Baseball Econ (Originally posted 2010)

When Spring training begins in March there will certainly be a buzz in the Valley of the Sun.  As the teams from around the nation come to Phoenix to being the season a sense of hope is flowing in the air.  However this is only for a few teams.  The payroll discrepancy in Major League Baseball is so large that the New York Yankees had an opening day (2010) payroll of $206,333,389.  That is nearly six times the total payroll of the Pittsburgh Pirates $34,943,000.  Mean while in the National Football League the difference is much closer.  In 2009 the NY Giants had a team payroll of $137,638,866 which was just over double the payroll of the St. Louis Rams $62,384,821. 

The New York Yankees are a fixture in the post season while the Pittsburgh Pirates have not had a winning record was in 1992 when they lost in the NLCS to the Atlanta Braves.  1992 was also the last season that Barry Bonds played with the Pirates until he signed as a free agent with the San Francisco Giants. 

The St. Louis Rams are currently only one game out of first place in their division (granted it is the NFC West where every team has been outscored on the season).  One season removed from having the lowest payroll they are now in playoff contention.

The structure of the NFL gives every team a chance to compete.  If a team has a bad year they can still hope toward next season.  In MLB the same teams reach the post-season each year.  Smaller market clubs with limited resources have a tremendous amount of pressure to win now.  In 1992 the Pirates had their star and MVP but they needed to win at that time because they could not afford to keep high priced talent.  The system forces a small market team to mortgage their future by trading talent from the minor leagues in order to surround a young star with veterans in a (often futile) attempt at a world Series appearance.  Subsequently, when said small market team fails they are locked into a cycle of selling their high priced talent for minor league players that may or may not even make it to a Big League roster.

When Spring Training begins a handful of teams will have their sights on a World Series.  The remaining teams will be wondering which one of their stars will end up playing for the Yankees after the All-Star break.