How Much Does Payroll Affect Winning Percentage?

I’ve put together a chart that illustrates how each Major League team since 1988 has fared, using winning percentage, and organized it by payroll rank. The warmer shades of red represent better winning percentages. The cooler the shade of red, the worse a team fared. The result is essentially a heat map, with each individual season possessing a sort of thermometer effect. The final column represents the average for each payroll rank.

A few things jump out. First and foremost, there’s a healthy correlation between success and payroll. The top of the chart is awfully warm, while the bottom of the chart cools off considerably. That said, plenty of lower payroll teams have managed to break through in the bottom of the chart to a higher winning percentage. It’s not a straight correlation. In recent years, the A’s, Rays, and Twins (teams not marked) have done a remarkable job of finding value with smaller payrolls. Similarly, the Mets and Dodgers (and others) have had more than their fair share of top-1o payroll disasters, teams tracking in the low .400s or even below .400 with a payroll rank in the top-10.

The caste system was especially harsh in the mid-to-late 1990s, as well as during the Yankees-Red Sox arms race circa 2003-2006. Recent years have seen a bit more economic equality in the game.

As always, click on the image for the full-resolution version.

PayrollRankThe payroll data came from the USA Today Salary Database.

 

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