2014 Milwaukee Brewers Franchise/Roster EvaluationBy: Philip Sophinos, Professor: James Wible

IntroductionThe Milwaukee Brewers

are a professional baseball team that play in the

National League of a larger league called Major

League Baseball (MLB). They play their home

games at Miller Park in Milwaukee, Wisconsin. They are also part of a division called the NL

(National League) Central, which comprises four other teams: the Chicago Cubs, the Cincinnati Reds, the

Pittsburgh Pirates and the St. Louis Cardinals.

PurposeThe main purpose of this project is

to look at, economically and theoretically, how the Milwaukee Brewers as an organization and

roster are structured. The overall team has a payroll that is

distributed amongst the players. However, there can only be 25 of them on the active roster during

the season and each one isn’t necessarily paid the same salary.

Questions like ‘do certain positions on the field account for a larger portion of the payroll?’ and

‘relative to other teams, how evenly distributed are the

Milwaukee Brewers’ salaries?’ will be answered.

Active RosterPlayer Position 2014 Salary MP/$

Wei-Chung Wang Relief Pitcher 500,000.00$ (0.40)Rob Wooten Relief Pitcher 501,000.00$ 0.20

Will Smith Relief Pitcher 502,000.00$ 0.20Martin Maldonado Catcher 502,000.00$ (0.20)

Jeff Bianchi 3rd Baseman 502,000.00$ 1.99Khris Davis Left Fielder 503,000.00$ 2.78

Scooter Gennett 2nd Baseman 504,000.00$ 3.97Tyler Thornburg Relief Pitcher 505,000.00$ 3.76Logan Schafer Left Fielder 505,000.00$ 1.19Jim Henderson Relief Pitcher 512,000.00$ 2.73

Wily Peralta Starting Pitcher 515,000.00$ (2.14)Jean Segura Shortstop 534,000.00$ 6.55Zach Duke Relief Pitcher 850,000.00$ 0.71

Lyle Overbay 1st Baseman 1,500,000.00$ 0.40Jonathan Lucroy Catcher 2,000,000.00$ 1.75Mark Reynolds 1st Baseman 2,000,000.00$ 0.00

Francisco Rodriguez Closer 3,250,000.00$ 0.37Marco Estrada Starting Pitcher 3,330,000.00$ 0.48Carlos Gomez Center Fielder 7,000,000.00$ 1.27

Ryan Braun Right Fielder 10,000,000.00$ 0.19Kyle Lohse Starting Pitcher 11,000,000.00$ 0.30

Rickie Weeks 2nd Baseman 11,000,000.00$ (0.09)Yovani Gallardo Starting Pitcher 11,250,000.00$ 0.04

Matt Garza Starting Pitcher 12,500,000.00$ 0.11Aramis Ramirez 3rd Baseman 16,000,000.00$ 0.06

97,765,000.00$

• MP/$: Marginal product per dollar of labor; the additional production of a player relative to their current salary

• Production is measured by the player’s 2013 WAR

• WAR: Wins Above Replacement; it is a sabermetric statistic that shows how many wins a player contributed to his team’s overall number relative to what a replacement level player would contribute towards it

Payroll Distribution by Position

• Three of the team’s five starting pitchers in the rotation are earning eight-figure salaries, which explains why that position accounts for the highest percentage

• Carlos Gómez, their only true center fielder, accounts for a larger percentage of the team’s payroll than the catchers, first basemen and shortstop do combined!

Bilateral monopoly• This situation occurs when there is a

single consumer and a single seller in a market

• The franchise/owner (monopsonist) wants to maximize profits when the marginal expenditure curve intersects the demand curve

• The monopsony wage can be found by following the supply curve down to the value of 34

• This number represents the bottom 60% of the Milwaukee Brewers receiving the resultant percentage amount of payroll by salary

• Conversely, the monopolist (any player and their agent) would like to maximize profits when the marginal revenue curve intersects the supply curve

• The monopoly wage can be found by following the dashed line up from that intersection to the number 63

• This value represents the top 20% of Milwaukee Brewers receiving the corresponding percentage amount of payroll by salary

• The actual wage falls somewhere between these two values

• The monopsonist’s’ and monopolist’s’ bargaining power is a major influence

Lorenz curve comparisons

Percentage of Players

Percentage of Payroll by Salary 2014 Milwaukee

Brewers 2014 New York

Yankees 2014 Colorado

Rockies 81-100% 100% 100% 100% 61-80% 37% 46% 35% 41-60% 11% 12% 12% 21-40% 5% 3% 6% 0-20% 3% 1% 3%

• This curve measures the distribution of income among the 25-man rosters of the Milwaukee Brewers along with the Colorado Rockies and New York Yankees

• Theoretically, the first 10% of a team’s roster is supposed to account for 10% of the payroll and the first 20% is supposed to account for the first 20% of the payroll, et cetera

• However, all three Lorenz curves sag below the equality line to indicate an unequal distribution of wealth

• From the graph, the top 32% of the New York Yankees’ roster is significant because their Lorenz curve lies inside that of the Milwaukee Brewers’

• This indicates that the Brewers have a much more unequal salary distribution than the Yankees

• The quantity of eight-figure salaries on the Brewers compared to the Rockies is illustrated by the higher percentage of payroll by salary within the top 20% of both teams’ rosters

Attendance and Prices• The Milwaukee

Brewers’ marginal revenue and demand curve are downward-sloping to signify the degree of market power they exercise (i.e. when baseball fans in Milwaukee believe there are no perfect substitutes to a Brewers game)

• On game days at their home ballpark, Miller Park, the team’s marginal cost curve is zero and lies horizontal until the stadium is at full capacity (41,900)

• Because of this large capacity, the marginal cost curve becomes vertical after reaching the end of the demand curve, which shows that the stadium is almost never at full capacity

• In order to maximize profits, the Milwaukee Brewers should set their ticket prices at $24, which would enable around 22,000 fans to buy a ticket

Data• Salary figures were mostly

obtained from www.baseball-reference.com, but also from www.spotrac.com

• Active roster and depth chart information were received from the team’s’ official website

• For the “Attendance and Prices” section, the Forbes website was used to retrieve ballpark information

Contact InformationEmail: paq35@wildcats.unh.edu