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Monday, October 19, 2009

Angels baseball beats Yankees baseball 5-4: battle of payrolls

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Angels win was a Money-ball story

The old saying: the more things change the more they stay the same. The Los Angeles Angels beat the New York Yankees 5-4 today in the AL Championship Series. They're back 2 games to one and could make a real game of it with another win.

But don't make the mistake of thinking that it was David beating Goliath, where the New York Yankees monster payroll was clobbered by the miserly fiscal practices of the Angels.


The truth is that the 2009 player expeditures for both teams are not far off. The Yankees payroll was between $192 million and $201 million this year; the Angels payroll was at $113 million.

Both teams are part of the top six highest payrolls in Major League Baseball, proving that it takes money to win, even in this post-Moneyball era. This was supposed to be the time when the Internet and sabermetrics created a baseball team that could consistently when with a low payroll.

But the reality in 2009 is the same as it was in 1993 and in 2002 when I created the Oakland Baseball Simworld in partnership with Forio Business Simulations, and 2003 when University of San Francisco Professor Dan Rascher and I founded Sports Business Simulations.

Payroll rules.

Our simulation was and is designed to reflect both the "Moneyball" approach and the more common "Pay-To-Win" strategy, but it's the latter that's hard to beat.

In fact, Smith college Sports Economist Andrew Zimbalist (who's also a member of our simulation advisory board) determined that after 1990 there was a more powerful correlation between higher payrolls and team performance.

I tried for years to make a team "work" in the context of the current Oakland Coliseum using the Oakland Baseball Simworld (which I developed from scratch for the purpose of teaching marketing, business, and sports finance in high school and college classrooms and is based on my work at the City of Oakland). It's hard to achieve the 250 and up score that indicates baseball business success.

The only answer is to build a new stadium. Location aside - Oakland's better - it's the best tonic to turn any Oakland-based baseball team into a winner, including the one currently called The Oakland Athletics.

Meanwhile, the Yankees and Angels will keep being in the hunt for the World Series. Some things never change.

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