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Expert: No, the Yankees DID NOT buy their title

Nov 16, 2009, 10:30 AM EDT

A week and a half ago I asked whether or not the Yankees bought their title.  Given that, as of this morning, 652 people have commented on that, I feel comfortable saying that the subject struck a nerve.

Today noted sports economist Andrew Zimbalist says in the Wall Street Journal that, nope, the Yankees did not buy their title:

It’s a little surprising, but the statistical relationship between a team’s winning percentage and its payroll is not very high. When I plot payroll and win percentage on the same graph, the two variables don’t always move together. In other words, knowing a team’s payroll does not enable one to know a team’s win percentage.

More precisely, depending on the year, I find somewhere between 15% and 30% of the variance in team win percentage can be explained by the variance in team payroll. That means between 70% and 85% of a team’s on-field success is explained by factors other than payroll. Those factors can include front office smarts, good team chemistry, player health, effective drafting and player development, intelligent trades, a manager’s in-game decision-making, luck, and more.

Interesting, sure, but this should all be taken with a grain of salt.  For one thing, while Zimbalist is the most famous sports economist out there, he has had his butt handed to him over what appears to be some pretty sloppy work in the past.  He obviously knows more about sports business than you or I do, but whether he always uses that knowledge to reach sound conclusions, as opposed to starting with conclusions and using that knowledge in an effort to justify them, is an open question. Indeed, it’s an open question with all supposed experts.

Secondly, while the Yankees have always had money, with the opening of their new stadium, that money is reaching unprecedented levels (another sports economist, Vince Gennaro, thinks that their revenue went up by $100 million based on the stadium alone). Zimbalist talks about how the contracts they buy now may eventually become burdensome as the players age and “will weigh on the team’s ability to acquire other players,” but with the kind of cash flow the Yankees are seeing now, that conclusion is questionable.  Sure, there’s some payroll number that the Yankees can’t afford, but there’s no indication that they’re anywhere close to reaching it. 

Finally, while the Yankees have long been free agent players, we may very well be seeing something new in the past couple of years in terms of their ability to consistently and effectively use their money to get the right players.  Ask yourself: what could have happened in the early part of this decade if the quiet Hal Steinbrenner had been in charge instead of the boisterous and emotional George?  Can we say for certain that the Yankees wouldn’t have won more titles if, rather than waste their time with the Jaret Wrights and Kei Igawas of the world, they had done what they did last winter and simply decided to sign the absolute top free agents?

Maybe those are unanswerable questions, but two things are certain: (1) while the Yankees have always had a fat wallet, that wallet is now fatter than it has ever been; and (2), while the Yankees have always spent their money freely, they have only recently really started to spend their money wisely. Each of those factors may radically change Zimbalist’s dollars/wins graph going forward.

  1. Simon DelMonte - Nov 16, 2009 at 10:59 AM

    We need a debate between Dr. Zimbalist and Joe Posnanski on this topic.
    Though if the Yankees win the next four years in a fashion like this one, we’ll have our answer.
    Maybe.

  2. JFK2112 - Nov 16, 2009 at 11:04 AM

    Um, there number 1 and 2 pitcher and 1st Baseman were all the best FA available last year and the Yankee’s signed all three. They bought it for sure!

  3. John_Michael - Nov 16, 2009 at 11:06 AM

    Mr. Zimbalist’s article is analytically empty. It basically amounts to “Here’s my conclusion. Trust me on my methodology b/c I’m not showing it to you.” Saying payroll doesn’t have strong statistical significance while failing to mention what variable has the most influential coefficient should cause one to chase the article with a few grains of salt.
    From Billy Beane’s book, we know that the playoffs are a crap-shoot. Show me the correlation between payroll and making the playoffs.

  4. ecp - Nov 16, 2009 at 11:23 AM

    While I think it’s fairly clear that the correlation between payroll and winning percentage is sketchy (see 2008 Seattle Mariners), it’s also a bit simplistic to state that there is no relationship. When one team can ALWAYS outspend every other team to acquire any and all free agents it desires, that team attempts, usually successfully, to sign the best free agents on the market in any given year. And the correlation between having the best players and winning percentage is crystal clear.

