Moneyball, is the art of effectively managing a team’s finances (usually under a tight budget) in order to produce maximum results. This term was originally coined in Michael Lewis’s book Moneyball which was based off of the General Manager of the Oakland Athletics, Billy Bean.

Money Ball

While the term “moneyball” often refers to teams of limited resources such as the Oakland A’s and the Florida Marlins, just to name a few, what about the large market teams who have significantly altered the baseball market in a different direction?

When teams spend at will without repercussions they cause the balance in the league to shift. A good example of this was when Gary Matthews Jr. was signed to a $10 Million per year contract by the Los Angeles Angels. Is Matthews Jr. a $10 Million player? No, not even close, but the fact that a team was willing to pay him that much made him a $10 Million a year player. The point is, players are like stock, and as long as someone is willing to over pay for a player, they will then drive up the cost of all the other players in the league.

As long as there are teams that are not penalized for their excessive spending, the lower market teams will be unable to compete on the free agent market. It should be noted however that these lower market teams will be unable to compete on the free agent market, but these teams are still able to compete on the field.

This brings me to my final point, unlimited spending does not equal success. I know my readers are now thinking to themselves, so what is the point of this article then? The point is, as long as large market teams spend frivolously, the price of players will increase, small market teams will miss out, and the league will be inherently unbalanced.

This is a guest post written by Erik Eitel, the founder and owner of NumberOneBaseball.com

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One comment

  1. I agree that money doesn’t equal succes, we have seen some “moneyball” or lower payroll teams reach great success in recent years (ie Marlins 2005,Rays and Rockies being most recent). As a follower of the business side of baseball, I respect and look up more so to the Marlins and other lower payroll teams as opposed to the Yankees or Red Sox. Still Yankee fan at heart though.

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