Top 5 Baseball Picks: Winning Strategies
in Strategy & Trends | by David Capece
In 2008, the Yankees led the baseball world with a payroll of $209 million and 11 teams had a payroll of $100 million or more. The World Series Champion Philadelphia Phillies were #13 of 30 teams on the list and they defeated the Tampa Bay Rays who were next to last in payroll at $44 million. While you can certainly try to spend your way to success, that doesn’t always work. It is more important than ever to get maximum impact from every dollar you spend. Sports teams are trying to do more with less, and make their money go further. So should you.
As the baseball season gets underway, here are the top 5 small market baseball teams and some tricks you can learn from them.
1. Tampa Bay Rays ($60 million in 2009, vs. $44 million in 2008): The runner-up in 2008, they return with another strong ball club that was built on scouting great talent and making shrewd decisions. The front office is led by former Wall Streeters who can spot great value. Plus, since they were the worst team in baseball for so long, they stockpiled lots of top draft choices that landed them talents such as BJ Upton and David Price. While the Yankees are spending over $200 million, and the Red Sox are closing in on $150 million, the Rays will be competing down to the wire on $60 million.
2. Arizona Diamondbacks ($74 million in 2009 vs. $66 million in 2008): The Diamondbacks have gone young and stuck with it. They have retained their home grown stars and avoided paying for high priced talent. Sometimes growing from within is the best policy, and the Diamondbacks, like the Rays, have a great nucleus. They benefit from playing in a less competitive division which had the weakest division winner (LA Dodgers) in 2008.
3. Milwaukee Brewers ($81 million in 2009 vs. $81 million in 2008): A year after winning the National League Wild Card, the Brewers are back and hoping to go deeper into October. Like the Rays, the Brewers have focused on building an outstanding young core of talent. Each year their respected front office adds another piece to the puzzle. They combine a long-term approach with a willingness to make transformational moves such as last year’s Sabathia acquisition.
4. Cleveland Indians ($83 million in 2009 vs. $79 million in 2008): While others are spending major dollars on the big names, the Indians are making small risks with big upside that pay off. Last year they got Cliff Lee out of the junkyard, and this year they are trying the same magic with Carl Pavano. They have great discipline in avoiding the flash and going for substance. With a strong system, sometimes you get bigger than expected impact out of minor adjustments.
5. Oakland Athletics ($60 million in 2009 vs. $48 million in 2008): The Athletics are led by Billy Beane, the man who ushered in a new era of front office analytics as detailed in Moneyball. They have been a perennial contender despite consistently low payrolls as a result of management’s ability to stay a step ahead of the competition. After finishing in 3rd place in 2008, management decided to reinvest profits in the acquisition sweet swinging Matt Holliday. They should be able to squeeze just enough out of their young talent to compete in a weaker division, but beyond that, they need to accelerate their rebuilding.
While the Yankees and Red Sox have outstanding teams built on huge payrolls, we believe that a handful of well-managed, forward thinking teams will compete with substantially less money. Likewise, see if you can get more out of your money…you might be surprised at what you can accomplish even if your pockets aren’t deep.