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Sports Authority

Kramer: Money still buys wins

| Monday, September 20, 2021

Bennett Miller’s quintessential baseball film “Moneyball” remains one of the most honest looks about transformative thinking and cognitive biases in the realm of sports. Peter Brand, Jonah Hill’s wonderfully depicted assistant to Billy Beane, places the narrative under this lens throughout the film.

But perhaps most definitively, through his anti-establishment viewpoint among a group of lifelong baseball traditionalists,
Peter Brand frames the game of baseball under a purely analytical lens in ways that deserve to be revisited in today’s game. In one of the most critical scenes of the film, the fictional Brand reduces the Oakland Athletics’s problem of replacing the former “big three” of the Coliseum — Johnny Damon, Jason Giambi and Jason Isringhausen — to a quest to buy wins. Looking beyond the mere optics of the game, the philosophy is simple: The A’s needed to buy wins, and in order to do that, they needed to buy runs. While revolutionary at the time, this idea is commonplace today.

In today’s game, however, MLB players show a propensity for picking and choosing when to adopt this philosophy when it becomes convenient for them. The MLBPA has recently proposed the implementation of a salary floor under which MLB team owners must satisfy a minimum annual payroll to avoid being financially penalized by the league.

Alongside this shift, the MLB would introduce a more stringent luxury tax threshold. Currently, teams that spend over $210 million in one year of payroll are taxed 20% in overages. This penalty increases to a whopping 50% as teams surpass the threshold in more consecutive seasons. Under the latest proposal, the threshold would tax violating teams at 25% for their first excess of $180 million.

Undoubtedly, the MLBPA will never approve of a plan like this one. High-salary players hold more than enough leverage to oppose these market restrictions under the notion that their salaries would be reduced so as to make more room for low-salary players under the threshold.

Most critically, the MLBPA won’t like to acknowledge who this proposal really benefits. It won’t protect the potential salaries of elite players seeking mammoth contracts, nor will it protect high-paying powerhouses that flirt with the threshold annually (Dodgers, Yankees, Mets, Astros). The plan does, however, incentivize small-market team owners to invest. Plain and simple.

Organizations like the Pirates and Orioles struggle to find consistent success amidst the sea of big-time spenders in the NL Central and AL East, respectively. It is not as if the owners lack the cash — financial prowess is an undisputed prerequisite for team ownership. But the incredibly thin margins of a small market team leaves owners threatened by operating at a loss if the team flops. They feel little motivation to invest in their players and, most likely, generate success. Oh, how the negative feedback loop, well, loops.

MLBPA players and media opponents of the deal argue that a free market structure should set the annual payrolls of teams. They will point to successful small-market teams like the current Rays, the 2015 Royals or the 2016 Cleveland team. They won’t point to the fact that nine of the last 10 World Series champions have payrolls well over the league average, and they certainly won’t point to the troves of correlation analysis between payroll and wins.

The heavily muted truth begs the question: For a league that is meant to encourage fair play, why should an unfair free-market guide baseball?

In every sense of the word, money still buys runs and runs still produce wins. It’s the simplest formula for teams seeking success. Surely baseball experts will attack my evaluation and rationalize with “It just isn’t that simple!” But why can’t it be?

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About David Kramer

David Kramer is a senior double majoring in Business Analytics and ACMS. You might find him DJ'ing at WVFI Radio, convincing a friend that Minnesota is the best state in the Midwest, or searching for America's best Reuben sandwich.

Contact David