Tyler Forgione
Blog Post 1
Due 2/3/17
My hashtags I have chosen are, #MLB, #Yankees, #RedSox, #Orioles, #LADodgers, #SFGiants, and #SDPadres. I have selected these six teams to represent both the east and west coast of Major League Baseball. The east coast teams are all American League teams that vary in the team philosophies regarding financial spending, player development, and community impacts. The west coast teams I have chosen share the same organizational ideological similarities and differences, but represent the National League. I expect to see tweets from fans and MLB analysts regarding the MLB and these individual teams and their impacts on the league and their cities. This topic interests me because I hope to work in sports and studying teams as individual entities that have their own operational philosophies will give me further insight into this profession.
I was not surprised by the results that I found because I assumed I would find tweets that posed little relevance, while also discovering tweets that lead my research elsewhere. One irrelevant tweet I studied was from @MAWheelah saying, “Awesome special outfield #dance from the #RedSox ♥ #GoPats #OneMore https://t.co/slv2weoZrC”. This may be relevant to Red Sox fans and how they identify with the team, but it is irrelevant to my study. One relevant tweet I examined was from @hairdivajamie, “Please #sfgiants don’t let #romo go and especially not to the #dodgers #sfgiantsforlife #bleedorange”. On the surface, there isn’t much here, but it leads me to search other sources for information about Sergio Romo and his potential trade to the dodgers, not only their rival, but another team I am studying.
For this week’s study I am examining this tweet from @BoSoxInjection, “Forbes values the #RedSox at $2.3 billion, are John Henry and co. priming the team for sale?” This raises the question of how teams accumulate money and how is their financial success or failure related to their on field performance.
The Red Sox are one of the most dominant baseball organizations in the MLB. They accrue one of the largest incomes, which support their ability to afford some of the leagues top players and front office personnel. In 2016, the team profited over 1 billion dollars in revenue from the market and merchandise alone.[i] Having a strong prowess in the market allows them the opportunity to utilize more money to increase the teams spending to benefit the team on and off the field. This will provide a better team resulting in more wins, which will draw more fans increasing revenue. It also leads fans to spend more money on team merchandise spreading the team name further into the community and increase income outside of ticket sales. Team value and annual player payroll affect team performance, or trends can be found regarding these values.
In 2014, the Los Angeles Dodgers spent over $250 million dollars for the players on their major league roster.[ii] The Dodgers made the playoffs that year, but only won one playoff game before being eliminated, despite having one of the highest roster salaries. The amount of revenue the Dodgers generate, they can afford to spend large quantities of money to enhance their roster. However, throwing money at a problem doesn’t always lead to a solution, although it may help. In addition, there are front office analytics that organizations apply to ensure that their millions of dollars are not wasted (I will examine this in a later study).
| 2016 MLB Payrolls | Team | Wins (2015) | Average Salary (2016) | |||
| Rank | Team | Salary | National League | |||
| 1 | Los Angeles Dodgers | 227,329,905 | St. Louis Cardinals | 100 | 4,455,628 | |
| 2 | New York Yankees | 214,248,571 | Pittsburgh Pirates | 98 | 2,862,861 | |
| 3 | Detroit Tigers | 173,306,250 | Chicago Cubs | 97 | 4,166,233 | |
| 4 | Boston Red Sox | 166,770,400 | Los Angeles Dodgers | 92 | 7,445,080 | |
| 5 | San Francisco Giants | 166,495,945 | New York Mets | 90 | 3,558,088 | |
| 6 | Washington Nationals | 163,018,658 | San Francisco Giants | 84 | 5,946,284 | |
| 7 | Los Angeles Angels | 146,449,583 | Washington Nationals | 83 | 5,724,516 | |
| 8 | Texas Rangers | 132,457,373 | Arizona Diamondbacks | 79 | 2,358,761 | |
| 9 | San Diego Padres | 126,107,229 | San Diego Padres | 74 | 4,357,573 | |
| 10 | Seattle Mariners | 123,225,843 | Miami Marlins | 71 | 3,134,722 | |
| 11 | St. Louis Cardinals | 120,301,958 | Colorado Rockies | 68 | 3,388,316 | |
