My good friend Nick Johnson has an interesting post in which he uses the Tampa Bay Rays as an example of how "you get what you pay for" isn't true in baseball. He then uses that example to spring forward to university administrator salaries:
It's a story worth remembering next time we buy the "you get what you pay for" line when hiring university administrators (we've recently picked up another one in the $500,000-$1,000,000 range (salary, plus benefits, expenses, deferred compensation, etc.).
It's not clear to me if Nick is saying that the Rays refute the notion that you must have a large payroll if you want to make it to the World Series, which would certainly be correct, or that total payroll doesn't matter, which seems to me to be incorrect.
If we look at the 2008 payrolls for each team, we see that the playoff teams ranked as follows:
Red Sox #4
White Sox #5
(out of 30 teams)
All but one of the playoff teams ranked in the top half by payroll, and the #3 ranked team (Mets) was edged out on the last day of the season for the NL wild card by the #15 team.
So, while it is certainly true that the Yankees (#1), Tigers (#2), and Mets didn't get what they paid for, the next group of teams kind of did. And apart from the Rays, the only small payroll team that came close to the payoffs was the Twins (#24), who were beaten by the White Sox in the one-game play-in following the end of the regular season.
In baseball, having a big payroll is neither necessary nor sufficient for guaranteeing the playoffs, but it seems highly correlated. Of course, there are lots of reasons to think that university administrators are different from baseball players, and universities from baseball teams, but I'll leave that as an exercise for the reader.