  5. Babba Booey - Nov 16, 2009 at 11:35 AM

    stop crying …redsox still suck!!
    Babba booey Babba Booey

  6. Old Gator - Nov 16, 2009 at 11:43 AM

    Thanks for stating the obvious. I’m a little surprised that the connection you bring up between the numbers you’ve already put up and what you’re worth in the market hasn’t been made here yet. If the Steinbrenners had cut a check to the Commissioner and he had handed them the trophy in return, sure, you could say that the Borg somehow “bought” their title. I have never been a Borg fan in any way, shape or form – I started out a Brooklyn Dodgers fan just in time to have my wee heart broken, adopted the Mets because they really looked (and played) like they needed to be adopted (and for the most part still do), then became a Marlins fan when, after moving down here permanently, the community got the franchise. Fickle? Deal with it. And I hate the designatedhitterball league almost as much as prion infections. But the truth is, the Borg didn’t buy any champtionship; they played for it.

  7. Dan - Nov 16, 2009 at 11:47 AM

    Zimbalist’s argument is that salary and wins aren’t highly correlated. And the best data point for that is the 2008 Yankees, who lead the league in salary but failed to make the playoffs.
    But so what? No one is arguing that a league-leading salary is dispositive of on-field success. So the fact that there’s a weak correlation doesn’t rebut the *actual* argument:
    1) The Yankees had the highest salary in 2008;
    2) They lost;
    3) So they spent a whole lot more to make sure they didn’t lose in 2009.
    Not only do I not see a problem with that strategy, at least from the guise of “if I were the Yankees, what would I do,” but I also don’t see how one can dispute it.

  8. AJ Gallo - Nov 16, 2009 at 12:33 PM

    Whine, whine, whine. Geez, nobody cared about the Yankees’ payroll from 2001 to 2008! As long as the Yankees didn’t win anything, nobody cared if their payroll was $300 million. Now that they’ve finally won their first championship since 2000, it’s once again the subject of everybody’s whine. Listen, if you have a problem with the whole matter, fine, that’s your right. But don’t blame it all on the Yankees. Take it out on the system. But the system won’t change, you know why? Because these owners of the so-called “poorer” teams are making more money taking the tax revenue from the Yankees and running to the bank with it. And the system won’t change because those owners really DON’T WANT a salary cap. That’ll only force them to spend more money on their teams while not getting any more tax revenue from the Yankees. So what those owners do in the meantime is whine about the Yankees’ big payroll and boo hoo, they’re bad guys we can’t keep up with them, and then run to the bank and deposit the revenue they make from the Yankees. They don’t spend that money on their team, bank that money, and then divert their fans’ attention away from how poorly they’re running their own teams. This way, the fans take out their anger on the Yankees instead of where it should be centered, on their own owners.

  9. Faiaz - Nov 16, 2009 at 1:07 PM

    Setting: Game 6 of the 2009 World Series at a livingroom in Boston.
    Redsox fan A: Aw faack, those damn Stankees aa gonna win in again. Now we have to hea so much crap from those obnoxious fans.
    Redsox fan B: I got a wicked idea, we’ll justify the situation by blaming the whole thing on their payroll.
    Redsox fan A: But aowa salary was 50M high-a than the Caads in 04 and 80M high-a than the Rockies in 07.
    Redsox fan B: We aa a small maaket team. No one noticed.

  10. Char_in_Miami - Nov 16, 2009 at 1:08 PM

    perfect case in point – the florida marlins. their owner is so cheap it’s pathetic.
    miami’s economy at present really sucks. this is due partly to the jerk ex-mayor diaz who (possibly got kickbacks and the highest interest rate on stadium bonds?) pushed through the new stadium WITHOUT A VOTE BY THE CITIZENS OF MIAMI who will be paying for the stadium AND THE COST OVERRUNS ASSOCIATED WITH IT, and the owner of the marlins, who expects everyone BUT him to help out the marlins. for sure the taxes paid by tourists isn’t going to be enough to pay off the bonds any time soon – as in 50 years.
    add to that, why would tourists want to come to miami – to see the sex offenders living under the julia tuttle causeway? if someone shot a video of that scourage on society and posted it on you tube, tourism to miami would possibly screech to a halt.
    it would be wonderful if the new mayor could re-address the stadium nonsense. let the owner pay for the stadium.

  11. mick-7-1961 - Nov 16, 2009 at 1:19 PM

    I’ve said it before and I’ll say it again,
    Money doesn’t win ball games, players do.

