Now that the Yankees have won the World Series, it seems appropriate to discuss the matter that represents the elephant in the corner for Major League Baseball--the role played by disparate revenues on the competitive balance of the enterprise.

This matter has been discussed many times in the past but it seemed to, somewhat inevitably, take on a new life recently as the Yankees made their way through the playoffs.  In a way I think that's unfortunate because it implies that the subject would have been dismissed if the Yankees had lost a series along the way.  The fact that the Yankees hadn't won the World Series since 2000 and hadn't even appeared in one since 2003 seemed to cause discussion of the inequitable distribution of financial resources in Major League Baseball to die down.  The implication was that if the Yankees weren't making it to the World Series, how much of a role could money really be playing in terms of on-field success?  

Ugh.

The discussion of this topic is invariably filled with canards and straw men.  Let's dispense with a few of them:

1)  It's not all about the money (Part A).  Look at all those years when the Yankees led the league in spending on player salaries and didn't win it all.

No one's saying it's all about the money.  There are plenty of examples of teams that have been among baseball's top spenders and had less than entirely successful seasons.  This seems to be an almost willful example of missing the point.

2)  It's not all about the money (Part B).  Look at the Rays going all the way to the World Series last year despite a low payroll.  Look at the Twins making the playoffs.

In part, see above.  Beyond that, this is a classic example of taking an exception and calling it the rule.  There's a clear correlation between player salary spending and winning in major league baseball; the fact that it's not a perfect correlation doesn't make it irrelevant or untrue.

3)  You're just making lame excuses to explain why the Orioles can't win.

No, I'm not.  I've long been on record as describing the Orioles as one of the worst run franchises in North American professional sports.  I have absolutely no illusions about a lack of salary parity in baseball causing the Orioles to lose.  The Orioles were losing when they were among the top spending franchises in the game a decade ago.  Consistently bad decisions over the course of many years will certainly trump spending parity.

4)  You're just a Yankee hater who won't give them their due.

I'm no Yankees fan, that much is true, but I've never seen the point of being intellectually dishonest about things I don't like that are nonetheless successful.  The Yankees have been, and still are, a successful baseball franchise.  I have no difficulty recognizing this or conceding the point.  That's not what this is about and, in fact, it's really not solely about the Yankees.  The Yankees must be at the head of the discussion, simply because of the behemoth that they are.

And now, a declaration:

When it comes to spending in Major League Baseball, we have the Yankees and we have everyone else.

The reason the Yankees are essentially always at the head of this discussion is that their spending is so out of whack with the rest of baseball it's positively breathtaking.  Exact numbers are hard to pin down, because total salary outlay in a given season is frequently augmented by pro-rated signing bonuses and cash paid to players no longer on a team's roster, but the Yankees' total player salary spending for 2009 was in the neighborhood of $207 million.  The second highest spending club--the Mets--spent roughly $139 million on player salaries this past season.  The difference, then, between the Yankees and the second highest spending team is approximately $68 million.  

• The Mets would have had to increase their payroll by nearly 50% to match that of the Yankees.

• The next largest ordinal gap on the list--the difference in payroll between the nth ranked team and the n-1 ranked team--was the approximately $10 million more that the 28th ranked Pittsburgh Pirates spent than the 29th ranked San Diego Padres ($53 million and $43 million respectively).

• The median payroll in MLB in 2009 was roughly $80 million, less than 40% of the Yankees' salary outlay.

• If you think that the sheer size of the Yankees' payroll, relative to that of Major League Baseball as a whole, doesn't matter, consider what the roster might have looked like if the team had spent $140 million, still the highest mark in the majors, but only $1 million more than the Mets spent:  Mark Teixeira, C.C. Sabathia, A.J. Burnett and Andy Pettite combined to earn about $58 million in 2009.  Sheering those salaries off the top would still leave about $8 million to be cut to get down to the $140 million mark.  Ask yourself how you think the Yankees would have finished this season without those players (or any other group of players on the roster whose combined 2009 salaries equaled $67 million).

• Seven major league teams had total payrolls smaller than the gap between the Yankees and the #2 spending team in baseball.

• The #2 spending AL East club--the Boston Red Sox--spent roughly $84 million less on player salaries in 2009 than the Yankees; 16 major league teams had payroll commitments smaller than the gap in salaries between the Yankees and the Red Sox.

• The Yankees have more money already committed in salaries for 2011 ($118 odd million) than 24 of the other 29 teams actually spent on player payroll in 2009.

