Does higher club payroll in Major League Soccer directly relate to success? In US professional sports the big market teams or the teams that have the most money are often the most successful. In Major League Soccer however, it seems that the teams that do not spend as much money tend to compete and be just as successful as the big spenders. This brought me to my research question: Does higher club payroll in MLS directly lead to success? To determine this I had to define “success” in terms of the question and I defined a team being successful as making the playoffs. My hypothesis is that the teams with smaller payrolls will have similar success as the teams with higher payrolls.

Data Sources For my data I observed each team’s base salary and their point standings at the end of the year. Their point standings let me know if the club made playoffs, my judgment for success. I looked at years because 2012 was the first year that the league had all 19 teams they have now. I used the two websites above to find my data and put them into charts to see the correlation between the two more clear.

Data Analysis I set up my data in a chart that establishes how large a team’s payrolls is and how well they did that season. Based on the data shown the top spending clubs made the playoffs, but teams that spent much less were able to make the playoffs as well. In of the teams that made playoffs were in top 10 of payrolls, in of the top 10 teams in payroll made playoffs and in of the top 10 in payroll made playoffs.

Conclusion I came to the conclusion that my hypothesis was correct, that although the teams with the highest payrolls were typically successful the teams that spent much less were just as successful. To validate this I must understand that the my definition of success in this case was to make playoffs. In 2012, 50% of the teams in playoffs were from the bottom half of payrolls. In 2013, 70% of the teams in playoffs were from the bottom half of payrolls. In 2014, 40% of the teams in playoffs were from the bottom half of payrolls. In the sample observed only 33% of time are the majority of the successful teams from top 10 in payroll. This gives us validation that the teams in the bottom half of MLS in terms of payroll have just as much success in making the playoffs as the teams in the top half. We can further examine this by looking at our charts in the Data Analysis slide. The charts show no consistent trend line going from lower to higher payrolls towards more success. The data is scattered giving us the conclusion that teams even in the left side of the charts, or the smaller payroll side, are able to have high points just as much as the teams on the right side of the chart, or the higher payroll side.