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Postby Pirates4Life » Mon Dec 18, 2006 8:21 pm

noseeum wrote:
Pirates4Life wrote:In some ways, you're right. In others, not so much.

Payroll is a choice, but each team has a limit as to what they can spend that's dependent on how much revenue they generate.

If the Yankees generate $350 million in revenue and the Pirates generate $150 million (just throwing the numbers out there), it's unreasonable to expect both teams to spend the same amount on payroll. The Yankees have the payroll they have not because of Steinbrenner's wealth, but because of the amount of revenue they have at their disposal.


But by that logic, you'd be in a downward spiral. When your team stinks, your revenue goes down. If you continually cut spending as revenue drops, you'll be toast. You have to spend money to make money, so to speak. Make the right investments that will pay off.

Look at Ford. They're willing to lose BILLIONS a year to stay in the market. Insanely enough, that probably makes business sense for them in the long run.


Well, you have to make money to spend it. Owners don't dip into their own pockets to support their teams' payrolls.

I'm not saying that no money should be spent at the major league level, just that a lower revenue team HAS to spend more developing young talent so it all comes together for a short run. Then the players sign big contracts elsewhere when they can, or they're dealt for prospects and the cycle starts over. The good franchises consistently produce quality minor league talent so the major league roster stays strong. A large revenue doesn't have to do that, because they can spend enough money to just reload at the major league level.
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Postby GotowarMissAgnes » Mon Dec 18, 2006 8:54 pm

Pirates4Life wrote:
GotowarMissAgnes wrote:
Pirates4Life wrote:And the big market teams will continue to point to the A's and Twins as proof that it can be done without acknowledging that only 5 of the past 48 playoff teams have had payrolls in the bottom third of the league.


If you lay out $10,000 you expect to get a brand new Mercedes?

Why would we expect teams that refuse to compete to be competitive?

The payroll is a CHOICE the GM and owner make, not a good measure of their market.


In some ways, you're right. In others, not so much.

Payroll is a choice, but each team has a limit as to what they can spend that's dependent on how much revenue they generate.

If the Yankees generate $350 million in revenue and the Pirates generate $150 million (just throwing the numbers out there), it's unreasonable to expect both teams to spend the same amount on payroll. The Yankees have the payroll they have not because of Steinbrenner's wealth, but because of the amount of revenue they have at their disposal.


Not exactly. See the discussion "Evil Empire" thread.

Your revenue generation is also under your significant control. What's not under your control is your market.

And nobody disagrees that the Yanks have a market advantage. But, the market advantage should not obscure that the facts show the market only explains less than 20 percent of the variation in wins.

What kind of revenue you generate out of that market potential, the decisions you make on how much of that revenue to spend on payroll, and the decision you make on which players to spend it on and how they generate wins, are also part of the explanation. And those can be huge determinants of your wins. We don't know how much, but we do know that market only explains less than one-fifth.
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