Howard Bryant had an interesting take Wednesday on ESPN regarding the health of the MLB and NBA. Bryant’s point is that the MLB is thriving because it has embraced player movement through free agency. Unlike in the NBA, where a player’s current team can offer him more years and money (or where David Stern can just shut down a trade), the MLB has no rules designed to keep players with the same team once their contract expires.
You can skip the video rebuttal by Jemele Hill, who played the unenviable roll of defending the NBA. She compares contract numbers for the NBA and MLB, noting that Pujols makes over $200 million against $100 million or so for the NBA’s top players. This isn’t a relevant comparison; what matters for judging the financial health of the league is the total league salary paid per year and the revenue generated by that salary (as well as distributional concerns). Pretty much all NBA contracts are 5 years or shorter while Pujols’s contract is 10 years, so Hill is comparing apples and oranges already. MLB revenue was nearly $7 billion in 2010, compared with only $3.5 billion for the NBA, and single contracts don’t give a good picture of total salaries anyway (after all, MLB rosters have twice as many players).
This and Bryant’s article got me thinking about team salaries and parity in general. In baseball, rich teams tend to do better, now more than ever. If you follow a smaller market team like me (granted, the Tigers have spent more the last few years), you surely believed this already. The pictures below (using the most recent year available in the USA Today salary database) help show how much money matters for winning across all professional sports:
MLB Team Salaries and Wins, 2011
NBA Team Salaries and Wins, 2009-2010
NFL Team Salaries and Wins, 2009
NHL Team Salaries and Wins, 2010-2011
MLS Team Salaries and Wins, 2010
I dropped the Clippers and the Los Angeles Galaxy from these graphs, since their salaries are extreme outliers (the Clippers are only $32 million, the Galaxy are over $11 million). The correlations between team salary and winning percentage are: 0.41 (MLB), 0.37 (NBA), 0.32 (NFL), 0.76 (NHL), and 0.05 (MLS). These pictures don’t tell a pure causal story, since being good will generally cause team salaries to rise to reward players (and take advantage of higher revenue). However, it seems clear that baseball, basketball, and football have similar rewards for spending, while the return in hockey is off the charts and there is almost no correlation in the MLS.
But if I drop a few more high outliers (Yankees, Phillies, Cavaliers, Knicks, and NY Giants), I get the following correlations: 0.20 (MLB), 0.49 (NBA), and 0.35 (NFL). I was pretty surprised by these numbers. I expected uncapped salaries in the data driven MLB to explain much more of winning percentage than they do. Maybe salary caps are saving teams from useless splurges? Or, maybe these salary numbers don’t take luxury tax expenses into account (which would increase the price of acquiring excess talent)?
I’m especially interested to hear feedback to explain the hockey results. There’s less variation in spending in the three major capped sports, but somehow these sports still reward the big spenders, particularly in hockey. I’ll try to post again on this topic tomorrow as well.
A side note: when compiling these data, I rediscovered that the Nationals and Dodgers only played 161 games this year (they did not make up a rain out, since both were eliminated from the playoffs). Some think the extra game could have helped Matt Kemp’s MVP push (probably not, though he had a case for the MVP over slightly too brawny Ryan Braun). Much more devastating, though, is that the Nationals finished 80-81. Poor Nationals — when your team is bad, .500 really means something. If you’re a Red Sox or Yankees fan, you probably don’t understand. Go read my brother Conor’s writing about growing up as a Tigers fan in the 1990s.