Mad Money: Good for Wins and Baseball?

As of today, the Los Angeles Dodgers have the largest payroll in Major League Baseball. The Dodgers made the move to the top of the list overtaking the New York Yankees prior to the 2014 season. The real change in front office spending policy, however, began prior to and during the 2012 season.

That year Mark Walter, Ervin “Magic” Johnson, and Guggenheim Partners purchased the Dodgers franchise, traded for first baseman Adrian Gonzalez, and took on significant salary from the Boston Red Sox in order to finalize the deal.

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From 2011 to 2016, the Dodgers payroll has gone from $118,668,615 to $259,169,496 USD. The Dodgers have more than doubled their payroll in less than six years. Dodger players, except Zack Greinke, and fans should be ecstatic for the money spent. It is mad money though. More money never guarantees much and the figures the Dodgers are spending might as well be Monopoly Money to most Americans.

[graphiq id=”jD9z05BV5Qh” title=”Los Angeles Dodgers 2016 Payroll Obligations” width=”600″ height=”463″ url=”https://w.graphiq.com/w/jD9z05BV5Qh” link=”http://mlb-teams.pointafter.com/l/28/Los-Angeles-Dodgers” link_text=”Los Angeles Dodgers 2016 Payroll Obligations | PointAfter” ]

Unfortunately, baseball and life are sometimes not that simple.

First, we want to know whether the Dodgers Organization financial investment into talent has led to more wins and championships.

Second, we want to know whether a focus on spending money has taken away from the personality of the game and those who play it.

On the one hand, for the first time in their illustrious history, the Dodgers have won three straight National League West Division Titles. Also, despite multiple injuries, the team is currently two games back of the San Francisco Giants.

On the other hand, the Dodgers have not made or won a World Series since 1988.

At this point, fans are looking for a curse to blame the drought on, while goats and Babe’s are taken.

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To help us with the first task, an attorney colleague put together this great Team Payrolls and Wins Excel Spreadsheet. From 2011-2015, and specifically after the Frank McCourt era of ownership that ended in 2012, the Dodgers have the third most wins in MLB behind the St. Louis Cardinals and the Detroit Tigers. The New York Yankees have one less win than the Dodgers during the same period.

The Dodgers rank sixth (6th) in playoff wins during the same period with eight (8), but trailed double-digit playoff win teams: The St. Louis Cardinals (32), San Francisco Giants (23), Kansas City Royals (22), Detroit Tigers (17), Texas Rangers (12), and the Boston Red Sox (11).

Unsurprisingly, each of these teams have won or played in a World Series during the same period. Simply, more wins increases a team’s chance for championships.

From 2011-2015, the Dodgers have spent $2,273,713.06 per regular season win, on average. The Dodgers spent 62% more than every other team in the League. The New York Yankees lead the League with $2,498,137.26 per win, on average, while spending 78% more than every other team in the League.

However, by the Dodgers passing on Zack Greinke, David Price, Johnny Cueto and many other free agents after the 2015 season, the team has gone from spending 95% more than any other team for a win to 63% in 2016.

As promised by Dodgers President of Baseball Operations, the massive spending would end as the farm system continued to build strength and depth.

[graphiq id=”5nxunIChuiV” title=”Los Angeles Dodgers 2016 Payroll by Position Group” width=”600″ height=”494″ url=”https://w.graphiq.com/w/5nxunIChuiV” link=”https://www.graphiq.com/wlp/5nxunIChuiV” link_text=”Los Angeles Dodgers 2016 Payroll by Position Group | PointAfter” ]

Interesting, the Dodgers have led the League this year in players spending time on the disabled list.

By the way, starting pitcher Bud Norris was injured Sunday after throwing 13 pitches as Bill Shaikin of the Los Angeles Times reported,

“The Dodgers have used 12 starters already this season. They used [all of] 16 last season, the most in the majors.”

Do you think the Dodgers depth built by Andrew Friedman and company has helped the team much this year? We suppose you could make the argument that if Friedman signed more top-tier free agents so many players would not be spending time on the disabled list as opposed to the field. That would be an unfair argument, however, considering injury is not directly correlated to money spent. Injuries can be freak and can change an at bat, a game, a season, and even a career.

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Not all is lost for the Dodgers and other high-spending teams. When we break the numbers down by playoff wins, the Dodgers are in the middle of the pack at $129,033,216 per team playoff win, on average. This number is lower for the Dodgers and similar playoff contending teams because (1) the game sample size is smaller, and (2) the more playoff games you play in the larger your team payroll can be divided.

