Contrary to popular perception, payroll in professional sports is not strongly linked to wins. A $100 million team does not win twice as many games as a $50 million team – not even close. Our own work has shown that only about 18% of a team’s regular season wins can be attributed to its payroll. In other words, more than 80% of a team’s regular season record cannot be tied to team spending. We would add that this is what we see when we look at teams in Major League Baseball from 1988 to 2005. In other words, the lack of a link between spending and wins is not a recent phenomenon. Across time more spending is not an elixir that leads automatically to success on the field. As the saying goes, games are not won on paper. Moreover, they are not won just because you spent a pile of paper.
Also, check out the site for the book. I received a copy of the book recently, and I have been loving it. Berri, Schmidt, and Brook do some of the most interesting work in the field of sports economics. I think the book is going to be a big hit, so pick up a copy of the book when it comes out in May. And look out for the authors’ blog, which is just getting started.