Yankees will remain loyal…until ticket prices go north of $100 per game!

TABLE B: Fan ROI
2009 Average Ticket Price LESS EFI “Expected Fan Investment” for Experiencing Home Win

 R  MLB Team ACPW 
1 Los Angeles Angels ($13.09)
2 Atlanta Braves ($15.07)
3 Texas Rangers ($15.14)
4 Colorado Rockies ($15.21)
5 Tampa Bay Rays ($15.43)
6 Florida Marlins ($17.27)
7 Arizona Diamondbacks ($18.34)
8 San Francisco Giants ($19.58)
9 Los Angeles Dodgers ($20.39)
10 Pittsburgh Pirates ($21.27)
11 Philadelphia Phillies ($21.38)
12 Toronto Blue Jays ($21.61)
13 St. Louis Cardinals ($21.84)
14 Milwaukee Brewers ($22.04)
15 Minnesota Twins ($22.24)
16 Detroit Tigers ($24.20)
17 Seattle Mariners ($24.91)
18 Cincinnati Reds ($26.53)
19 Cleveland Indians ($28.35)
20 San Diego Padres ($28.37)
21 Houston Astros ($29.45)
22 Oakland Athletics ($30.39)
23 Kansas City Royals ($31.34)
24 Chicago White Sox ($31.49)
25 Baltimore Orioles ($33.21)
26 Boston Red Sox ($38.23)
27 New York Yankees ($42.92)
28 New York Mets ($43.99)
29 Chicago Cubs ($46.59)
30 Washington Nationals ($56.42)