The Boston Red Sox spent about $47 million more than the league average on their payroll last year. Their 2014 won-loss record, however, was 20 games below average at 71-91.

The Red Sox response?

Spend more.

In the last 24 hours, the Red Sox have agreed to sign free agents Pablo Sandoval and Hanley Ramirez to contracts worth 5-years/$95 million and 4-years/$88 million, respectively.

And that gives me a perfect opportunity to present my statistical analysis of 2014 payrolls, won-loss records, and dollars spent per Win.

I took an interest in that analysis when I read the following statement, regarding MLB payroll, that was recently made by a commenter on Bob Smizik’s blog:

That old adage seems to make sense. People want to believe that they get what they pay for and that if they pay more for a product, they will get more out of the product. But I wasn’t willing to simply assume that MLB teams “get what they pay for very close to 100% of the time.” So, I took a close look at payrolls and wins.

The 30 major league teams spent a total of $3.45 Billion on payroll in 2014. And they played a total of 2,430 games; which, of course, means that there were 2,430 “wins” in 2014.

So, to determine the amount MLB teams spent per win, I divided $3.45 Billion by 2,430 wins and got the result of $1.42 million per win.

To determine the number of games a team should have been expected to win, based upon the theory that “they get what they pay for,” I divided their payroll by $1.42 million – the MLB average dollars spent per win.

For instance, the average amount that teams spent on payroll was $115 million per team. Therefore, if teams really do “get what they pay for,” a payroll of $115 million should result in a won-loss record of 81-81. *(115 million divided by 1.42 million is 80.99)*

But the research says that teams *rarely* got what they paid for in 2014.

Only 5 teams came within 5 wins of the number that would have been expected, based strictly upon their payrolls – if they do, indeed, “get what they pay for.” And the median average deviation from payroll win expectation was a whopping **20 wins!**

At a median average deviation of 20 wins, a team with a league average payroll*, *which *(based on the theory that get what they pay for) *would be expected to go 81-81 – could actually end up being anywhere from a 101-win team to a 101-loss team. Therefore, the notion that “teams get what they pay for” simply wasn’t anything close to true in 2014 – unless it meant that a team with a league average payroll “got what it paid for” as long as it ended up being anything from the best team in the league to the worst team in the league. In other words, payroll told us almost nothing about how a team can be expected to perform.

Payroll as a predictor of winning percentage was a nearly complete failure in 2014.t

Here are the results for each of the 30 MLB teams, beginning with the 3 who won exactly the number of games that their payroll would suggest. The accuracy of payroll as a predictor of wins drops quickly from there.

**Braves**: Payroll: $112 million; Win Expectation: 79; Wins: 79; **Deviation: 0**

**Rockies**: Payroll: $94 million; Win Expectation: 66; Wins: 66; **Deviation: 0**

**Nationals**: Payroll: $136 million; Win Expectation: 96; Wins: 96; **Deviation: 0**

**Twins**: Payroll: $92 million; Win Expectation: 65; Wins 70; **Deviation: 5**

**Reds**: Payroll: $115 million; Win Expectation: 81; Wins 76; ** Deviation: 5 **

**Cubs**: Payroll: $93 million; Win Expectation: 65; Wins 73; ** Deviation: 8**

**Brewers**: Payroll: $104 million; Win Expectation: 73; Wins: 82; **Deviation: 9**

**White Sox**: Payroll: $90 million; Win Expectation: 63; Wins: 73; **Deviation: 10**

**Angels**: Payroll: $158 million; Win Expectation: 111; Wins: 98; **Deviation: 13**

**Padres**: Payroll: $91 million; Win Expectation: 64; Wins; 77; ** Deviation: 13**

**Blue Jays**: Payroll: $137 million; Win Expectation: 96; Wins 83; **Deviation 13**

**Cardinals**: Payroll: $110 million; Win Expectation: 77; Wins: 90; ** Deviation 13**

**Diamondbacks**: Payroll: $112 million; Win Expectation: 79; Wins: 64; **Deviation: 15**

**Giants**: Payroll: $148 million; Win Expectation: 104; Wins: 88; **Deviation: 16**

**Mets**: Payroll: $85 million; Win Expectation: 60; Wins: 79; **Deviation: 19**

**Orioles**: Payroll: $107 million; Win Expectation: 75; Wins: 96; **Deviation: 21**

**Mariners**: Payroll: $92 million; Win Expectation: 65; Wins: 87; **Deviation: 22**

**Rays**: Payroll: $77 million; Win Expectation: 54; Wins: 77; **Deviation: 23**

**Indians**: Payroll: $85 million; Win Expectation: 60; Wins: 85; ** Deviation: 25**

**Royals**: Payroll: $91 million; Win Expectation: 64; Wins: 89; ** Deviation: 25**

**Tigers**: Payroll: $165 million; Win Expectation: 116; Wins: 90; ** Deviation: 26**

**Rangers**: Payroll: $134 million; Win Expectation: 94; Wins: 67; **Deviation: 27**

**Athletics**: Payroll: $81 million; Win Expectation: 57; Wins: 88; ** Deviation: 31
**

**Astros**: Payroll: $52 million; Win Expectation: 37; Wins: 70; **Deviation: 33**

**Pirates**: Payroll: $72 million; Win Expectation: 51; Wins: 88; ** Deviation: 37**

**Red Sox**: Payroll: $162 million; Win Expectation: 114; Wins: 71; ** Deviation: 43**

**Marlins**: Payroll: $44 million; Win Expectation: 31; Wins: 77; ** Deviation: 46**

**Phillies**: Payroll: $178 million; Win Expectation: 125; Wins: 73; ** Deviation: 52**

**Yankees**: Payroll: $197 million; Win Expectation: 139; Wins 84; ** Deviation: 55 **

**Dodgers**: Payroll: $236 million; Win Expectation: 162; Wins: 94; **Deviation: 68**

The “mean” average deviation between payroll win expectation and actual wins was 22.4 wins. The median average *(same “deviation” number above as below) *was 20.

This does not mean that teams should seek to have the lowest payroll in the major league baseball. But the evidence does lead to the conclusion that spending according to revenues – whether they are large or small – is just as likely to lead to on-the-field success as spending abundantly.