BCB Tryouts: An Introduction To Salary Efficiency

Jeff Hanisch-USA TODAY Sports

Prospective new BCB writer Matthew Hoffman debuts today with an effort to quantify the bang the Brewers and other MLB teams get for their buck.

EDITOR'S NOTE: Matt D. Hoffman is one of several recent applicants to write for BCB, and one of a handful we'll be allowing to "try out" in the coming weeks. His debut post is below; check it out and let us know what you think. - KL

The Brewers went from having the 18th highest payroll in baseball at the beginning of the 2009 season, to the 10th highest at the beginning of last year's season, their highest rank since 1999. While it's unlikely the Brewers will ever be a top five payroll spender, the Crew finally appears to be joining baseball's bidding wars and salary risks. But is this move paying off?

Each year, multiple media outlets release rankings of the most efficient spenders in baseball. This advanced statistic requires middle school math skills; a team's total payroll is divided by their total regular season wins, which equals dollars per win, or DPW. This isn't necessarily indicative of success, but it's neat and clean.

However, the Steinbrenner clan and a select number of other MLB owners elect to set fire to piles of money, while others put pennies in vise grips. Regardless of fiscal strategy, the worst team in the league usually wins about 50 games, while the best wins about 100; it seems that some games are won solely by virtue of existence.

With this in mind, let's examine two teams with very different results in 2012; the Yankees' 95 wins and the Astros' 55 wins. The Yanks' mushroom-cloud payroll stood at $197,962,289 at the season's start, giving them a DPW of $2,083,813.57. The Astros spent a measly $60,651,000, which resulted in a DPW of $1,102,745.45.

Wow, the Astros are so much more efficient than the Yankees! Their GM must be a genius! But we're forgetting that DPW doesn't account for the inherent bias that even the cheapest owners skulking around will win a few games. I don't know about you, but I decline to call any team with the worst record in baseball "efficient."

So, how do we combat this bias? If we assume that some wins in the league are unearned, we need to account for those which are earned.

Since 1988 (the year the USA Today's salary database begins), the average (mean) difference between the most and least wins in the league is, rounded to the nearest whole number, 43. To create wins earned, we subtract 43 from a team's win total.

Suddenly, the Yankees' 52 wins earned looks even more daunting than the Astros' 12. When we divide their salaries by this number, we get dollars per win earned, or DPWE.

Our conclusions are flipped. The Yankees weigh in with a DPWE of $3,806,967.10, far more efficient than the Astros' $5,054,250.

So, this is all fine and dandy, you say, but I'm reading a baseball blog, not a math journal. And I haven't heard much about the Brewers yet.

Well, let these Brewers efficiency stats quench your thirst.

Milwaukee Brewers 2012 season

DPW rank: 17

DPWE rank: 15

Total payroll rank: 10

By both measures, the Crew wasn't very efficient last season. When total payroll rank is higher than DPWE, you're going backwards, right?

Right?

Well, here's where life gets confusing. Half of last year's playoff field had higher payroll ranks than DPW ranks; these five teams were top 10 overall spenders.

The relationship between success and efficiency really comes into play. The Padres had the lowest payroll in baseball last year but pulled out 76 wins and ranked 7th in DPWE. Efficiency wise, they had a great year, and even the most critical Padres' fan would likely admit they did well with what they had.

But would even the most optimistic fan call 76 wins a successful season?

I remember some pretty terrible Brewers' seasons when 76 wins would have seemed extravagant. In today's league, however, success is measured in playoff appearances and championships.

Herein lays the great limitation of DPWE: Inefficient spending can still lead to championships. It might make life a little harder, but the New York Darth Vaders earned the hatred of millions of baseball fans employing this strategy to great effect in the late 1990s.

The good news for teams who aren't willing to douse dollars with lighter fluid? Those teams with higher payroll ranks than DPWE ranks were all in the bottom half for total regular season wins among playoff teams.

The five playoff teams with the most regular season wins all had higher DPWE ranks than payroll ranks; all finished in the top six for DPWE. It seems that, in 2012, the most consistent teams in the league were also very efficient with their payroll. Unfortunately, the Brewers were not among them.

In my next post, we'll examine the Brewers' historical efficiency and its relationship to total payroll and winning.

The following chart ranks teams by dpwE, and provides dpw ranks in parentheses. Payroll ranks are denoted with the letter p, and total win ranks with the letter w. Playoff teams are starred. You'll also notice that dpwE rewards playoff teams better than dpw.

*1. (1) Oakland As 29p, 4w $1,085,735.29

2. (2) Tampa Bay Rays 25p, 9w $1,365, 393.62

*3. (4) Washington Nationals 20p, 1w $1,478,838.96

*4. (6) Cincinnati Reds 17p, 2w $1,522,289.19

*5. (7) Baltimore Os 19p, 8w $1,628,579.98

*6. (8) Atlanta Braves 16p, 6w $1,633,528.27

7. (3) San Diego Padres 30p, 19w $1,674,081.82

8. (4) Pittsburgh Pirates 26p, 18w $1,761,999.97

9. (10) Arizona Diamondbacks 24p, 17w $1,954,864.03

10. (5) Kansas City Royals 27p, 23w $2,100,559.48

11. (14) Los Angeles Dodgers 12p, 13w $2,212,641.28

*12. (19) San Francisco Giants 8p, 5w $2,306,287.90

13. (15) Chicago White Sox 11p, 14w $2,307,607.14

*14. (22) Texas Rangers 6p, 7w $2,410,219.48

15. (17) Milwaukee Brewers 10p, 15w $2,441,348.60

*16. (20) St. Louis Cardinals 9p, 12w $2,451,130.27

17. (11) Toronto Blue Jays 23p, 22w $2,516,306.67

18. (12) Seattle Mariners 18p, 20w $2,561,815.63

*19. (25) Detroit Tigers 5p, 11w $2,940,000.00

20. (21) New York Mets 14p, 21w $3,011,418.81

21. (16) Cleveland Indians 21p, 26w $3,137,212.00

22. (27) Anaheim Angels 4p, 10w $3,358,373.17

23. (18) Colorado Rockies 22p, 28w $3,717,598.62

*24. (28) New York Yankees 1p, 3w $3,806,967.10

25. (23) Minnesota Twins 13p, 27w $4,090,652.17

26. (26) Miami Marlins 7p, 25w $4,541,461.54

27. (29) Philadelphia Phillies 2p, 16w $4,593,129.95

28. (24) Chicago Cubs 15p, 29w $4,899,835.17

29. (13) Houston Astros 28p, 30w $5,054,250.00

30. (30) Boston Red Sox 3p, 24w $6,661,023.73

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