  12. comeonman - Nov 16, 2009 at 1:27 PM

    As a Yankee fan I will no longer APOLOGIZE FOR THEM BEING
    CHAMPIONS OF BASEBALL, IT IS A RIDICULOUS ARGUMENT AND IT
    PROVES THAT IF THIS IS YOUR OPINION YOU NO NOTHING ABOUT
    BASEBALL AND YOU ARE JUST MISERABLE YOUR TEAM LOST, AGAIN.
    Everyone should be REQUIRED to announce the TEAM THEY PLEDGE
    THEIR LOYAL SUPPORT TO, THIS WAY I KNOW HOW TO FORMAT MY
    RESPONSE, UNTIL THEN STOP COMPLAINING.
    THE YANKEES ARE CHAMPIONS OF BASEBALL

  13. comeonman - Nov 16, 2009 at 1:32 PM

    As a Yankee fan I will no longer APOLOGIZE FOR THEM BEING
    CHAMPIONS OF BASEBALL, IT IS A RIDICULOUS ARGUMENT AND IT
    PROVES THAT IF THIS IS YOUR OPINION YOU NO NOTHING ABOUT
    BASEBALL AND YOU ARE JUST MISERABLE YOUR TEAM LOST, AGAIN.
    Everyone should be REQUIRED to announce the TEAM THEY PLEDGE
    THEIR LOYAL SUPPORT TO, THIS WAY I KNOW HOW TO FORMAT MY
    RESPONSE, UNTIL THEN STOP COMPLAINING.
    THE YANKEES ARE CHAMPIONS OF BASEBALL

  14. comeonman - Nov 16, 2009 at 1:35 PM

    As a Yankee fan I will no longer APOLOGIZE FOR THEM BEING
    CHAMPIONS OF BASEBALL, IT IS A RIDICULOUS ARGUMENT AND IT
    PROVES THAT IF THIS IS YOUR OPINION YOU NO NOTHING ABOUT
    BASEBALL AND YOU ARE JUST MISERABLE YOUR TEAM LOST, AGAIN.
    Everyone should be REQUIRED to announce the TEAM THEY PLEDGE
    THEIR LOYAL SUPPORT TO, THIS WAY I KNOW HOW TO FORMAT MY
    RESPONSE, UNTIL THEN STOP COMPLAINING.
    THE YANKEES ARE CHAMPIONS OF BASEBALL

  15. comeonman - Nov 16, 2009 at 1:36 PM

    As a Yankee fan I will no longer APOLOGIZE FOR THEM BEING
    CHAMPIONS OF BASEBALL, IT IS A RIDICULOUS ARGUMENT AND IT
    PROVES THAT IF THIS IS YOUR OPINION YOU NO NOTHING ABOUT
    BASEBALL AND YOU ARE JUST MISERABLE YOUR TEAM LOST, AGAIN.
    Everyone should be REQUIRED to announce the TEAM THEY PLEDGE
    THEIR LOYAL SUPPORT TO, THIS WAY I KNOW HOW TO FORMAT MY
    RESPONSE, UNTIL THEN STOP COMPLAINING.
    THE YANKEES ARE CHAMPIONS OF BASEBALL

  16. millybo - Nov 16, 2009 at 1:36 PM

    Did the Red sox buy their championships? or did their players play for free? Well i guess Manny and David were paid by some other means.mmmmmmmmmmmm.

  17. NYguy - Nov 16, 2009 at 1:40 PM

    If that was representative of how all people in Boston speak and think, then I feel sorry for the team they follow. Even the Sux deserve better.

  18. Robin - Nov 16, 2009 at 1:48 PM

    Tell me why this issue is being rehashed again and why it matters at that. It’s just whining and a lot of erroneous excuse making. Actually it sounds like SOUR GRAPES and poor sportmanship to me! The Yankees’ bank account and wallet are getting larger and have almost always been the largest because the name New York Yankees sells and is recognizable around the globe. Let’s throw into the equation the honor and prestige of playing MLB for a historical, tradition filled team like the Yankees. I bet if salary caps were imposed most players would still want to play for the Yankees if given the opportunity.
    I think AJ Gallo is onto something. Try looking to the owners of other teams for placing responsibility concerning personnel and spending. Too many of the current owners are more interested in fattening their personal bank accounts and letting the fans believe that they’re doing everything they can and it’s the spending and payroll of the Yankees that are dooming them from putting together a team of contenders. How many times has talent left another team to go with the Yankees because the original team wouldn’t put their money where their mouth is? Instead, those teams and the owners let the fans believe that it was the Yankees huge numbers that stole the player when in fact it was the team and the owner who didn’t want to pay the big bucks and build a team of the future because it might mean cutting someone else who is dragging them down but has “potential” as deemed by management.
    27 World Series championships and counting…..

