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Moneyball in Major League Baseball - MLB Salaries on the Rise

Updated on June 27, 2011

What is Moneyball?

It’s not a ball made out of rubber bands and $100 bills. That would just be crazy! Derived from the 2003 book Moneyball: The Art of Winning an Unfair Game by Michael Lewis , the term Moneyball has solidified itself in the baseball lexicon as a way to describe a major league front office that uses an untraditional, analytical and overall cheaper approach to fielding a competitive MLB team.

Largely based on new developments in baseball statistics and rigorous college and high school scouting, Moneyball is not only a term but a strategy well suited for teams in small markets with low payrolls and has evolved since the book’s publication. Its popularity is soaring. Moneyball mania, if you will. Or won't. Either way.

Moneyball and Other Books by Michael Lewis

Money Makes the Sport Go 'Round, Don't You Know?

The inspiration for Moneyball is the direct result of the unbalanced financial hierarchy throughout the MLB. One of if not the largest criticisms of professional baseball is the lack of a league salary cap. MLB teams can spend as much as they like or are able in order to assemble a team, giving owners and organizations capable of spending more moola an unfair advantage in acquiring high-salary, talented players, hence the Moneyball subtitle, The Art of Winning an Unfair Game .

Typically this advantage is evident in teams located in larger markets with more revenue potential and better TV contracts. Cha-ching! For example, the New York Yankees play in the largest market in the USA and entered the 2010 season with a payroll of $206,333,389 compared to $162,747,333 for the second-place Boston Red Sox and $34,943,000 for the last-place, small-market Pittsburgh Pirates. That is a difference of over $170,000,00 and nearly six times larger.

2010 marked the 10th straight season that the Yankees had the highest payroll in baseball and not coincidentally the 9th season in that stretch in which they made the playoffs. In comparison, the Pittsburgh Pirates have not been in the MLB playoffs since 1992 or the World Series since 1979. The Yankees and Red Sox have won two of the last four World Series with the other two being won by the Philadelphia Phillies and San Francisco Giants who both have salaries in the top 10 in baseball.

While revenue sharing has come into play in recent years, most small-market teams simply cannot match the contract offers or appeal of joining a perennial winner and large media market. Money talks, really, really loud. Like Mr. Ed with an amplifier.

Billy Beane


Moneyball to the Rescue!

In order for small-market teams like the Pittsburgh Pirates, Cleveland Indians, Arizona Diamondbacks or the Oakland Athletics (the inspiration for Moneyball) to swim in the harsh economic waters of the MLB they have to be creative. Financial floaties for all!

In Moneyball, Michael M. Lewis shadows Billy Beane, the Oakland Athletics General Manager, as he refocuses the team’s priorities from scouting speed, power and contact to less traditional measures of success. Rather than targeting costly players able to hit for average or steal bases, Beane searches for players strong in the fundamentals of baseball and those with a high on-base percentage (OBP) and slugging percentage (SLG), two of the key statistics in sabermetrics.

According to Bill James, a pioneer in ranking a baseball player’s worth, sabermetrics is “the search for objective knowledge about baseball.” Essentially sabermetrics values baseball statistics that most directly relate to runs, which lead to wins, and has deemed both OBP and SLG as key factors in run production (later the stats on-base plus slugging (OPS) would be created to measure the two in conjunction). Moneyball is closely related to sabermetrics due to the relatively cheap salaries of players capable of producing a high OBP compared to power hitters or base stealers.

The Results of Moneyball

By implementing Moneyball in the 2002 season, Billy Beane and the Oakland Athletics were able to win 103 games and the American League West. Besides the small-market Athletics, the Atlanta Braves and New York Yankees were the only team to surpass the 100-win total. In that same year, Miguel Tejada and Barry Zito won the AL MVP Award and AL Cy Young Award (respectively) playing for Oakland.

The effect of Moneyball and sabermetrics received immediate notice and recently teams like the St. Louis Cardinals, Washington Nationals and Toronto Blue Jays have hired in-house sabermetric analysts. Not considered a small-market team, the Boston Red Sox have hired Bill James himself. But hey, if Moneyball works, it works.

The book has enjoyed mainstream success not only to baseball fans, but to all readers, thanks to the larger-than-life characters and a Moneyball movie is due to be released in 2011. Some of the actors include Jonah Hill (Get Him to the Greek), Philip Seymour Hoffman (Doubt) and Brad Pitt as Billy Beane.

The Making of the Moneyball Movie


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    • bogerk profile image

      bogerk 7 years ago from Midwest

      I just finished reading it myself. It's a great book for any baseball fan.

    • James A Watkins profile image

      James A Watkins 7 years ago from Chicago

      I have this book. I read it and I love it! Truly fascinating. Of course, I have been a statistics nut since I was a boy. It is how I learned to do mathematics in my head. Highly recommended for any youngster. Thanks for the good read.