We often view the business of baseball as separate from the product on the field. We find ourselves wondering why all 30 teams aren’t aggressively pursuing upgrades in free agency every offseason in a quest for the title. We wonder why there aren’t more small-market teams behaving like last year’s Royals, who used free agency to go from 56 wins to the playoffs. What’s stopping every team from doing the same?

As fans, we measure success in wins. This is true at both the team and player level, with the standings dictating our satisfaction and stats like Wins Above Replacement dominating modern baseball discourse. 

Behind the scenes, however, success is also measured in dollars. Here at BTV, we try to bridge the gap between the fan and the front office by presenting player value in dollars too. 

On average, one WAR is valued at about $9 million, give or take, depending on position. Using that benchmark for player WAR, combined with our internal projections, we get an estimate of each player’s field value. Their salary is then subtracted from that number to get the surplus value you see on our site. 

 

The win curve

But does every team calculate surplus value the same way? Are all wins created equal? 

In reality, the value of a win is different from team to team and season to season. Take, for example, an additional win that could put the Red Sox into the playoffs after an extended postseason drought. Compare that with an additional win that could bring the Rockies from last place in the NL West to… last place in the NL West. Which of those wins would you pay more for?

The answer is obvious, and it’s part of the reason the Red Sox are poised to be one of this offseason’s biggest spenders, while the Rockies’ biggest piece of news so far has been a slew of non-tenders. 

The Red Sox are a big-market team with a passionate fanbase that missed a playoff berth by just five wins. Intuitively, one would assume that the same five additional wins in 2025 would be worth more to Boston than they would to Colorado, but have you ever tried putting an actual dollar figure to it? In 1999, Vince Gennaro introduced that very concept to the public sphere in his book Diamond Dollars. He called it a “win curve.”

Gennaro’s win curve plots the relationship between incremental wins and revenue on a slope. The slope of the plot varies across markets and over time. In the above example, the Red Sox have a theoretical win curve that is much steeper than that of the Rockies. Put simply, their additional wins generate more revenue, in turn giving them more room to spend to obtain them. 

The Rockies, on the other hand, likely have a much flatter win curve, offering a partial justification for their reluctance to spend on talent over the years. An incremental win doesn’t generate as much revenue for them as it does for the Red Sox, making it more difficult for them to sustain high payrolls even in times of success. Below is a visual example of what a steep and flat win curve look like, taken from Gennaro’s book.

 

 

You’ll see that on the steeper win curve, the largest gains occur in the area between about 85 to 97 wins. That’s because those are the wins that start to significantly alter a team’s playoff odds. When a big-market team is in playoff contention and the games still matter late into September, the team can expect a large boost in revenue, according to the curve. This is particularly true when they actually qualify for the playoffs, because of the additional revenues that hosting home playoff games bring. The gains tail off once a playoff spot is assured and September games go back to being less meaningful. 

On the flatter win curve, the team still sees a boost in revenue, but it’s not quite the same. In a smaller, more apathetic market the fans don’t respond to additional wins as strongly or in as large of numbers. This means that the team can’t spend as freely, with tighter margins on a cost-per-win basis. The teams that succeed under this structure have an acute understanding of surplus value, extracting the most field value from the fewest dollars they can.

One of the most successful small-market teams under this structure has been Tampa Bay. They’ve been able to remain competitive with a stricter budget by making shrewd trades and prioritizing surplus value. 

Take this one from last offseason, where the Rays traded staff ace Tyler Glasnow, outfielder Manuel Margot, and cash to the Dodgers for pitcher Ryan Pepiot and outfielder Jonny DeLuca. 

 

 

 

From 2022 to 2023, the Rays went from 86 to 99 wins. With a steeper win curve, that year-over-year increase of 13 wins may have generated the additional revenue it would have taken to extend Glasnow, or at least bring him back for another shot at the playoffs in the final year of his deal. With a flatter win curve, however, that wasn’t the case, and the Rays chose to trade Glasnow, prioritizing the surplus value they got from the pre-arbitration salaries of Pepiot and DeLuca. Such is the reality of operating a team in a smaller market that has had trouble filling the stands even in their most successful seasons.

On the flip side of the surplus-value equation, you can find the Yankees. They won 82 games in 2023, quite the down year by their standards. They then took decisive action to remedy this by making the below trade for superstar Juan Soto. 

 

 

The Yankees paid a hefty price to complete the trade, and took on substantial flight risk with Soto in the last year of his deal, which of course became real when he signed with the Mets. But as a big market team with a steep win curve, their increase from 82 to 94 wins — including a division title and a trip to the World Series — likely generated a revenue windfall that will help them this year as well.

It would be hard to call this deal a loss for New York, despite them coming up on the short end of the surplus-value equation. As a big-market team, they can more comfortably prioritize the field value in any potential deal, which is what they did here. And despite their failure to retain Soto, the Yankees have spent again this offseason to maintain similar levels of revenue. This is an example of the financial cycle that constantly pushes top players to big markets.

 

Free agency

Which brings us to free agency, where the win curve is especially instructive. When bidding for players on an open market, prices are driven up and newly signed contracts often immediately take on negative surplus value. But does that mean free agent contracts are all bad? 

Certainly not, because the teams signing them are making calculated assessments of what they will earn from the additional value the player brings them on the field in accordance with their win curves. There is also an idea of “investment spending,” wherein a particularly popular player can bring in revenue on their own, regardless of winning.

Possibly the best example of this concept was last offseason’s record-setting deal Shohei Ohtani signed with the Dodgers. It was worth every penny for Los Angeles, who had maxed out on their win curve for years and were in search of that final revenue boost that comes with winning the World Series. In that respect it wasn’t entirely an investment spend for the Dodgers, since the competitive implications were still present. 

But Ohtani’s status as the game’s most popular player — possibly in the United States but most definitely in Japan — would have resulted in a sizable revenue boost on any team with any record. His unique marketability, both at home and abroad, is the perfect example of a player worth investing in at any stage.

 

Investment spending

Another great example of investment spending from last offseason was the aforementioned approach taken by the Royals, as their aggressiveness in free agency, despite winning just 56 games the year prior, helped convince their homegrown superstar, Bobby Witt Jr., to sign a long-term extension. 

That spending worked out well on the field too, but even if the Royals had seen a more modest improvement in the win column, retaining Witt alone would have made that spending worthwhile to their bottom line. 

Ohtani and Witt, though, are some of the game’s brightest stars, which make their situations unique. Players like Alex Bregman, Willy Adames, or even Corbin Burnes, some of this year’s marquee free agents, aren’t necessarily big enough draws for teams to disregard their win curves in favor of investment spending.

 

The tricky part

Unfortunately, most MLB teams don’t have to share their financials (the two exceptions are Atlanta and Toronto, who are owned by publicly traded corporations), making the construction of win curves for public consumption an impossible task.

It’s a near certainty, however, that teams have models like this in place internally to help inform their decision-making. In fact, an interesting under-the-radar development took place recently in the Twins’ front office, where lead baseball executive Derek Falvey assumed leadership of both the business and baseball operations departments. It’s a signal that at least one team is moving to establish better cooperation between these two silos, with an understanding that the relationship between winning and revenue is paramount to their overall success as an organization. 

Time will tell if this new front-office dynamic pays off in Minnesota, but it does make one thing clear: MLB teams know that the product on the field and the fundamentals of the business go hand in hand.