05/15/2013 05:50 pm ET Updated Jul 15, 2013

A Big Payroll Doesn't Guarantee a Big Payoff

There is no joy in Southern California baseball fandom -- the mighty local teams have struck out. The Los Angeles Dodgers had an opening day payroll of $216,597,577, second only to the Yankees. Their record through Friday was 13-20 which placed them fifth in the National League Western Division.

The Angels had a more modest opening day payroll of $127,896,250 which still placed them as the seventh highest paid team. Their record Friday was 12-22 which had them occupying fourth place in the American League Western Division.

So much for the myth that larger spending on player costs automatically translates into victory on the field.

The new Guggenheim ownership group, flush with revenue from a staggering Time Warner local television contract and their own substantial resources set out to make the Dodgers the shining jewel of a franchise they had been in previous eras. They resigned Matt Kemp (8 years/$160,000,000), signed Adrian Gonzalez (7 years/$154,000,000), Zack Greinke (6 years/$147,000,000) and Carl Crawford (7 years/$142,000,000) and kept on spending. And they have produced a team of constant injury, pitiful hitting, fielding and pitching.

Arte Moreno, the Angels owner, once again moved boldly to keep his team competitive with the Texas Rangers by signing free agent and former Ranger OF Josh Hamilton (5 years/$125,000,000) after last year signing free agent 1B Albert Pujols (10 years/$250,000,000). Hamilton is hitting .213 so far with 4 HR's and 11 RBI's, and Pujols is hitting .238 with 5 HR's and 19 RBI's and the team is floundering.

The NBA and NFL have salary caps designed to keep some parity in spending. Baseball allows free spending with a luxury tax. The fear has always existed that cities like New York and Los Angeles and Chicago -- the largest media markets generating the most revenues -- would field dominating teams that would take all the competitive fun out of the sport. It is clearly true that teams like the Houston Astro's with a payroll of $22 million, 10 percent of the Yankees outlay, cannot reasonably expect to compete. Neither can the Miami Marlins at $36 million. But at a certain level, coaching and team cohesiveness, complimentary skill-sets and lack of injuries play a leveling role.

If spending were the total story, the New York Yankees should have won the last five World Series. Their payroll this year is $228 million, $60 million more than the third highest Philadelphia Phillies. But they have won only once in 2009. The San Francisco Giants won last year with the eighth highest payroll, in 2011 it was the St. Louis Cardinals who were 11th ranked and spent half what the Yankees did. In 2010 it was the Giants who spent less than $100 million to the Yankees $206 million. In 2008, the Philadelphia Phillies won spending less than $100 million to the Yankee total of $209 million.

It would appear that building a strong minor league system that produces a consistent flow of young, homegrown stars who stay with a team for their careers is a formula which produces more winning franchises than relying on high spending for aging free agents. This is the formula the Dodgers won with for years and the Angels relied on to win their only World Series.