In our article projecting the Yankees for 86 wins, we pointed to the front office’s inefficiency as a reason for the team’s less-than-elite position. Just how inefficient have the Yankees been in compiling this roster of big name geezers?

Dave Cameron of Fangraphs recently wrote an article listing teams by how efficiently they were spending money on player payroll. His method of calculating payroll efficiency builds off of Doug Pappas’ Marginal Payroll/Marginal Wins (MP/MW) metric. The basic idea is that you take the total amount a team is spending on player salary and divide it by their wins in that season (or the wins you project them to have). If a team’s payroll is low and their win total high, their MP/MW number will be low — meaning they are spending efficiently on free agents, extending their younger players at good rates, and producing players from their farm system. If a team is spending a ton of money to produce a low win total, their dollars-per-win number is high — meaning they are paying retail prices.

Cameron makes one important tweak to the Pappas formula. Instead of using a team’s projected wins in the denominator, he uses Fangraphs’ Projected World Series Odds (which they get by using a combination of ZiPS and Steamer’s 2014 player projections, and simulating the season 10,000 times). The Yankees have World Series odds of 2.8%, per Fangraphs (more on that below because it’s a misleading number).

The idea is that you don’t want to credit a team the same for paying an extra $5 million to get from 78 to 79 wins, as you do for a team to get from 88 to 89 wins. Getting that extra win in the high 80’s makes a meaningful difference in your chance to get to the playoffs and win a championship. Using World Series chances gives extra credit to teams like the Yankees, who do spend a ton, but they are paying for extra wins that are worth more.

Even with the weighting in their favor, Cameron’s list supports our contention that the Yankees have significant room for improvement when it comes to spending wisely. They are squarely in the bottom half of the league, sitting at 19th in team efficiency. You can see Cameron’s team rankings here. However, there are a couple of glass half full takeaways here.

First, it could be worse. At least they’re not the Phillies. The Phils spend big — they’re the next team after the Yankees in total payroll. However, the Phillies could be the most clueless organization in baseball. And, for that matter, at least they’re not the Indians, Royals, or Reds. These are teams who rate higher in payroll efficiency than the Yankees, but their owners spend such a miserly absolute amount on player salary that the Yankees are always in a better position to win it all than them.

Second, the Yankees are actually more efficient than this list lets on. Cameron’s metric is a useful cursory glance, but it likely underrates the Yankees to a significant degree. The 2.8% World Series odds is only that low because the Bombers play in the toughest division in baseball. Their odds would be much higher if they played in the super weak NL East. So, they’re not really spending quite so inefficiently, so much as the other teams they’re competing against include some of the best-run franchises in baseball. Also, the betting markets show that Fangraphs is underrating the Yankees. Bovada has them at 6.7% to win the World Series.

In the end, it’s that WS Odds number that really matters. There are only two ways for a front office to hike it up: spend a lot and spend efficiently. We’re certainly happy Hal finally decided to throw down, and we think Cashman/Levine invested in good players. Yes, they’re overpaying — but at least it’s for top talent at the right roster spots, instead of adding Rafael Soriano to be a middle reliever. But ultimately, when you’re in the bottom half of the league in payroll efficiency, it’s a sign you need to tighten up your game.