In looking at teams at the bottom and top of the Team Payrolls and Wins Excel Spreadsheet, we can see there is a correlation between not spending enough and spending too much money on talent, while not making the playoffs often or at all raises and lowers the overall spending figure for team playoff wins.

For example, the Miami Marlins, Cleveland Indians, San Diego Padres, Colorado Rockies, Seattle Mariners, Minnesota Twins, Chicago White Sox, and the Los Angeles Angels of Anaheim have not made the playoffs during 2011-2015, so they have spent $0.00 on playoff wins.

In comparison, the Cardinals have won 32 playoff games during the same period, so with the combination of a lower team payroll and more team playoff wins, their $19,392,850 per playoff win pales in comparison to the Dodgers at $129+ million per playoff win.

The Washington Nationals, Arizona Diamondbacks, New York Yankees, Cincinnati Reds, and the Philadelphia Phillies all broke the $200 million mark per playoff win with the Phillies coming in second place at $417,825,274. Then there is the Atlanta Braves, who spent $530,025,246 per playoff win based on their low playoff win total (1) with a $100+ million payroll.

[graphiq id=”2IwJcOMqTMV” title=”What did it cost to make the MLB playoffs?” width=”520″ height=”951″ url=”https://w.graphiq.com/w/2IwJcOMqTMV” link=”https://www.graphiq.com/wlp/2IwJcOMqTMV” link_text=”What did it cost to make the MLB playoffs? | PointAfter” ]

At the end of this season and into 2018, via Cot’s Baseball Contracts, when most of the Dodgers current contracts come off the books (assuming no new free agents are signed or players acquired, which is unlikely), it will be another test of Andrew Friedman’s vision and leadership with money and talent as he looks to continue to build the club from within. Until that time, the Dodgers, to some, will be the team that has spent a lot of money of for no World Series ring(s).

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It is not lost upon the author that as this article is being written we are utilizing financial figures and Excel Worksheets to analyze team value in terms of wins, while at the same time calling attention to the very thing that has altered the game and players we love.

This brings us to our second question.

Are players commodities to be acquired, or rather, are they being treated that way by the Dodgers Front Office and other clubs?

One initial response might be that athletes are paid too much money for us or anyone to care about their feelings. A second, and more reasoned answer, however, would be to realize something that we often forget: money does not make the man, and athletes are human too, with feelings, and all that good stuff.

First, we have no factual basis in modern times, with the strength of the Players Union that players have complained about treatment by their employers. Players understand baseball is a business with a bottom line to win more games.

We have been in labor peace for some time now and the new 2017 collectively bargained agreement should bring more of the same peace and prosperity. With that peace and prosperity, players will continue to see their salaries increase and therefore team payrolls. Our first $500 million dollar player may be hitting the market in 2018. Miami Marlins outfielder Giancarlo Stanton is already worth $325 million.

Second, we know that players, past and present, often rave about their experience with the Dodgers Organization. If Andrew Friedman speaks in financial and statistical terms based on his background and experience, that may scare some people because it is new and on the surface, unfriendly.

However, therein lies the debate, spend money, save money, be friendly, get a job done, etc. All of us find ourselves in situations where we may need to toe the line, build a foundation, be a leader, and make the tough decisions.

Moneyball, the movie with Brad Pitt playing the role of Oakland Athletics President of Baseball Operations Billy Beane, is the prime example of this. Moneyball has indeed changed the game. The Dodgers, with the highest payroll in baseball, now employ economists, mathematicians, and stock traders from small market teams in the two highest positions with the Organization, Andrew Friedman, and Farhan Zaidi.

Friedman has taken it a step further by combining Moneyball with Mad Money. Is this at all surprising though?

Baseball has always been a game of hot dogs and statistics, tradition and change, scouting, projections, performance, and hope for next year. Moneyball just found a new way to look at statistics, players, and wins. The clash between what is important and what works, continues.

Have the Dodgers paid too much for wins?  Is there such a thing in certain cities and certain times and circumstances?  Championships matter in sports and especially in a baseball championship-hungry Los Angeles. As long as teams can buy talent, they will, and we can only hope for peace and prosperity in the relationship between the two sides.

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Jeremy Evans

Jeremy M. Evans is the Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele. Evans is an award-winning attorney and industry leader based in Los Angeles.

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