The LA Times Tells Us That Money Is Not Everything

Greg Johnson of the LA Times states in today’s edition that Seriously, Money Isn’t Everything (the article is free to read, but you do have to register first). Johnson observes that although playoff teams like the Yankees and Mets rank towards the top in baseball’s payroll rankings, other playoff teams like the Twins and A’s do not.

Having made this observation, Johnson then turns to the thoughts of three economists with some expertise in the study of sport:

Andrew Zimbalist – author of In the Best Interest of Baseball? and The Bottom Line: Observations and Arguments on the Sports Business, as well as other books.

Rodney Fort – author of Sports Economics, as well as other books.

Some guy named Berri (and hopefully you can see what I‘ve written).

The quotes we offered Johnson make an argument that readers of The Wages of Wins would find familiar. In Chapters Three and Four of our book we argue that there is a statistical relationship between pay and wins in baseball, but it not the case that payroll offers a great deal of predictive power. As we state in the book, the payroll-wins relationship lacks much oomph.

That basic point is clearly echoed in the Johnson article by the following quote from Zimbalist.

“If 20% of the variation in a team’s winning percentage can be explained by payroll, then there’s still 80% left over, which is a good-sized chunk,” said Smith College economist Andrew Zimbalist, author of “In The Best Interests of Baseball? The Revolutionary Reign of Bud Selig.

In the following few days the topics of competitive balance, payroll, and wins in baseball in 2006 will be discussed in this forum. A quick preview: What we have observed in 2006 is quite similar to what we report in The Wages of Wins.

– DJ