How Small-Market Sports Teams Use “The Draft” to Compete and Prosper

Since the American League and National League merged in 1876 to form modern Major League Baseball (MLB), large-market teams have dominated. From 1920 to 1969, the New York Yankees had the largest payroll every season and won 20 World Series. No small-market team reached 10, but the Oakland Athletics and Cincinnati Reds have multiple. How are these teams able to compete with larger markets like the Yankees?

As they won World Series, Yankees’ investors created the Basketball Association of America, predecessor to the National Basketball Association (NBA), and similar to the MLB, large markets like the Boston Celtics and Los Angeles Lakers dominated, winning 35 titles, yet small-markets like the San Antonio Spurs and the Detroit Pistons boast multiple titles themselves.

There exists many commonalities between these successes, with the Oakland Athletics and Cincinnati Reds of the MLB and the Spurs and Detroit Pistons of the NBA all possessing stable front offices, pioneered sports analytics, and used the draft to find cornerstone pieces integral to decades of success across different eras.

Among these teams, the Spurs possess the most success, led by players they drafted. Their success raises the question: Is the Spurs’ success achieved through good fortune or a skillful approach? More broadly, are there specific criteria that separate small-market successes from failures? This study endeavors to answer these questions by analyzing numerous small-market case studies, while including a history of the draft, defining small-market success and player evaluation methods, and suggesting some improvements to grow competitive balance.