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Tuesday, April 20, 2010
Tango: The most efficient team in baseball

By Tom Tango, Inside The Book

Last week, I introduced a simple equation to determine the chances that a team will make the playoffs based on its payroll:

Chance of Playoffs = (Payroll Index / 2) - 23

For example, from 1998 through 2009, the Tampa Bay Rays had a Payroll Index that was 58 percent of the league average. The chance of them having a playoff-level team based on that payroll level is 6 percent. So over a 12-year period, we'd expect 0.72 playoff teams (.06 x 12) from them. (Like last time, we're using 89 wins as the barometer for a "playoff-level" performance.) The Rays had a playoff-level team once in that span. Therefore, we can say that the Rays made the playoffs about as much as we'd expect given how much they spent. But which team got the most playoff-level performances for its money?

If we apply this process for every team, we find that the Oakland Athletics had five more playoff-level performances than could be expected based on their payroll. Check out the complete list below:

Following the A's are the Twins, Angels, Indians and Red Sox, all at roughly three playoff-level seasons above expectations. The reason for their good showing is any combination of efficient player development, affordable acquisitions and good luck. We can characterize the total as an indicator of the quality of each team's front office, to some degree. While the A's, Indians and Red Sox are sabermetric-leaning teams, the Twins are not. The key component is how well information is processed, and not some singular philosophy. It's also worth noting that the Yankees performed above expectations, proving that their front office has some smarts to go with its bank account.

At the bottom of the group is the Baltimore Orioles, at four playoff-level seasons below expectations. While it may be tempting to simply call them the worst-managed team in the past 12 years, we still have to accept that they could have faced bad luck, as well as a tough division. This metric is not intended to cast an up or down vote on each team, but to give an additional perspective on their spending.

We can see why Cubs, Mets and Dodgers fans would be disappointed. Those teams spent a lot, so they had high expectations (around five playoff-level teams apiece), but they weren't fulfilled (three to four playoff teams each). In the end, the fans of these three teams expected a total of six more playoff-level teams than they actually got.

We can also flip things around by looking at what kind of payroll would generate a certain level of success. For example, for a team to have six playoff-level teams in 12 seasons (50 percent success), we would expect a Payroll Index of 146 percent. That is, if you plug in 146 percent into our simple equation, you end up with a 50 percent chance of making the postseason. The A's spent at 67 percent of the league average. If you use a \$90 million payroll as the league average, this would mean that the A's spent \$60 million (67 percent of 90) to get the success of a team that spent \$131 million (146 percent of 90). That means there was \$71 million of efficiency by the A's front office for each year for the past 12 seasons.

It's on this basis that Michael Lewis selected Billy Beane as the protagonist of "Moneyball." Lewis could just as easily have used former Twins GM Terry Ryan, because he had similar success before stepping down at the end of the 2007 season. Ryan used a more traditional approach to constructing a team, but still found a similar level of inefficiency in the marketplace.

Tom Tango writes the Inside The Book blog, and is a consultant for the Seattle Mariners and Toronto Blue Jays.