Assuming you have a baseball team, Ben Fry will let you answer that question. He has created a tool for visualizing the salary of Major League Baseball teams versus their performance in 2007 (prev. As he explains:
This sketch looks at all 30 Major League Baseball Teams and ranks them on the left according to their day-to-day standings. The lines connect each team to their 2007 salary, listed on the right.
Drag the date at the top to move through the season. The first ten days of the season are ommitted because the rankings to (at least) that point are statistically silly. You can also use the arrow keys on the keyboard to move forward or backward one day.
A steep blue line means that the team is doing well for its money, which reflects well on the team’s General Manager. A steep red line implies that the team is throwing away money. The thickness of the line is proportional to the team’s salary relative to the others.
The images above are captures of the beginning of the season rankings (left) as compared to now (right). It looks like Boston is now at a break-even point whereas the Yankees are sinking and a bit over-paid. I wonder if any of the GM compensation decisions are made based on this tool.
Really interesting comment from Joe Wikert on the dangers of over-simplifying:
Cool tool, but it really only shows part of the overall investment picture.
What really matters is whether your team makes the post-season and, more
importantly, how far they advance. That’s often where the real money is
You also need to consider gate and other income sources. The Yankees are a
great example. Steinbrenner has been very creative when it comes to
monetizing the team. Yes, they’re definitely over-spending this year, but
how do their gate receipts compare to, say, the Pittsburgh Pirates? I
would much rather support a team that overpays in an effort to win it all
rather than a team that tries to save its way to prosperity (e.g., Pirates,
The longer it takes for the Yankees to win their next championship, the
more the franchise loses in cap sales, jersey sales, etc. If the Yankees
were to suddenly switch to a cost-cutting model, year after year, it would
even further tarnish their image.
Another way to look at this: Which franchise has the highest market cap, if
you will? Forbes runs those valuations from time to time and it seems like
the Yankees are always at the top. Huge market. Huge brand name. They’d
suffer miserably if they started cutting salaries.
P.S. — In the interest of full disclosure, I’m a fan of both the Yankees
and the Pirates! And yes, I’m deeply disappointed in both, but for