Joe Posnanski has an interesting post up about the relationship between revenue and payroll. As he's so skilled at doing, he turns a common assumption on its head:
You know, we focus a lot here on team payrolls … and those payroll numbers can be pretty stark. This year, for instance, the Yankees $206 million payroll is $44 million more than any other team and at least double the payroll of 22 teams (and six times the payroll of the Pittsburgh Pirates).
But people who know a lot more about accounting and such have told me for a long time that payroll is not the issue — REVENUE is the issue. And when you look at the Forbes numbers, yes, it does seem to ring true that salaries are driven by revenue and not the other way around … that is to say that your ticket price didn’t go up because Roy Halladay got a $60 million extension, but instead Roy Halladay got a $60 million extension because of the price of your Philadelphia ticket (and all the other Phillies revenue streams — the Phillies made $233 million in revenue in 2009, sixth-most in baseball).