Thoughts on the economics of buying the World Series

When the Yankees won the World Series two weeks ago, the team set a rather dubious record. No longer were the 2007 Boston Red Sox the most expensive team ever to win baseball’s championship. With an estimated payroll around the $201 million mark, the 2009 Yankees shattered the previous record by nearly $60 million.

Of course, with these numbers as irrefutable proof of some devious Yankee scheme to take over baseball, analysts and fans outside of the city have accused the Yankees of buying a World Series championship. The economics of baseball, they say, are broken, and the Yankees are the prime example of it. In New York, we finger teams such as the Marlins ($36 million) who pocket nearly as much in revenue sharing as they pay their team as the real economic villains of baseball, but that just might be wishful thinking.

So for the first post in a series I plan to unveil as the off-season goes on, let’s explore the Yankees’ spending. In an article in the Wall Street Journal, sports economist and Smith University professor Andrew Zimbalist states that the Yankees did not buy a World Series. Noting that 20 of baseball’s 30 teams have made the playoffs since 2004, Zimbalist says that payroll accounts for only approximately 15-30 percent of a team’s success. The other factors, he writes, “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.” Many of those factors are related to wealth, but more on that later this off-season.

Even if the Yankees’ payroll helped them this year, Zimbalist says, it might handicap them in the future:

Imperfect though it may be, baseball has a system, and the Yankees play by its rules. Its success this year depended significantly on the acquisition of pitchers A.J. Burnett and C.C. Sabathia, along with first baseman Mark Teixeira. But the Yankees did not sign these players to one-year contracts (though the team did sign pitcher Andy Pettitte to a one-year deal).

Mr. Sabathia was great in 2009, but he is signed through 2015 when he will be 36 years old; Mr. Burnett through 2013 when he’ll be 36; and Mr. Teixeira through 2016 when he’ll be 37. Many of the team’s other stars are also signed to long-term contracts. Third baseman Alex Rodriguez is signed through 2017 when he will be 42 and catcher Jorge Posada through 2011 when he’ll be 40.

It’s possible that the positive correlation between payroll and success the Yankees experienced this year will turn into an inverse correlation. After all, player performance tends to wane with age. But these players have contracts that require the Yankees to increase their annual pay in the years ahead. Those salaries will weigh on the team’s ability to acquire other players.

As you chew on those statements and the aging horrors that may await us, take a peek at this rough sketch of reinvestment strategies among baseball teams. Khoi Vinh of the blog Subtraction has explored the way baseball teams in 2009 reinvested their 2008 earnings on the field and found that the Yanks’ reinvestment rates were near the top and that, especially in the playoffs, reinvestment rates determined success (and winning percentage). Of the eight playoff teams, none reinvested a larger percent of their earnings than the Yankees did, and no other team, obviously, reached that 11-win mark.

And so I leave you with some initial thoughts. Maybe the Yankees’ spending came as close to guaranteeing a World Series win as is possible within the framework of baseball’s economics, but the team may pay a price for it later. Furthermore, the Yanks are simply playing by the rules of the economic game, and if the rest of baseball thinks it is broken, they will have to fix it. For decades, though, baseball has tried to bring down the Yankees, and nothing has succeeded. I wouldn’t put money on an economic sea change any time soon.

Winter ball in Puerto Rico begins

As usual, the Arizona Fall League was off today since it’s a Sunday. The regular season ends on Thursday, and Surprise is buried in last place thanks to the second worst run differential (-21) in the league.

Here’s the winter ball updates…

Dominican Winter League
Abe Almonte: 7 G, 1 for 5 (.200), 3 R, 2 RBI, 1 BB, 2 K, 1 SB
Juan Miranda: 4 G, 5 for 13 (.385), 3 R, 1 2B, 1 HR, 4 RBI, 2 BB, 2 K, 1 SB – check out Mr. Miranda with the steal
Eduardo Nunez: 1 G, 1 for 3 (.333), 1 R, 1 BB
Wilkins Arias: 12 G, 9.1 IP, 6 H, 6 R, 6 ER, 3 BB, 8 K
Ivan Nova: 5 G, 4 GS, 25.2 IP, 17 H, 3 R, 3 ER, 4 BB, 17 K - studly
Jon Ortiz: 6 G, 4 IP, 4 H, 0 R, 0 ER, 1 BB, 3 K
Jose Valdez: 11 G, 12 IP, 7 H, 2 R, 2 ER, 0 BB, 7 K

Mexican Pacific League
Walt Ibarra: 19 G, 11 for 36 (.306), 7 R, 1 2B, 4 R, 2 BB, 12 K, 1 SB
Jorge Vazquez: 4 R, 3 for 15 (.200), 1 R, 1 2B, 1 HR, 4 RBI, 1 BB, 5 K – good to see him back from his shoulder injury and terrorizing pitchers again
Humberto Sanchez: 6 G, 7.1 IP, 11 H, 8 R, 7 ER, 7 BB, 5 K – eek

