MLB Payrolls in the 21st Century

At the beginning of the 21st Century, the disparities between the big market and small market MLB teams only seemed to be getting larger. As this chart shows, the difference between the highest and the lowest payrolls in MLB has been about 3:1 throughout the century so far. Those teams in the middle, however, do seem to be making some ground and closing the gaps in payrolls in recent years.

Yankees at the Top

The first decade of the 21st Century saw the Yankees outspend every team in baseball. However, this has only brought them a single world series win, in 2009. In the last 10 years, other teams have outspent the Yankees, including the Dodgers and the Red Sox. One thing this chart tells us is that money doesn't necessarily buy championships.

Perhaps a better way to look at payrolls is in terms of return on investment (ROI). Other teams have spent much less than the Yankees and have had much more consistent success. The obvious example of this is the Oakland A's, who have been among the lowest spenders in the last 20 years, yet have been to the playoffs 10 times. Much of this success has been attributed to their Moneyball technique of building teams by focusing on the ROI of individual players and placing more value on metrics that have been ignored in the past. In the end, the teams that spend the least per win are the ones with the best ROI, and that is a chart that we will build next to see which teams are the leaders.

The Shortened 60 Game 2020 Season

Due to Covid, the 2020 season was an anomaly in this chart. The payrolls of almost every team went down by over 50% due to teams adjusting player salaries to account for only 60 games played rather than the normal 162. You can see the payrolls jump back up to normal in 2021, with the Dodgers being the big spenders this year.

Which Teams' Payrolls Vary the Most?

There are a few teams that you see jump up and down the list quite a bit in this chart. The ones that pop out are the Marlins, Rangers, and Diamondbacks. The Marlins are notorious for building winning teams with a relatively low payroll (usually younger players) and then trading them to other teams once they are worth more. It's a very efficient strategy, but it won't necessarily lead to many championships.