All Hail the Little Guy

Granted it is all relative – no Major League Baseball Team can really be labeled a ‘little guy.’ But, comparatively speaking there is a significant discrepancy between the affluent (New York Yankees – payroll $210 million) and the poor (Florida Marlins – payroll $22 million) in a league with a soft salary cap. Given this, baseball more than other sports, is representative of Canadian society, with a bell shaped economic distribution curve.

That being said, let’s look at the relative performance of teams and determine how the little guy (so to speak) faired.

How Much is a Win Worth?

Well that’s hard to say, since a victory in April isn’t nearly as valuable as a ‘W’ in September if you are battling for a playoff berth. But, what Maury Brown of Biz of Baseball found, is that you can measure the relative cost of a marginal win.

The top 5 teams in terms of Cost per Marginal Win, and their respective economic ranking (1 being lowest payroll):

1. Florida – $0.31M (1)

2. Tampa Bay – $0.68M (2)

3. Minnesota – $1.31M (7)

4. Oakland – #1.39M (3)

5. Arizona – $1.66M (8)

It should be noted that while the A’s were efficient, they didn’t win enough games to contend for the playoffs – the ultimate goal. But all 4 other teams did – especially Tampa #2 and Philly # 9, who just finished battling it out in the World Series.

…and for those of you wondering who the worst is. Well, that would be Seattle (by a mile) with a cost of over $8.6 million per marginal win.

So perhaps there is a bright future to those struggling with debt. We just need to understand our situation better and manage to it. What is your Cost per Revenue ratio? If it’s over 1 and you can’t increase your income, it’s time pare back unnecessary expenses. Think like the Seattle Mariners going into this off-season.

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