The Orioles and Tampa Bay Rays each fielded full lineups Wednesday that will be paid less this year than several players on the New York Yankees. Their payrolls haven’t mattered, though. The two thrifty teams have the highest win totals in the American League.
Baltimore’s 10 starters in included its highest-paid player, pitcher Kyle Gibson, but their entire lineup combined to total less in payroll than Yankee superstars Aaron Judge, Gerrit Cole and Giancarlo Stanton are each paid individually in 2023.
Baltimore (91-54) and Tampa Bay (90-57) have piled up victories this season — they’re the only AL teams with 90 wins — with prudent budgets. The teams rank , according to Spotrac, but have the second- and third-best records in baseball. The Toronto Blue Jays, Boston Red Sox and Yankees have spent more on players this year, but all sit below the Orioles and Rays in the AL East standings.
The two clubs will face off beginning Thursday in what is one of the Orioles’ most important series in years: Baltimore, which has won the AL East once in the past 25 years, leads the second-place Rays by two games with less than three weeks to play.
Over the past 10 full MLB seasons, teams with bottom-five payrolls have, on average, posted the 19th-best record of the league’s 30 teams. The Rays and Orioles, however, are both on pace to make the playoffs. If they do, it would mark the first time in a decade that two teams ranked in the bottom five of payroll have advanced to the postseason.
The Rays are pros at succeeding beyond their means, a modern-day version of “Moneyball” — the book and movie based upon the Oakland Athletics’ success on the cheap in the late 1990s and early 2000s. For the Orioles — who have spent $71 million on payroll this year, according to Spotrac, compared with the MLB average of $165 million — their winning ways on a budget are a product of the nascent years following a successful rebuild.
Baltimore spent little on payroll during its four-year rebuild. Now, however, its dugout is full of top-shelf players within the first six years of their MLB careers who have not yet reached free agency nor their market-earning potential.
“I wouldn’t necessarily say it’s like we’re performing with lesser players,” Orioles backup catcher James McCann said. “I think it’s just a testament to what this team has done in terms of picking up guys off of waivers and drafting and developing really, really talented players.”
The Orioles added veteran contributors such as McCann and outfielder Aaron Hicks, whose salaries are largely being paid by other teams, to complement former top prospects now in their rookie or second seasons. Baltimore’s top three performers according to FanGraphs’ Wins Above Replacement metric — Gunnar Henderson, Adley Rutschman and Kyle Bradish — all earn the MLB minimum of less than $1 million, a bargain for their services.
And while that isn’t sustainable, since young players will age into higher contracts, for now the Orioles are excelling on a budget.
Unlike the NBA and NFL, which have salary caps, MLB has a more capitalistic approach, resulting in disparate payrolls. MLB’s highest-paid team, the New York Mets, has a payroll of $344 million — roughly six times more than the Athletics’ league-low $58 million.
Still, David Berri, an economics professor at Southern Utah University who wrote the book “Sports Economics,” said it isn’t that strange to see teams with low payrolls atop the league. Although free-spending teams in baseball have an advantage, there is not an overwhelming correlation between dollars and wins.
Berri’s research found that from 1988 to 2022, a team’s payroll — compared with the league average — can explain 16% of the variation in wins. The other 84%, however, is not tied to payroll, but rather other factors, such as luck and the unpredictable nature of baseball. That helps explain why the Mets have a record well below .500 despite ample spending.
There are two approaches clubs can take toward fielding competitive teams, Berri said. A team can operate with cash — purchasing the services of expensive, but established free agents — or they can focus on acquiring another form of capital: prospects. The latter enables teams to benefit from young players paid below market value.
“There is some advantage to pursuing free agents versus pursuing prospects,” Berri said. “But it’s not a huge advantage. It doesn’t guarantee you anything.”
Few sportsbooks and national baseball observers expected the Orioles to compete for the AL pennant this season and yet, chock full of talent, if not big contracts, that’s exactly what Baltimore is doing.
“When you put together a season like this team has put together so far, I mean, it’s impressive regardless,” said McCann, who has also played for the Detroit Tigers, Chicago White Sox and Mets.
The Orioles won’t be able to keep their current roster at the same price point going forward as their composition of players will only become more expensive. They’re prepared for that, though: Orioles executive vice president and general manager in the coming years.
That doesn’t necessarily mean all of the team’s young stars will stay in Baltimore. Orioles Chairman and published last month that would be unlikely. Although other teams have been able to sign homegrown talent to long-term contracts, Angelos said the only way to keep all of the young talent would be to “dramatically” increase ticket prices for fans.
“The interesting thing for the Orioles is going to be: Once these prospects age out, what decision are they going to make?” Berri said. “Are they going to keep the team together and try to win? If you do that, you’re going to have to pay those players — they’re going to get paid by somebody — or, are you going to keep doing the prospect thing?”
But that’s a question for another day.
Today, the Orioles are locked in a September battle with the Rays for the division title — while their higher-spending peers watch from below.
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