We are in July, and the Cincinnati Reds are in first place in the NL Central. They lost 100 games in 2022 and entered the season as the youngest team in the National League. A season-altering win streak brought them to the top of their division and re-energized a fanbase from record-low attendances early in the season to nightly sell-outs. The Reds are now one of the most exciting young teams in the majors, with youngsters leading the new Reds for years to come. The Reds ‘ future is bright with young players such as Elly De La Cruz, Matt McLain, Andrew Abbott, Hunter Greene, and more already on the team and more coming up before too long. Everything here seems to be good for baseball–a young and exciting group of talent bringing back a fanbase and leading a team back into relevance–but the short-term excitement of the Reds covers up the damage they and other similar teams are doing to baseball.
In 2021, the Reds finished 83-79 and missed the postseason. Following the disappointing finish to their season, Cincinnati’s front office began to sell off their roster. Nick Castellanos left in free agency, Jesse Winker and Eugenio Suarez were traded to Seattle, Sonny Gray was traded to Minnesota, and Wade Miley left on waivers. At the 2022 deadline, the Reds traded ace Luis Castillo to Seattle and Tyler Mahle to Minnesota. This team was rebuilding, and their payroll fell from $127 million, about league average, to $115 million, 22nd in the majors. That fell even further to $93 million this season, 25th in the majors. They built up their farm and received better picks for upcoming drafts.
Cincinnati is not alone in this, however. Four of the six division leaders in baseball have a below-average payroll. None of the top seven teams in payroll are leading their division, and four of those seven are not even in a wild card spot. Of the four teams with a winning percentage over .600, two are in the bottom three in payroll (Tampa Bay and Baltimore). The difference in median winning percentage between the top 15 teams in payroll and the bottom 15 teams in payroll would be just over seven wins throughout 162 games. The Rays and Orioles, the best and fourth-best teams in the majors this season, have a combined payroll that would still be under the league average. While the Rays’ situation is unique due to their consistent success with such a low payroll, the Orioles’ isn’t. From 2018-2021, they lost 100 games every season, excluding the shortened 2020 season. Due to this consistently awful play, they got top draft picks year after year, building up the best farm system, which has since had played called up to the majors with players such as Adley Rutschman, Grayson Rodriguez, Gunnar Henderson, Heston Kjerstad, Jackson Holliday, Jordan Westburg, Colton Cowsers, DL Hall, and more.
As a result, the Orioles went from 52 wins to 83 last year, and in 2023, they are currently in possession of the second-best winning percentage in the American League. They have gone from a universally criticized team for their lackluster spending and consistent last-place finishes to another exciting young team. The Orioles organization isn’t doing anything differently for what they were knocked over. They still spend very little on their team, but losing so much has built that farm system up so they can win even with that low payroll. Of course, this isn’t a sustainable method of winning. While their farm is currently stacked, and their major league roster will continue to improve over the next few years, eventually, they will not be getting such high draft picks, and their inability to improve their team in any other way will lead to the rebuild cycle coming around yet again. While sure you can complement the Orioles for their great draft picks, they still are the same organization that was the worst in the league for years and years, just like the Reds are the same organization that completely sold off a couple of years ago.
On the flip side, teams with higher payrolls are struggling. The team with the highest payroll in the Mets are sitting well under .500 and are miles back in the division and a significant amount back even in the Wild Card. The Yankees are in third place, and the Padres are also well under .500 and on the outside looking in for a playoff spot. Many monster contracts signed this past offseason have not gotten off to the best starts. Trea Turner and Manny Machado are having the worst seasons of their careers through the first half of the season. Xander Bogaerts is having his worst season since 2017, and Aaron Judge has played barely half of his team’s games. For Justin Verlander, it’s his worst season since 2014. Rafael Devers, while still having a solid season, is well underneath the numbers he put up over his last three full seasons. Carlos Rodon has pitched just one game for his new team, and Carlos Correa is also having the worst season of his career.
We see the highest-paid players and the highest payroll teams struggling while young and cheap rosters succeed. The Mets have skyrocketed past the luxury tax, worsening their future draft picks and leading to a large tax sum for owner Steve Cohen to struggle and find themselves out of the playoffs. On the other hand, the Reds and Orioles are spending just a fraction of the Mets yet are both in postseason positions, with young and exciting players becoming future faces of baseball. It’s easy to hate on the high payroll teams and root for the cheaper and younger rosters. Just one year ago, the baseball world constantly criticized Reds owner Bob Castellini, but things have changed. While both teams are fun to watch, their success combined with the struggles of others does minimal to promote increased spending from owners across the league doing the opposite. Why would teams go out and spend when they can be cheap and win? While it took Baltimore years and years of struggling to build up their elite farm, for Cincinnati, it has been just two years since they last contended. This encourages other owners to follow the same model of success. We know teams seen as “smaller market” organizations can spend; for instance, look at the Padres instead; other teams choose not to. There’s not much from 2023 thus far that shows increased spending as a method of success, so owners have less reason to. The success of these low market rebuilds compared to the high payroll failures is exciting at the moment but overall harmful long-term to the game itself.