Baseball is my favorite sport. And I am becoming increasingly convinced that money makes the world go round. So it would make sense that I was drawn to a CNNMoney article about how the Yankee’s were the most effecient team with their money this year.
According to the article, the Yanks had a net income of $69 million (this is only after paying player’s salaries and the luxary tax, however). The payroll efficiency metric used in the article claimed that the Yankees paid $3.2 million per marginal victory, defined as every victory after the 49th. Next in line were the Red Sox, with $5.2 million per marginal victory.
I would be intrigued to find out how much the post-season games helped with this statistic. It certainly would have helped the Red Sox with their ROI. Because the more games you play, the less per game you’re going to pay. I think a better measure might be just regular season games.
Although its intrigueing to see how the merging of efficiency and effectiveness works. Earlier this year, my management professor used the example of the Denver Broncos as an example of both. The team was efficient under its original owners, who solicited donations for everything and tried to put as little money as possible into the team. They lost a lot and weren’t generating any income. New owners took over, pouring money into the team. The Broncos started winning, generating money for the owners, so they were effective, but far from efficient. This was supposed to drive home the point that its best to be both effective and efficient, but if you can only be one, it better be effective.
It’s hard to believe that the team with the largest payroll can still be the most efficient. It certainly undermines the point made by the book Moneyball by Michael Lewis. But then again, it all just proves the point: money makes the world go round.