Is Competitive Balance a Real Issue in Baseball?
Photo via Keith Allison
When talking about competitive balance, fans are quick to get heated. Arguably the most controversial topic in baseball, this phenomenon has been debated for years. In one of our recent articles, Matt Code examined the nuance that position players seem to be pitching more often, concluding a competitive balance issue must be present. The article is linked here for those that are interested, although all the necessary information is within this piece. Readers of the blog were quick to question this claim. Fans resentful of the fact that Big-Market teams can outspend those in smaller markets point to it as the obvious reason there is a competitive issue. Yet, that is hardly the case. In a recent Fangraphs post, Dan Szymborski points to the fact that only 14% of team variance in winning percentage can be explained by payroll (which is linked here). Big Market teams are quick to use this statistic, jumping to the conclusion that there is no competitive balance problem. Genuinely curious for an answer, I began to dive into the data (all provided free of charge by retrosheet.org).
To begin my examination, I first had to decide what competitive imbalance looks like. Many methods that define imbalance use the standard deviation of every team’s winning percentage. In theory, the smaller the standard deviation, the more competitive the league tends to be. However, I believe this is not the most accurate way of looking at this issue. Being assigned a binary answer of win or loss may be how the playoffs are decided, but it fails to take the environment of the actual game into account. As Bill James notes in his Pythagorean W-L% statistic, not all wins and losses are created equal. Hence, I want to consider run differentials. It will provide a much clearer picture of the competitive landscape in baseball.
As noted earlier, Matt attributed position players’ pitching to blowout games (a team winning by a margin of 6 runs or more), which implied a competitive balance issue. A problem, if existent, could be discovered by looking back until 2010 (excluding 2020). Based on some preliminary analysis, 95.5% of the variance in the number of blowouts in a season can be explained by the average run differential of each game. With run differentials going hand-in-hand with the number of blowout losses per season, they are very close to being interchangeable in explaining competitive balance. I looked at the entire array of game log sheets, logging the run differentials for each game. The data is shown below:
Among the years included, the average number of blowouts was 452.091. The average run differential was 3.433. By themselves, these numbers are admittedly useless. The general point of tracking these figures is to try to identify a trend, which is not very obvious just yet. In graph form, the results become more visible:
As can be seen, the number of blowouts per season seems to be up compared to the first half of the past decade and change. But striving for concrete proof, a clear trend is not evident in this data visual - the constant ebbs and flows that are seen year to year somewhat muddies the results. To smooth this raw data into fewer points and make a trend line (if existent) evident, I used the three-year rolling averages. The chart for these three-year average numbers is shown:
This is much better - a clear trend is now much more visible. Both charts experience a very evident uptrend, which shows that the number of blowouts and the average run differentials is going up. Since these factors are trending upward, the competitive balance must be declining. Beginning around 2014, Major League Baseball began to experience a downturn in said balance (the higher the numbers, the less competitive balance is apparent). The numbers appeared to come to a high in 2017, with both the single-season and the three-year average rolling season experiencing the biggest losses in year-over-year competitive balance for both run differential and blowout games. From there, the levels have stayed somewhat constant - failing to go significantly above or below the 2017 mean. If the league has taken notice of this clear issue, the action seems limited.
In examining these findings, it appears that a competitive balance issue is more apparent now than when the sample started in 2010. With competitive balance declining, the degree of competition within a single game will be much less attractive to fans. If this trend were to continue, fans of losing teams would begin to lose most hope in their franchise, causing catastrophic effects on potential revenue. The same sort of theory applies in the adverse to the fans of successful teams. If these teams are constantly winning and lose the sense that they’re gaining something, their fans lose the incentive to watch those teams. While these examples are extreme, it shows that a sense of competition is ultimately what keeps all fans interested. By these numbers, the league is slowly losing that sense of parity.
As for the cause of this issue, I am not entirely sure. One of these factors worth mentioning is the run environment. While I was unable to find a variety of articles stating the concrete effects of the run environment on competitive balance, I did come across a simulation by the blog Exploring Baseball Data with R. Based on their findings (which they admit were limited), a low-run environment generally increases competitive balance. And while this is promising, a lack of evidence has me hesitant to draw that same conclusion - the opposite could also be true. The structure of the ball and various rule changes are all within MLB’s scope to alter the game and run environment, although whether it is for better or worse is up for questioning. The difference in team payroll is also a possibility, but it is an unlikely one due to its low correlation to winning percentage. I’d argue that the answer lies in the total investment in data and measurable skill in analytics of a given team. However, most of that data is closed and hard to calculate, making a conclusion nearly impossible. Whatever the cause, Major League Baseball needs to examine why the game is getting less competitive. If they want to bring in the new fans that are necessary for the survival of the sport, they need to quickly figure out how they’re going to fix this issue.