UNFAIR PLAY: HOW SMALL MARKET TEAMS ARE BEING LEFT BEHIND IN THE MLB; AN MLB PAYROLL DATA ANALYSIS

All data used in this story was gathered by me and organized in an excel spreadsheet linked in the sources.

In the 2024 World Series, Major League Baseball saw two of the highest spending teams of all time face off, in what was a lopsided match up. The Los Angeles Dodgers went head to head with the New York Yankees in a best of seven series to decide the World Series Champion. The end result was of surprise to no one, the Dodgers beat the Yankees four games to one. Maybe the only surprise was that the Yankee’s, despite their payroll, didn't put up much of a fight. While the MLB had a historic year for spending and player contracts, there was a dark cloud that loomed over the league. The fate of the Oakland Athletics, one of the most storied and historical baseball teams of all time, was left in question. Owner, John Fisher, failed to reach a deal with the city to update the A’s stadium. While the A’s are slated to move to Las Vegas in 2028, the future of the A’s remains in the air. MLB teams have begun spending more in hopes of increasing their win percentages, and in turn drawing in more fans and views. This paper will analyze MLB spending starting in 2010 up to 2024.  

In 2011 a book named “Moneyball: The Art of Winning an Unfair Game,” by Michael Lewis was published. It tells the story of the 2002 Oakland Athletics and their manager Billy Beane, and how he fielded an extremely talented team on only 41 million dollars. The A’s would top the AL East that year with 103 wins along with a 20 game win streak, the fourth longest in MLB history. The 2002 A’s were a team that made decisions based off of “sabermetrics,” a modern form of data analysis to which they attributed their success. It sold teams around the league on the idea that you don’t have to spend big to win big. But the truth of the matter is that teams can no longer solely rely on sabermetrics to be successful, and the MLB is trending away from that. 

From 2010 to 2014 the average MLB payroll has increased by 40.14%. Teams are spending more on players who are considered to be of high value. For example in the 2023 post season the Dodgers signed superstar Shohei Ohtani to a 10 year $700 million deal. Ohtani would go on to have a momentous 2024 season becoming the first player to steal 50 bases and hit 50 home runs in a single season, immediately showcasing why he is worth the big bucks. The catch? Ohtani deferred $680 million of this contract to 2034. This frees up space for the Dodgers to spend even more on adjacent talent. Ohtani will be paid $2 million a year from 2024 to 2033. Then $68 million a year until 2043. 

Of the past 14 World Series’, 12 World Series Champions have spent above league average on payroll. In 2010 the San Francisco Giants won the world series on a $97 million dollar payroll, 2.18% more than league average. In 2024 the Dodgers won the world series on $243.7 million dollar budget, 83.13% more than league average. In 2024 the league average is $38,116,765.00 larger than it was in 2010. 

(World Series Champion payroll: blue, compared to league average payroll: orange.) 

(World Series Champion Payroll over time.) 

While the World Series is the ultimate goal for all teams in the MLB it is not the only measure of success. The MLB is split up into the National and American leagues, each having three subsets of leagues within themself (East, Central and West). By looking at payroll and division titles over the last 14 years of baseball we can see that the teams that have made up the largest amount of aggregate payroll have also been the teams that most often win their division. 

(Most division titles by teams since 2014.)

These 7 teams make up about 20% of the league with 30 MLB teams in total. Meaning 26.5% of total payroll belongs to less than a quarter of the league. With the largest contributors being the Yankees (5.8%) and the Dodgers (5.62%) over the last 14 years. 

In 2024 the Dodgers had the best record in baseball going 98-64 and spent $243,699,999.00. Meanwhile in the same city the Los Angeles Angels boasted the second worst record in baseball going 63-99 spending $120,613,867.00. So what’s the difference? 

Allen Benavides is the General Manager for the Eugene Emeralds, the San Francisco High-A minor league affiliate. Benavides is a lifelong Dodgers fan and has an interesting perspective seeing as he manages for the rival team. 

“I mean, I don't, I don't see why other teams wouldn't do it as much as the Dodgers are. Like, I'd love to see the giants do it. We'd love to see big players come here. But, you know, it's up to the front offices on how they allocate their funds and how creative they get with how they pay players,” said Benavides. 

The staunch reality is that the MLB is an entertainment business, and at the end of the day it is up to the owners on how much they want to spend and where they want to spend it. The problem with the MLB is that there is nothing incentivising owners to spend. The MLB is unique to almost all other major American sports leagues in that it does not have a salary cap, but a salary tax. A tax imposed on spending once a team's payroll crosses a certain threshold. So if anything the MLB is incentivising teams to stay under that limit so they don’t get taxed. But clearly some teams care more about winning than they do about the tax, for good reason. The more a team wins the more attention they draw, more fans in the stadium and viewing in for games. Teams may even be so good that they get viewers who aren’t even fans of the two playing that night and just want to tune in, well, because their teams stinks. Nobody wants to watch their team lose 100 games in a season and miss the playoffs. Which is another point to the success of big teams. When teams reach the playoffs they are granted extra games on the season. Prices everywhere go up from ticket prices to concessions. In turn earning the team more money that they can then spend on better players. A vicious cycle that is leaving the small market teams behind, or in the case of the A’s looking for a new home. 

Erik Hughes works fan engagement for the Portland Pickles, a collegiate wood-bat team who have found success in filling their stadium when the season rolls around. 
“We try to do a lot of things on the field during games that MLB teams just can't do because of their restrictions. I feel like we try to get our fans involved in a way that is a lot different than other teams,” said Hughes. 
While it is much easier to fill a collegiate level stadium than it is an MLB one, the Major League should be taking notes. The Pickles are living proof that if you have people dedicated to getting butts in seats at the ballpark you can make it happen. Engaging with the community and listening to fans is a part of the game owners like John Fisher fail to see. 

In 2024 the Coliseum saw its lowest rates of attendance ever, excluding covid, because A’s fans decided to put on a boycott on opening day, and what seemed like the rest of the season. A display of the power, if Fisher wasn’t going to oblige Athletics fans, they would do the same to him. Until June 6th that season where The A’s decided to put on a reverse boycott and sell out the Coliseum one last time to show they were not the problem. Chants of “sell the team” could be heard all throughout the stadium and even over broadcast. Signs in the same vein lined the Coliseum walls. In the bottom of the ninth the A’s were tied with the Toronto Blue Jays 1-1, when JJ Bleday stepped to the plate. He took the first pitch he saw 370 feet to right field to walk off the night for Oakland. Bleday had signed a 1-year $745,000 contract with the A’s that year, well below the league average.  
In 2024 the Oakland A’s had a payroll of $43,225,000.00, or about $89 million below league average. The question remains, why won’t Fisher, and other owners, spend? 

While there is no definitive answer to the problem of payroll disparity in the MLB, there is an idea that has been floating around with fans for the past few years. A payroll floor that would make it so owners have to spend a minimum amount on their team and wouldn’t be able to get away with skimping on fans. In theory the floor would promote competitive balance within the league by forcing owners to spend more. But not all owners have the capital of others, so it may be up to the MLB itself to help out the smaller market teams by subsidizing payroll. 
While it may be a long shot, it would be in the MLB’s best interest to help increase the spending of small market teams in order to increase overall revenue of the league by generating more exposure for itself.

Sources: 
http://www.stevetheump.com/Payrolls.htm
https://legacy.baseballprospectus.com/compensation/index.php?team=MIA&cyear=2019