As hinted at in some of the bulleted items above, one of the problems with relying on ordinal rankings in a data set is the natural tendency to assume that the slots are more or less proportional.  In other words, there's a presumption that the difference between one and two on a list is essentially equivalent to that between two and three and three and four and so on.  T'aint necessarily so, obviously.  To put this in stark perspective, consider this:  the approximate $68 million salary difference between the Yankees and the second highest payroll team (the Mets) is about the same as it is between the second ranked team and the twenty-third ranked team (the Reds).

I could go on and on illustrating the scope of the difference between the Yankees and everyone else.  The scope of the margin is so large that it remains difficult to illustrate in meaningful terms.  But one thing that isn't difficult to understand is that the difference matters--a lot.  It would be hard to do, but to ensure that the case isn't overstated, I will repeat that, large as the payroll difference is, it doesn't guarantee a World Series championship--or even a postseason berth.  (Remember, the Yankees managed to miss the postseason in 2008 despite a payroll advantage at least as large as 2009.)  But again--it's foolish to a fault to identify an exception and turn it into a functional rule.  The Yankees have been outspending the rest of baseball for years and they've missed the postseason once in the last 15 years.

Why this kind of salary disparity is advantageous is glaringly obvious, but just to hammer the point home, consider this.  In addition to the fact that the Yankees have more or less clear title to bid for any player the club wants--on the free agent or salary-dump-trade markets--the Yankees also have the advantage of being able to retain players on their existing roster without consideration of making any difficult choices.  In fact, the Yankees have the unique luxury of doing both of these things simultaneously.  Faced with the decision a couple of years ago about re-signing an aging, if still productive, catcher to a very lucrative multi-year contract or figuring out some less than optimal alternative, the Yankees simply signed Jorge Posada to a $52 million/4-year deal.  It was a deal, I daresay, that no other franchise in baseball would have made.  It was a very high risk/high reward kind of move, though the amount of risk is proportional to a team's ability to overcome decisions that don't work out.  

This is yet another clear cut salary disparity advantage for the Yankees:  the amount of assumed risk in any given personnel moves the club makes is, prima facie, far less than it is for any other team in major league baseball.  What's $52 million over four years for a team that's spending more than 250% of the league's median payroll?  If the Posada contract had been a total flop it would have had a minor impact, if any, on the Yankees' spending plans.  Now translate that calculus to a more representative (salary-wise) major league club like the Milwaukee Brewers.  Posada's salary in 2009 alone was the equivalent of approximately 1/6 of the Brewers' payroll.  Can a team like the Brewers afford to take that kind of a risk on a player like Posada?  The point is that the cost-benefit analysis for such a move is entirely different for the Brewers--or any other big league team--than it is for the Yankees.  We've seen the Yankees shrug off countless long, expensive, relatively unproductive contracts in the recent past (Carl Pavano, Jason Giambi, etc.) with little detrimental effect.  Ask yourself what the effect of one Pavano-like experience (a four-year contract for just under $40 million for an utterly unproductive, untradeable player) would have been on virtually any other team in baseball.  It had no discernible impact on the Yankees, who continued to sign and trade for expensive players even after it was palpable that Pavano was a complete bust.  For all the giggling about how stupid the Yankees had been for signing Pavano in the first place, it was a very low risk move for the team and while the club was undoubtedly disappointed in Pavano's total failure, it didn't seriously impact the Yankees' moves and, I'm convinced, wasn't a total shock to the front office either.  They likely grumbled, shrugged, and moved on to Plan B.  In many other places around major league baseball, such a scenario would have meant the loss of someone's job and a complete strategy makeover and multi-year retrenchment.  What would have been the equivalent of a diagnosis of advanced heart disease elsewhere was a case of the sniffles in the Bronx.

