Does High Payroll Lead to Success?

Rick Karcher of "Sports Law Blog" posted his "2007 MLB Team Payroll Report Card" on Tuesday.

Karcher writes:

"At the end of each regular baseball season, I compare the payrolls of all the teams to see what kind of impact payroll disparity had on overall team performance for the year. [See my 2005 annual report card and 2006 annual report card.] This year's report card, once again, reveals that high payroll simply does not equal success. For purposes of this report, I measure success by which teams make the playoffs because I truly believe that each playoff team has an equal chance of winning the World Series. Once you get to the playoffs, it becomes a matter of timing, luck, molecular attraction and star alignment (in support of this proposition I cite to Annie Savoy from Bull Durham)."

At the end of his post, Karcher sums up his thoughts:

"I walk away with the same conclusion each year. The $50-$70 million range seems to make the most business sense. Looking at the salary data on an aggregate basis, only four of the eight teams in the playoffs are in the top 1/3 in payroll (more than $90M). And three of the eight teams actually fall in the bottom 1/3 in payroll (less than $70M)."