Abstract
This article review the result of different salary structures affect the team performance.There is literature discuss the relationship between team salary level, allocation and team performance.The team with more budget could attract talent players,but does not necessarily have a good team performance.The degree of variation within the team salary will also have an impact on the personal performance.Therefore,the level of budget and the way of budget allocation apparently affect team performance.We use the panel data from 1985 to 2011 in MLB. Compare with the literature,this article not only test the total team salary,but also test relative rank of team salary.In addition,we also use team goals at different stages to represent the team performance,such as total wins,winning percentage,into the playoffs,win the League Championship or World Series.The results pointed out that the team salary and average salary does have a positive impact on the team performance,which including wins and getting into the playoffs.And the higher degree of the salary variation have significant negative impact on team performance.Finally,the 1994 strike make MLB changes.