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Home run pay isn't always a good thing

Alex Rios of the Kansas City Royals celebrates with teammates during a game in Kauffman Stadium in Kansas City in July.
Ed Zurga | Getty Images
Alex Rios of the Kansas City Royals celebrates with teammates during a game in Kauffman Stadium in Kansas City in July.

The Kansas City Royals have electrified an otherwise tiresome American League Central this year. The boys in blue have the best record in the league and are on track to defend their first pennant in 30 years.

They're also the most evenly paid team in the majors.

A Big Crunch analysis shows the Royals' payroll is the most equally distributed among its players, based on the average yearly pay for their current contracts. And that could have something to do with the team's impressive performance.

The Dodgers have the overall biggest payroll this year at over $300 million and the highest average pay of $6.1 million, according to data from Spotrac. But the $30.7 million average paid to Clayton Kershaw over his seven-year contract draws that average up quite a bit.

Alex Rios and Edinson Volquez, on the other hand, are the only Royals who make an average of $10 million a year for their contracts. Six other players make more than $750,000. That payroll distribution gives the Royals a Gini coefficient of 0.49, a statistical measure of inequality, and the lowest in baseball.

The Gini coefficient is a 0-to-1 metric that's normally used to measure income inequality in countries around the world. A Gini coefficient of 0 represents perfect equality while a figure of 1 indicates pure inequality.

As far as team payrolls go, Major League Baseball is the most unequal American sport outside of Major League Soccer. That's likely because of structural matters in baseball and the vastly different market sizes and value of teams.

In some ways, baseball is unique among American sports: Teams don't have a salary cap and baseball's system of free agency allows players to offer themselves on a relatively open marketplace, making baseball the most capitalist in terms of supply and exchange value.

Teams are allowed the discretion of spending a lot on certain star players or evening out their payroll in the hopes of attracting solid talent all around. That gives the league itself a Gini coefficient of 0.66, which is just over South Africa, one of the world's least equal countries, according to the World Bank.

Even so, baseball players are in the privileged few when it comes to American earners. The base salary in MLB for 2015 is $507,000, putting even the lowliest of ball players solidly within the top 5 percent of household earners in the U.S.

Of course, a gigantic payroll doesn't necessarily mean that a team will do well. In fact, income inequality and team records in baseball have a correlation coefficient of negative 0.32 this year. That means there's a weak inverse relationship between pay equality on the ballfield and a winning season.

There's also been significant academic discussion over the past few years on income inequality among professional sports teams. Some researchers suggest that wide distributions of salaries operate like incentives in laissez-faire economics: By allowing teammates to earn vastly different sums you can create competition for the very best performance.

Another argument in favor of inequality is the so-called "superstar" effect. That's when a few highly paid players are paid far more than their teammates but deliver far superior performances and essentially carry the team (think A-Rod or Barry Bonds-like performances, and lots of home runs.)

On the other hand, some researchers say more equally paid teammates perform better on the field and for their team's bottom line. The idea is that players who know they are equally paid are likely to work together more as a team instead of trying to compete against each other for the top salary spot.

If the Royals continue their hot pace with such a unique salary approach, they might start to change the way other teams think about personnel and salary cap management.