| 12 | Chicago Cubs | 116,264,024 | Milwaukee Brewers | 68 | 3,795,501 | |
| 13 | Toronto Blue Jays | 115,901,600 | Atlanta Braves | 67 | 2,920,755 | |
| 14 | Baltimore Orioles | 115,886,000 | Cincinnati Reds | 64 | 4,323,418 | |
| 15 | Kansas City Royals | 110,914,525 | Philadelphia Phillies | 63 | 4,434,933 | |
| 16 | Cincinnati Reds | 110,584,786 | American League | |||
| 17 | Chicago White Sox | 110,052,866 | Kansas City Royals | 95 | 4,032,662 | |
| 18 | Philadelphia Phillies | 107,610,500 | Toronto Blue Jays | 93 | 4,342,142 | |
| 19 | Minnesota Twins | 102,360,861 | Texas Rangers | 88 | 4,509,605 | |
| 20 | New York Mets | 99,663,329 | New York Yankees | 87 | 7,361,133 | |
| 21 | Milwaukee Brewers | 98,970,536 | Houston Astros | 86 | 2,466,579 | |
| 22 | Colorado Rockies | 97,261,171 | Los Angeles Angels | 85 | 5,049,986 | |
| 23 | Oakland Athletics | 88,261,667 | Minnesota Twins | 83 | 4,163,923 | |
| 24 | Pittsburgh Pirates | 86,136,333 | Baltimore Orioles | 81 | 3,985,780 | |
| 25 | Miami Marlins | 85,531,500 | Cleveland Indians | 81 | 3,197,743 | |
| 26 | Cleveland Indians | 83,746,766 | Tampa Bay Devil Rays | 80 | 2,454,986 | |
| 27 | Atlanta Braves | 81,288,899 | Boston Red Sox | 78 | 6,072,047 | |
| 28 | Tampa Bay Rays | 71,760,208 | Chicago White Sox | 76 | 3,525,460 | |
| 29 | Houston Astros | 69,064,200 | Seattle Mariners | 76 | 3,134,722 | |
| 30 | Arizona Diamondbacks | 56,270,333 | Detroit Tigers | 74 | 6,891,290 | |
| Oakland Athletics | 68 | 2,508,724 | ||||
This graph shows team payrolls on opening day 2016 and the amount of wins each team had the previous season. This also shows the average salary per player in 2016.
The correlation between wins and team payroll is 0.23, which is relatively high enough to concern a team about spending on players to enhance team performance. Teams with more money to spend can be less careful about spending, but teams with lower revenues need to be more careful about spending to still field a competitive team. Teams that spend more money are more likely to perform better because they can afford the better players. A team’s financial success is based very strongly off of one dynamic, wins.
The correlation between wins and financial security varies drastically from teams that win 80, 90, and 100+ games. Teams that win 80 games tend not to make much money during the season, especially teams in smaller markets. These teams profit ranged from about $0.4 to $1.4 million in 2001. Teams that won 90 games had much greater profits, ranging from $1.5 to nearly $4.5 million.[iii] Once teams pass 100 wins they actually begin to lose money they were earning because at the end of the season their games become less competitive as starters tend to sit and rest for the playoffs and the team is not playing as many competitive games. This draws fewer fans to go to games and hurts the revenue possibilities for the team. The ideal amount of wins for a season is around 95 as the team has dominance, but is still playing competitive games.[iv]
The MLB is a prominent league that generates one of the highest revenues in all of sports and sees some of the highest paid athletes in the world. Teams have to stay ahead by making upgrades to stadiums, gear, and personnel. Teams make strategic moves to improve their economic standing to benefit their market value and their player development. Finance is a driving force for teams that making right and wrong decisions can result in a World Series win, or bankruptcy and a change of ownership.
[i] “Boston Red Sox on the Forbes MLB Team Valuations List.” Forbes. Accessed February 05, 2017. http://www.forbes.com/teams/boston-red-sox/.
[ii] Knight, Molly. The best team money can buy: the Los Angeles Dodgers’ wild struggle to build a baseball powerhouse. New York: Simon & Schuster, 2015. 265
[iii] Gennaro, Vince. Diamond dollars: the economics of winning in baseball. Hingham, MA: Maple Street Press, 2007. 40-41
[iv] Gennaro, Vince. Diamond dollars. 55
Works Cited
“Boston Red Sox on the Forbes MLB Team Valuations List.” Forbes. Accessed February 05, 2017. http://www.forbes.com/teams/boston-red-sox/.
Gennaro, Vince. Diamond dollars: the economics of winning in baseball. Hingham, MA: Maple Street Press, 2007.
Knight, Molly. The best team money can buy: the Los Angeles Dodgers’ wild struggle to build a baseball powerhouse. New York: Simon & Schuster, 2015.