# Mlb Competitive Imbalance Discussion Of The Imbalance, Standard Deviation Of Teams, Frequency Of Playoff Qualifiers, And Salary Cap

872 words - 3 pages

Correcting the ImbalanceOver the last ten years, evidence suggests that Major League Baseball (MLB) has been competitively out of balance. We can examine this inequity by presenting standard deviation results, measuring the frequency of playoff qualification, and observing World Series qualifiers and their payroll. Finally, we can discuss how a salary cap would correct some of the inequity found within baseball.In November 2000, Bud Selig stated: "At the start of spring training, there no longer exists hope and faith for the fans of more than half our 30 clubs (SportingNews.com)." To support this, we can examine the dispersion of winning percentages (standard deviation). They are shown in the table below. In the American League, the standard deviation of winning percentages is more than twice what it would be in a league with absolutely balanced teams. In the National League, the actual-to-ideal result is just under 2 (1.874). The larger the standard deviation, the greater the dispersion of winning percentages. These two numbers strongly suggest that both leagues are not balanced competitively.Another way we can measure competitive balance is the frequency of teams qualifying for the postseason. The table to the left measures this frequency. In the A.L., the Yankees made it every year while in the N.L., the Braves made it every year except one. In a perfectly balance American League (14 teams), 12 teams would make the playoffs three times and two teams would make the playoffs twice, for every ten years. In the National League, eight teams would qualify three times and eight other teams would make it twice, for every ten years. Using this, the HHI formula can be incorporated with the frequency of qualifying for the playoffs. Instead of using a "first place finish" as the criteria we can replace it with "qualifying for the postseason." The table to the right shows the calculations. The ideal results represent the situation described above (where the number of times a team qualifies for the playoffs is as equal as possible). As we can see, there is not a great deal of equality in terms of the teams that qualify.A final way we can view competitive balance is by looking at the World Series qualifiers and their payroll. To make a point that will lead into the proposal to improve the balance of the league, we can see that in 10 of the 20 cases, the team participating is in the top 25% of payroll. The average team to make the World Series has a payroll that ranks 7.75 out of the 30 teams in the league. Furthermore, seven of the teams that made the World Series were in the top...

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