  19. Tank - Nov 16, 2009 at 2:28 PM

    all teams get 81 games to create revenue

  20. BABBA BOOEY - Nov 16, 2009 at 2:34 PM

    Wny must the losers cry.NO ONE had anything to say except money can’t buy a championship since the last yankees championship in 2000.Know the bombers are back on top and the haters have come out of the woodwork again.as AJ GALLO says in his comment if it wasnt for the revenue the yankees bring in some of these smaller market teams maybe worse off than they allready are.. my suggestion to fans of other teams…go to your teams games support them if they cant get 4,000 people to a GAME they will probably not field a winning team that can stay together.IE.marlins
    p.s. REDSOX STILL SUCK AND THE METS
    BABBA BOOEY BABBA BOOEY

  21. judyj - Nov 16, 2009 at 2:43 PM

    I don’t care – salary cap, what anyone spends – you have to spend to make money and everyone should know that by now. The difference here is Mark T – we got him, Boston didn’t. No matter how much money is spent or how short the money is on a player – it is still the players who make the difference. The Yankees are the World Champions because their goal is ALWAYS to be World Champions. When they don’t win, they know they need to improve to reach their goal. If that means spend more money, raise ticket prices, etal, then so be it. No matter what anyone says it works. And when it doesn’t work, as a Yankee fan, we know that it will work the next time around. So everyone should stop whining – because nobody cares. There are winners and then there is everybody else no matter who spends what.

  22. j - Nov 16, 2009 at 2:48 PM

    did i miss s/thing? aren’t the other MLB teams paying their players? you mean no one on the Phillies team was paid last year? Wouldn’t they have paid and bought for their championship as well?

  23. Matt - Nov 16, 2009 at 3:06 PM

    My e-mail chain discussed this article today. Here were some conclusions and analysis I gave:
    Ok, first thing I have done is run a simple correlation between payroll and wins for the 2009 season. It came out to be .46. That is a huge correlation, like epically huge in terms of significance. So payroll is a very important factor. I than broke up the leagues (NL and AL… since teams rarely cross over this is a more elegant measure) and the correlation in AL between wins and payroll was .69. Wow. NL was only .19,**** so payroll is going to be by far the most important factor in determining who wins games in the AL.
    Next, as for your question Bern, this guy must have run some kind of multiple regression in which he threw in a ton of data for variables like front office, team chemistry, and injuries, and came out with payroll accounting for between 15-30% of the variance in team wins. Since he doesn’t share the data I can’t begin to try and replicate his results. What I can tell you is this is dumb. Why you ask, well a team’s payroll is only part of a wealthy teams advantage. Teams with more money can hire better GM”s, better analysts, hell they can hire MORE analysts. More scouts, set up better international programs, pay a Japanese team 50 million dollars just for the right to negotiate with one of their players, hire better trainers. In essence every aspect he mentions has an advantage tilted towards teams with more money.
    On to his playoff comparison, 8 teams make the playoffs every year. That is about 25% of the league. So, over the course of 6 years (2004-2009 inclusive) the chance of a team not making the playoffs in any one of those years would be (1 – 0.25) to the 6th power. Or 17.7% chance. If this was a randomly distributed event. So we would expect 17.7% of teams to not make the playoffs (5.487 teams) over that course of time if we were working with a level playing field. How many teams didn’t make the playoffs? Ten of 31, or 32.25 % of teams. That is a large difference.
    **** mainly because there is no DH and thus more reliance on pitching in the NL. Pitching is much more variable and thus money gets spent more in the NL on players who are not consistent.

  24. comeonman - Nov 16, 2009 at 3:34 PM

    Big Game Andy WON ALL three game clinching victories, his salary
    $5.5 million…….
    When Damon stole second and third base his salary played no part,
    he was just a smart ballplayer.
    THE YANKEES ARE CHAMPIONS OF BASEBALL ,,,,, AGAIN……..

  25. comeonman - Nov 16, 2009 at 3:35 PM

    Big Game Andy WON ALL three game clinching victories, his salary
    $5.5 million…….
    When Damon stole second and third base his salary played no part,
    he was just a smart ballplayer.
    THE YANKEES ARE CHAMPIONS OF BASEBALL ,,,,, AGAIN……..

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