Player Salaries, Organizational Efficiency, and Competitiveness in Major League Baseball

Abstract

The dramatic growth of free agency in Major League Baseball has caused great concern about the competitiveness of some teams, particularly those in smaller markets. The authors use a two-stage data envelopment analysis model as part of a larger analysis to determine the minimum total player salary required to be competitive in each nonstrike year since 1985. They then examine trends in this salary and determine how many teams were noncompetitive each year because of low total player salary. Finally, they examine the relationship between competitiveness and market size. The authors find evidence that the number of times that a team has been noncompetitive because of low total player salary between 1985 and 2002 is negatively related to the size of the market in which it plays. The authors also find that large market teams are more likely to overspend on player salaries than are small market teams.

Measuring the Productivity of Spanish First Division Soccer Teams

“…For example, Mazur (1994), Anderson and Sharp (1997), Sueyoshi, Ohnishi, and Kinase (1999), Lewis and Sexton (2004) and Lewis, Sexton, and Lock (2007) focused on baseball, whilst Zak, Huang, and Siegfried (1979), Fizel and D'Itri (1997) and Hofler and Payne (1997) all considered the evaluation of the efficiency of basketball teams. There are also many works that deal with the efficiency of soccer teams, including Dawson, Dobson, and Gerrard (2000a, b), Haas (2003a,b), Haas, Kocher, and Sutter (2004), García-Cebriá n (2004, 2006), Boscà , Liern, Martínez, andSala (2006) andGuzmá n (2006).…”

“…Among the already mentioned works that used the former are those of Mazur (1994), Anderson and Sharp (1997), Fizel and D'Itri (1997), Sueyoshi et al (1999), Haas (2003a, b), Haas et al (2004), Fried et al (2004), Lewis and Sexton (2004), García-Cebriá n (2004, 2006), Boscà et al (2006), Guzmá n (2006 and Lewis et al (2007). Hofler and Payne (1997) and Dawson et al (2000a, b) used stochastic frontiers.…”

Debating Immortality: Application of Data Envelopment Analysis to Voting for the Baseball Hall of Fame

“…Although DEA has not been previously applied to HOF voting, it has been employed extensively in the analysis of Major League Baseball (MLB). For example, it has been used by Volz () to analyze MLB manager performance, by Lewis, Sexton, and Lock () in an examination of the competitiveness of MLB teams, and by Einolf () to analyze the efficiency of MLB and National Football League teams.…”

Negotiating Salaries through Quantile Regression

“…Numerous researchers have developed models for the salaries of major league ballplayers (Hakes and Turner, 2007;Lewis et al, 2007;Einolf, 2004;Yilmaz and Chatterjee, 2003;Krautmann and Oppenheimer, 2002;and Lackritz, 1999). Further, in 1988, the Section of Statistical Graphics of the American Statistical Association made available salary data for 439 MLB players, along with various career and 1986 performance statistics, and asked members to analyze the data in order to answer the question: "Are players paid according to their performance?"…”