Fangraphs: 2012 Payroll and Wins

Regarding the ongoing payroll/rebuild debate (and I know, here we go again), I'm just throwing this Fangraphs article out there as containing some data relevant to the discussion. To summarize this season's results:

The best teams in baseball this year are essentially evenly distributed throughout the payroll spectrum, with the only real advantage conferred by having a higher payroll being the avoidance of an Astros-style collapse.

Not to mention the Cubs. But this is even more sobering:

The ten highest payroll teams essentially paid an extra $74 million per team over the bottom tier spenders, for a net benefit of 10 extra wins apiece, which shows that there is real value in spending money. However, they outspent the middle tier teams by $52 million for a net of only two extra wins, showing some real diminishing returns on higher payroll levels beyond the league average. Essentially, the data is showing that the money spent that got a team out of the bottom tier of wins helped avoid being one of the very worst teams in the league, but for this year at least, additional money spent on top of a league average payroll had very little effect on a team’s overall record.

Takeway being, we can spend a lot of money in the offseason, but the chances of higher payroll alone putting us into contention are likely slim. The payoff:

[T]he evidence is pretty striking – even in an era of expanding television contracts and ever-growing payrolls at the high end of the spectrum, you simply cannot determine which teams are going to be competitive simply by looking at money spent on the Major League roster. There are still inefficiencies to be exploited and ways to create value beyond simply chasing the shiny new toy being auctioned off at the winter meetings.

Now, this season's results have been a bit of an outlier (you have to go back to collusion to find the same level of parity in MLB). But at the end of the day, the name of the game isn't how much money can you spend, but how much talent can you acquire. Some teams do a better job than others of acquiring/developing/retaining cheap talent. Others do a better job of picking the right free agents to spend on. Some can afford to spend there way out of mistakes, while others are seeing the results of having a bloated payroll and aging veterans. The Cubs should be able to do a mix of both acquiring/developing cheap talent and signing big free agents, but right now they are in the mode of simply acquiring as much young talent as possible to position themselves for a sustainable run of success.

Realistically though, the choice for this offseason is probably between (a) spending a lot of money just to get back to respectability (70-75 wins), or (b) seeking out buy-low guys like Paul Maholm, letting the young guys play and develop, and bank another high draft pick in 2014.

This is a FanPost and does not necessarily reflect the views of SB Nation or Al Yellon, managing editor (unless it's a FanPost posted by Al). FanPost opinions are valued expressions of opinion by passionate and knowledgeable baseball fans.

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