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2008 MLB Salary Report Card

By Rick Karcher, Michael McCann, Geoffrey Rapp, Greg Skidmore, and Howard Wasserman

Since 2005, I have been posting my Annual MLB Salary Report Card, which tends to prove each year a relatively weak correlation between a team's success and its total payroll. [Here are my past reports for 2005, 2006 and 2007.] This year's report leads to the same conclusion (based upon the USA Today salary database and rounded to the nearest million).

I've always thought that there is some threshold level of payroll by which a team is pretty much guaranteed to at least make the playoffs, but I was even proven wrong about that this year. The three teams with the highest payrolls in all of baseball -- Yankees ($209M), Mets ($138M) and Tigers ($138M) -- didn't even make the playoffs this year. [Note that these amounts do not reflect any luxury tax payments.] Last year, the Yankees spent about $20M less than they did this year but made the playoffs. Indeed, the Tigers keep spending more each year and keep doing worse. In 2006 they made the playoffs with an $83M payroll; in 2007 they failed to make the playoffs with a $95M payroll; and this year they finished last in the AL Central with a $138M payroll.

The team with the 4th highest payroll -- the Red Sox at $133M -- just got knocked out of the playoffs by the Devil Rays who advance to the World Series with the 2nd lowest payroll of $44M. And the Phillies advance to the World Series this year and are spending less than $100M with the 12th highest payroll. The Marlins had a very respectable year with the lowest payroll of $22M, finishing third in the NL East with an 84-77 record. But the Mariners really overpaid again this year -- they lost 101 games with a $118M payroll. And then of course there are the Twins who (once again) had a successful year with their low $57M payroll, finishing just one game behind the White Sox who spent more than twice as much ($121M) this year.

It's a shame to see the Indians spend more money this year than usual. Last year, with the 8th lowest payroll in all of baseball ($62M), Cleveland breezed through the AL Central by an 8-game margin and tied Boston for the best record in all of baseball. And in 2005 they had a 93-69 record with only a $42M payroll. This year they spend $80M and have a mediocre .500 season. Perhaps they'll go back to doing what works and lower their payroll next year.

Full post as published by Sports Law Blog on October 20, 2008 (boomark / email).