Venezuelan Winter League
Reegie Corona: 18 G, 13 for 40 (.325), 10 R, 5 2B, 6 RBI, 8 BB, 7 K, 1 SB
Edwar Gonzalez: 21 G, 18 for 63 (.286), 9 R, 2 2B, 2 3B, 1 HR, 9 RBI, 4 BB, 11 K, 3 SB, 3 CS
Carlos Mendoza: 3 G, 0 for 3, 3 K – fail
Jesus Montero: 9 G, 3 for 26 (.115), 2 R, 1 RBI, 3 BB, 4 K – he hasn’t played in about three weeks, though I suspect it’s nothing major … they play to win in these leagues, and if you’re not doing the job, you’ll sit
Luis Nunez: 11 G, 8 for 32 (.250), 1 2B, 6 RBI, 2 BB, 4 K – on-base ten times in 11 games and you don’t score a run? weak
Marcos Vechionacci: 15 G, 12 for 42 (.286), 5 R, 3 2B, 1 3B, 6 RBI, 4 BB, 9 K, 1 CS
Romulo Sanchez: 13 G, 16.1 IP, 10 H, 9 R, 6 ER, 8 BB, 22 K – he’s settled down after the bad start … love the K’s
Josh Schmidt: 8 G, 6 GS, 28.1 IP, 28 H, 20 R, 14 ER, 10 BB, 24 K
Pat Venditte: 7 G, 9.1 IP, 11 H, 6 R, 5 ER, 3 BB, 7 K - he’s gotten batters to ground into 4 double plays in those 9.1 IP, so he’s getting a little lucky
Eric Wordekemper: 3 G, 1 GS, 4.1 IP, 9 H, 9 R, 8 ER, 3 BB, 0 K

Puerto Rican League
Amaury Sanit: 1 G, 1.1 IP, 1 H, 0 R, 0 ER, 1 BB, 0 K

Soon to be ex-Yankee Jose Molina is also playing in the PRL, though he hasn’t gotten into a game yet.

Open Thread: Improving RAB

No cheesy, throw away open thread topic tonight. Sorry. Instead, we want to ask you for suggestions on how to improve the whole RAB experience.

We already have a ton of ideas ranging from mundane to major overhaul that we’re going to pursue this winter, but we feel it’s important that you guys, the readers, have some input. Do you want to see more statistical analysis? What about less? More long features, or more short blurbs? What about the game threads, any ideas for improving the flow of those guys? Paginated comments perhaps? What about comment registration? Whatever you think can be done to make this place better than it already is, let us know. We’ll review and consider everything.

Leave any suggestions in the comments, otherwise use this as your open thread for the night. The Sunday night game is a good one – the Patriots at the Colts. Go Peyton. Talk about whatever you like, just make sure you follow the guidelines and be cool.

Does Granderson make sense for the Yankees?

Steve at TYU takes a look at Curtis Granderson to see if he’s really a fit for the Yanks. Granderson’s lefty pop would fit nicely in the Stadium, but as Steve notes, he should start taking the ball back up the middle to get back to his offensive levels of a few years ago. Remember, Jason Giambi had a similar problem: he had to go to all fields in Oakland because of the park, but once he got to NY he started trying to pull everything, which dropped his overall production.

Anyway, Steve says there’s a fit for the Yanks if the price is right, which pretty much holds true for every player in the game. It’s good stuff, so make sure you head over and give it a read.

Football Open Thread

The Giants are on bye this week, but the Jets take on the Jacksonville Jones-Drews at home at 1pm ET. Talk about any game you want, just keep your football comments in this post.

Market looks bare for free agent setup men

On his Touching Base blog, the Daily News’s Jesse Spector takes a look at the free agent class of setup men. With the possibility that both Joba Chamberlain and Phil Hughes start the season in the rotation, the Yanks are going to need someone to pitch the late innings. Judging by Spector’s list, which goes into the arbitration status of each player, the Yanks will probably favor internal candidates. There aren’t any truly elite setup men in the class (or else they’d probably market themselves as closer), but their 2009 salaries were a bit more than you’d want to pay for a middle reliever.

Spector lists five players among those whose teams will likely offer them arbitration. Those include Type A’s Darren Oliver, Rafael Betancourt, and John Grabow. Of them, only Betancourt seems remotely worth the money, and his value is likely overrated now because of his stellar second half in Colorado. He’s had great seasons beofre, but he’s also turned in clunkers — most recently in 2008, when he posted a 5.07 ERA over 71 innings. With the contract he’ll want, plus the first-round pick he’ll cost, I think the Yanks will stay away.

Among the players who will likely not cost a compensation pick (i.e., their teams will not offer them arbitration in all likelihood), there still aren’t any standout names. Octavio Dotel and LaTroy Hawkins top the list, and we all know how each of their stints in pinstripes went. Otherwise, none of the listed pitchers will be worth the salary, especially when there are comparable options in the system.

Given the dearth of relief pitching on the market, and given the volatile nature of relieving in general, I think the Yanks will do best to stick with the options in the system. This might mean that Phil Hughes or Joba Chamberlain pitches out of the bullpen for a portion of 2010. Readers know that I don’t favor such a solution, but I’d rather do that for a year than sign a free agent to set up. Obviously, the ideal solution is for the guys already on the roster — mostly Robertson, but also Melancon and Bruney — to step up and take the late innings. They’re the Yanks best shot.

Stadium demolition permit approved

That photo — that heartbreaking shot inside of the House that Ruth Built — is the latest from Tom Kaminski in Chopper 88. The WCBS AM man in the sky flew over Yankee Stadium this week and snapped some shots of the crews hard at work. The stadium is slowly emptying out, and in a few months, it will start to come down.

Meanwhile, New York 1 featured a story yesterday about the wait in the South Bronx for the parks. I’ve covered this angle of the new stadium extensively, and the New York 1 story focuses on community resentment. The destruction of the stadium will be complete by the summer, and the replacement parks will open in 2011. Although neighborhood activists are still upset, this timeline has been in place for the last 18 months. Still, the South Bronx will have suffered through five years without adequate parkland, and the Yanks will be starting their third season in the new stadium when the parks finally open.

Finally, the destruction of the building is an official fait accompli. Two weeks ago, the Department of Buildings approved the full demolition certificate for the old stadium. If bureaucratic paperwork is your thing, take a peak at the filings. We’ll have more on the old and new stadium as we continue to wrap up the 2009 season over the next few weeks.