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How Much of An Advantage Is a Bigger Payroll?

We all know that it's easier to make the playoffs in a sport without a salary cap if your team spends more money. More money allows you to acquire valuable free agents and make more mistakes in your talent evaluation and still recover.

MLB baseballs seen through the netting of a basket
Getty Images
MLB baseballs seen through the netting of a basket

But how much more of an advantage is a larger payroll in Major League Baseball?

I looked at the final season payrolls from 2001-2010 and came up with these odds. Of the 78 teams who made the playoffs, 48 of them (61.5 percent) were among the top 10 highest spenders. Eighteen of them (23.1 percent) ranked in 11th to 20th in league payroll. And 12 playoff teams (15.4 percent) came out of the bottom third of payroll.

So by going from a team in the bottom third, to a team in the middle third, you increase your chances of being in the playoffs by 50 percent. By going from the middle third to the top third, you increase your chances of making the postseason by 166 percent.

This year, half the playoff teams (based on Opening Day payrolls) came from the top third of payrolls (Yankees and Tigers), while 1/4 of the playoff teams came from the middle (Cardinals and Brewers) and bottom of payrolls (Rays and Diamondbacks).

As for actually winning it all?

Out of the last 10 winners, 60 percent have come from the top third of payroll, while 40 percent came from the middle third. There haven't been any winners from the bottom third over the last decade.

Questions? Comments? SportsBiz@cnbc.com