Thursday, April 10, 2008

Cost per win analysis

A little more than one week into the season and the Marlins are in first place by 1.5 games. Obviously, this is a very small sample size but given all the talk about the Marlins tiny payroll I thought it would be interesting to analyze who is getting the most and who is getting the least for their money. Below you will find a spreadsheet with my analysis.

Next to each team's name is the projected 2008 payroll for that team. The next column is the payroll number divided by 162 (the number of games in the full season), this is essentially the payroll cost per game. Then we have wins and losses. The next column is the payroll per game multiplied by the total number of games played (or payroll expended to date). And finally the last column is the payroll expended to date divided by wins (or the cost per win).

As you can see the Marlins are achieving the biggest bargain per win, paying less than $216,000 per win. On the opposite end of the scale are the Tigers who have only one win to date and have spent just under $6.9 million for it. The Tigers are paying 31 times more per win the Marlins.

The point of the exercise is to add a little texture to the argument that a large payroll does not necessarily lead to winning. The question that each club must ask itself when negotiating each contract is whether the player they are signing will lead to more wins and are they over-paying?

The average projected payroll for 2008 is $89.9 million. 4 of the 6 current division leaders have below average payrolls (Baltimore, Kansas City, Florida, Arizona).

Go figure.

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