To stretch the explication of the salary disparity advantage the Yankees hold a step further, think about the notion of homegrown players.  Much has been made about the fact that a significant number of players on the Yankees' 2009 roster were products of the Yankees' farm system.  This is true, the most significant of those being Posada, Pettite, Derek Jeter and Mariano Rivera, as well as other relevant, though generally less consequential, players including Robinson Cano, Melky Cabrera, Phil Hughes and Joba Chamberlain.  But the advantages of a massive payroll extend far beyond the ability of the team to acquire expensive free agents (Sabathia, Teixeira, Burnett, etc.) and productive salary dump individuals (Alex Rodriguez, Nick Swisher, etc.).  It includes the ability to keep productive players--all of them--as they enter their arbitration and free agent eligibility years.  This is a luxury no other team has--at least not to the extent that it applies to the Yankees.  Most other clubs have to decide which--if any--of multiple players it can afford to keep as arbitration and free agency loom.  Consider the Oakland Athletics a few years ago, who ultimately surrendered All-Star players by the boatload--Jason Giambi, Miguel Tejada, Barry Zito, Tim Hudson, Mark Mulder--while retaining only Eric Chavez, breaking up a repeat playoff team in the process and essentially exiling themselves to the postseason wilderness in the process.  There's no way the Yankees would have let that happen.  I submit that it's likely that, in the same situation, the Yankees would have re-signed every single one of those players.  Even clubs much higher up the pecking order than the A's find themselves in the position of deciding who they can keep and who they can't.  The situation in St. Louis right now is illustrative of this as the Cardinals face the looming expiration of Albert Pujols' contract and its implications for its own impending free agent class this off-season.  Despite the fact that, by all accounts, the Cardinals would like to retain the services of Matt Holliday and he'd like to stay (all things being equal--which they aren't), everyone involved appears to have concluded that the team cannot pay Pujols a market-level extension and re-sign Holliday.  This, flat out, would never happen with the Yankees.  If this were the Yankees, Pujols would get an A-Rod-like extension and Holliday would be working on a "Posada-plus" deal.  Does anyone doubt this?  If so, tip a glance back to the off-season prior to the 2008 season when the Yankees did exactly this with Rodriguez (who'd opted out of his previous contract, only to sign a 10-year/$325 million replacement) and Posada, who was a pending free agent.

The implications of all of this are stark.  There's a tremendous built-in advantage, in every player personnel respect, for the Yankees over the rest of the teams in major league baseball, from free agent acquisition, to favorable trade terms to roster retention, all of which have obvious on-field implications.  The fact that the Yankees were unable to parley these assets into a world championship for eight seasons mitigates nothing.  I'm plainly identifying this red herring.  And I'm not "blaming" the Yankees for using this advantage.  We should expect nothing less.  They're playing within the rules; shame on any pro sports franchise that doesn't leverage its legitimate advantages to try to win.  In fact, paradoxically, we should congratulate the Yankees for exploiting this advantage so shamelessly because it makes it much easier than it otherwise would be to deflect absurd claims that such an advantage is relatively minor or--as incredibly stated by some--is virtually non-existent.

While the Yankees are the 900-pound gorilla in all of this, they're not the only oversized primate in the room.  There are plenty of other teams with their own--admittedly more subdued--built-in revenue advantage which unlevels the playing field in their favor.  That this group is--mostly--less successful in exploiting this advantage than the Yankees is a function of a much smaller disparity than the Yankees hold over everyone else and, in some cases, a function of incompetent leadership, but a relatively smaller advantage doesn't mean no advantage--hardly.

For instance, when it became apparent recently that the Tigers might be shopping Curtis Granderson, three teams publicly were identified as being interested:  the Yankees (what a shock), the Angels and the Cubs.  The Angels and the Cubs are two of the other mini-Goliaths in MLB; the Cubs had a 2009 payroll of roughly $138 million (just barely behind the Mets, in third place) and the Angels spent approximately $117 million on player salaries last year (seventh in MLB).  The Cubs spent about $60 million more than the MLB median last season and are apparently prepared to raise that level in 2010.  Granderson is owed nearly $24 million over the next three years of his contract, and it's noteworthy that none of the clubs with the 23 lowest payrolls in baseball have been mentioned as possible trade destinations for Granderson.  Some of those clubs probably don't see him as a good fit for any one of a variety of reasons.  And many of these teams would like to add Granderson to their roster but aren't in a position to take on his contract.  This is just one example, of course, but it's apt.  Expensive players--be they free agents or shopped as trade bait--simply are never realistic possibilities for more than half the teams in baseball.  Ever.

Bottom line:  this resource disparity is bad for baseball.  What would be good for baseball is if each team's fan base had a credible reason to believe that if it's club is as well-run as any other franchise, it has a legitimate chance to contend, year in and year out.  This is simply not the case right now.  Teams at a significant resource disadvantage clearly must be a whole lot better run--and a whole lot luckier--than a similarly run franchise at or near the top of the resource pecking order.  There's nothing complicated about this statement:  teams with more resources have a better chance of success than teams with lesser resources.  It's intuitive.  And, furthermore, teams with access to substantially greater resources have a substantially better chance of success than teams with lesser resources.  The fact that this relationship isn't axiomatic (i.e. that wealthier teams don't always win and poorer teams don't always lose) doesn't make it non-existent or irrelevant.

Until Major League Baseball figures out a way to eliminate--or at least substantially reduce--the payroll disparity that exists, MLB will remain the inequitable oligarchy that it's become.

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