Here are the payrolls of the four LCS participants and the Yankees.
The actual disparity between the Yankees/Sox and the other teams is even bigger because both teams will have to pay luxury tax money and both teams spent a lot of money on posting fees that isn't included.
The Yankees have a ~40% payroll advantage over the Sox, but the Sox have a roughly 300% payroll advantage over the other three LCS teams.
From those teams perspective is there really much difference between playing a Yankee team with a 4-fold payroll advantage and a Sox team with a 3-fold payroll advantage? I don't think so.
On the other hand, if competitive balance was so critically important to the MLB powers that be shouldn't they be crowing about the fact that 3 teams in the bottom third of payroll are competing toe-to-toe with the behemoths from Boston and New York?
The Sox financial advantage flows down througout the organization, but I think it's most clear looking at the starting staffs for the four LCS teams. The Sox rotations is very much a rich team's rotation and the other three teams very much have small market developed rotations.
Beckett - On the trade market only to a team willing to take Mike Lowell's so-called albatross contract. That ridiculous miscalculation priced most teams out of the Beckett market.
Schilling - A veteran, expensive star player who used a no trade clause to restrict his availability to big market teams that were ready to win immediately.
Matsuzaka - 52M just to talk to the guy
Wakefield - finally a guy that anybody could afford
That's a big market rotation in every way.
Sabathia - 1st rd pick out of HS in 1998, a home grown ace signed to below market contracts
Carmona - signed as an inexpensive international free agent in 2001. A home grown co-ace, at least for this year.
Westbrook - Westbrook was acquired in 2000 in a prospect for veteran trade for David Justice. That's almost a classic small market-big market now for later trade except the Indians were quite good that year. Why the hell did they trade Justice anyway?
Byrd - signed a 2yr/14.25M contract prior to 2006. In the free agent market Byrd is a C+ kind of a pitcher. Better than the scrubs who get real cheap one year deals, but not quite good enough to get the standard 3 or 4 year grade B pitcher deal.
Francis - 1st rd pick out of C in 2002
Morales - cheap international free agent signed in 2002
Jimenez - another cheap international free agent, this one signed in 2001.
Cook - 2nd rd pick out of C in 1997
Due to thier ballpark and their previous huge blunders with Hampton and Neagle, the Rockies are highly motivated to produce thier own pitchers.
Webb - a lowly 8th rd pick out of C in 2000 who developed into an ace
Doug Davis - acquired from Milwaukee for Johnny Estrada. That's an odd, but creative deal between two small market teams that were both trying to make the leap into the playoffs and were able to find a complementary fit
Livan Hernandez - Hernandez was a short term, modestly priced (6M/yr for 1.5 yrs) salary dump from an even poorer team
Micah Owings - a 3rd rd pick out of C in 2005
Byrnes has been more creative than Shapiro and O'Dowd, but the rotation hangs on the homegrown ace.