Low-Salary Rays Show Moneyball Still Works as Yankees Struggle

The $198 million Yankees are fighting to reach the American League playoffs against three teams -- Baltimore, Oakland and Tampa Bay -- who together are spending as much on players as New York.

While the injury-riddled Yankees are struggling and high- salaried teams such as the Philadelphia Phillies and Boston Red Sox have had disappointing seasons, several clubs with payrolls in the lower half of Major League Baseball’s 30 franchises are closing in on clinching postseason spots.

It is baseball’s annual version of “Moneyball,” the best- selling book and Academy Award-nominated movie about how the small-payroll 2002 Athletics used analytics to stay competitive with higher-spending teams.

“Chemistry is a big deal for small-market clubs,” Tampa Bay Rays pitcher James Shields said in an interview. “A lot of those guys on the Red Sox and Yankees that are paid a lot are veteran players. And sometimes you might not have good chemistry.”

Shields’s 2012 salary of $8 million makes him the highest- paid player on the Rays. On the Yankees, he would be the 10th- highest-paid player on the 25-man roster.

“Obviously, you have to have some good young talent and you have to be able to replenish that,” Shields, 30, said during batting practice before the Rays played at the Baltimore Orioles two nights ago.

The Yankees had the highest opening day payroll of any MLB team, according to USA Today, which since 1988 has been doing an annual survey of salaries based on information from MLB, clubs and the players’ union. The Phillies were second at $175 million, followed by the Red Sox at $173 million.

Cutting Payroll

New York heads into a weekend series at home against Tampa Bay tied with Baltimore atop the AL East division with 81-62 records.

Philadelphia (72-72) is third in the National League East and the Red Sox (64-80), who lost to the Yankees 2-0 last night, are in last place in the AL East.

The Phillies and Red Sox have cut payroll this summer. Philadelphia traded away outfielders Shane Victorino, 31, and Hunter Pence, 29, saving $20 million annually. Boston sent first baseman Adrian Gonzalez, 30; pitcher Josh Beckett, 32, and outfielder Carl Crawford, 31 -- the team’s three highest-paid players -- to the Los Angeles Dodgers as part of a nine-player deal.

“Here in New York and Philadelphia and Boston, the East Coast teams are so used to outspending everyone, but it may not be the best move for them,” Wayne McDonnell, an associate professor of sports management at New York University, said in a telephone interview. “Other teams are developing guys in their farm systems instead of buying them.”

Lower Payrolls

At the other end of the spectrum are teams such as the Rays, whose $64 million opening-day payroll ranked 25th among all clubs, and the Oakland Athletics, who were next to last with a $55 million payroll.

The Athletics head into the weekend atop the AL wild-card standings, while Tampa Bay is four games behind the Yankees and Orioles and four games back in the wild-card chase. The top two non-division winners in each league earn wild-card playoff spots.

Adding the Orioles’ $81 million opening day payroll to the Rays and A’s comes to about $200 million -- roughly the same as the Yankees.

Athletics owner Lew Wolff said in a telephone interview that it gives him an “acute sense of satisfaction” when he looks at the standings and sees his team ahead of much richer teams in the playoff hunt.

Wolff’s Satisfaction

“If we were spending more, I probably wouldn’t have the same sense of satisfaction,” he said with a laugh. “Spending more would not necessarily make us more competitive. Just because a guy is making 10 times as much as one of our guys, that doesn’t mean he’s 10 times better.”

Baltimore’s payroll ranked 19th among the 30 major league teams on opening day. A couple of other teams in the middle of the spending list -- the Cincinnati Reds (17th in payroll) and Washington Nationals (20th) -- have comfortable division leads.

The Reds are atop the NL Central, while the Nationals have the best record in baseball of 89-54 and lead the NL East by 8 1/2 games.

AL East

The Orioles have made their push in the AL East while cutting their 2012 payroll about $4 million from the opening day figure in 2011.

“It really comes down to the disciplined deployment of your resources,” Orioles General Manager Dan Duquette said in an interview. “I think that you have to know what the talent can do that you have in your system. That’s a key.”

The Rays are the most efficient spenders among the 122 franchises in the four major U.S. professional sports, according to a survey by Bloomberg Businessweek. The index of teams in MLB, the National Football League, the National Basketball Association and the National Hockey League found that Tampa Bay spent the least per win in the past five seasons.

Rays outfielder Sam Fuld said it has become more challenging for small-payroll clubs to find an advantage.

“I don’t think it’s any one thing,” Fuld, 30, a two-time All-American while studying economics at Stanford University, said in an interview. “They are continually looking to find market inefficiencies. Those are few and far between now.

‘Arbitrage Opportunities’

“The A’s certainly capitalized on arbitrage opportunities 10 years ago, but that gap has shrunk and leaguewide, teams are just more efficient, more aware of small ways that you can improve your organization, even the big-market teams like the Bostons and New Yorks.”

Things might be different at the top of the payroll chart next season.

The Dodgers, who were sold for a record $2.15 billion in March to a group led by NBA Hall of Fame member Magic Johnson and Guggenheim Partners Chief Executive Officer Mark Walter, have been spending freely since the purchase and probably will overtake the Yankees in 2013 with MLB’s biggest payroll.

While lower-payroll clubs often make the postseason, winning the World Series is another matter. Every championship team after the 2003 Florida Marlins has had a payroll in the top half of baseball; three clubs, the 2009 Yankees and the 2004 and 2007 Red Sox, were first or second.

McDonnell said the Kansas City Royals, who ranked 27th this season with a $61 million opening day payroll, might be ready to join the Rays and A’s as overachievers next season.

“I think 2013 is going to be the year they really make an emphatic statement that they are ready to be a contending ballclub, they’ve been stockpiling talent,” McDonnell said. “Patience is a virtue. Franchises realize they have to think of new and better ways to combat the payrolls of the Yankees and Red Sox.”

To contact the reporters on this story: Curtis Eichelberger in Washington ceichelberge@bloomberg.net; Rob Gloster in San Francisco at rgloster@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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