Is it time to establish a salary cap in the MLB?

[chickinbrickin]

I think the spending in the MLB is starting to get way out of control, and it is going to start ruining the game if something doesn’t happen soon. Now that the Dodgers, Blue Jays and Cubs are joining the spending spree; $130 million+ payrolls are becoming the norm. The small market teams always needed to be more careful than the clubs with deep pockets, but now a bad signing could sink a small market team for years.

 

I have always despised this aspect of the game, but I could deal with it when it was just the Yankees and the Red Sox dishing out tons of money to compete with each other. Now it is just getting ridiculous.

[monty57]

A) A salary cap won't happen. The Union will be 100% against it, and the ownership would only be about 50% for it, as the teams with the payroll advantage wouldn't want to lose it.

 

B) The biggest thing that would even the payrolls in baseball would be for the teams to split all the TV money. Again, owners won't agree on this, so I doubt it will happen.

 

C) What I see as a big "equalizer" in the future is that internet revenues and MLB Network revenues are (I believe) split evenly among teams. I can't see the future, but I'd bet that within the next decade or so, all TV will be viewed in some way from the internet streamed into your TV, and I'd bet MLB will make sure that MLB Network is the one airing all the games. MLB will greatly increase their revenue, and it will be split among all the teams. If I'm in any way correct on this, it makes sense that so many stations in the big cities are signing huge, long-term deals with teams. That could be the last deal they'll sign.

[jerichoholicninja]

No. Baseball isn't like football or basketball where almost 100% of your payroll goes into your "big league" team. If there was a salary cap, teams like the Yankees, Dodgers, Red Sox, etc. are still going to spend as much money as before, it's just going to be allocated differently. Most likely to scouting and development which means the small market teams that HAVE to spend money in those areas are going to have to spend more to compete anyway. We might as well let the big teams blow money on aging vets in free agency that eventually become a burden instead of having them spend it in scouting and development where they would actually be making a very sound investment.

[brewcrewdue80]

Big market teams can afford those payrolls. Reducing what they pay only makes owners more money which the Players wont be happy. I can only think that deals with money bonuses? that don't count on payroll then becomes the determining factor. Here's 4/44mil and a 40mil signing bonus! So there in the big markets run out the small markets anyhow. Yankees make more money on their tv market deal ALONE than what the bottom 20teams in MLB are spending for payroll. Add to it these small market teams are alread having money "Shared" to them by the big spenders that allows them to even approach what they do spend.

 

You want a real answer? Retraction. Remove the ten lowest markets from the equation and life goes on. Retraction will happen long before a salary cap does. it just doesn't work with baseball.

[Bombers]

The only way for a salary cap to be introduced into MLB would be through a lawsuit. As the above posts mention, the players union would be 100% against it. And your owners would only be 50/50 at best for it.

 

Getting a salary cap introduced was tried in 1994 and resulted in no post season. http://en.wikipedia.org/wiki/1994_baseball_strike ... But I do believe the only way to introduce a salary cap into baseball will be through a lawsuit.

 

With a lawsuit filed against MLB, you could argue the anti trust law (commonly referred to as the competition law) is being broken. (Going to court has already been done though - but mostly for getting free agency introduced) ... MLB’s anti-trust exemption comes from a 1922 Supreme Court decision (http://en.wikipedia.org/wiki/Federal_Baseball_Club_v._National_League). It was upheld again in 1952 and then again in 1972.

 

On the wiki page about salary caps i found this note: http://en.wikipedia.org/wiki/Salary_cap

A number of the small market teams, notably the Milwaukee Brewers, have called for the introduction of a salary cap, but any introduction is opposed by the MLB players' union and the Yankees' ownership group; the latter have threatened legal action if such a cap is implemented.

 

One could argue that MLB is creating a competitive disadvantage and thus a violation of the anti-trust law. Buyer beware, you will be heading to court against MLB and the Yankee owners group. So good luck. Having said that, I do believe with where we are at today the supreme court would probably look at this differently. (Look at how much sports have changed in the past 40 years) ... In the end, I believe some type of cap is inevitable and will be done at some point. Just a matter of how and when.

 

I do like Monty57's idea about MLB Network owning the rights to all the games and then re-selling them to local stations. MLB would then own 100% of the TV/internet money and would be able to distribute that on an even field.

[RightFieldCoder]

I don't want a salary cap. I want 100% revenue sharing of the TV contracts. That is what causes the imbalance.

[endaround]

1) I don't get the complaining about this off season. Almost every contract was in line with expectations or below. Those that weren't are overpaying for relievers which always happens.

 

2) Baseball has a salary cap. The Yankees are dealing with it right now. The fact that it hasn't brought on huge changes might make people rethink the idea of a salary cap solving things. But probably not.

[Invader3K]

I'm convinced a hard salary cap in MLB just wouldn't work, for many of the reasons already laid out in this thread. MLB is very different from the NFL, NBA, etc.

[Bombers]

I don't want a salary cap. I want 100% revenue sharing of the TV contracts. That is what causes the imbalance.

I agree this would be a step in the right direction

[Ennder]

More can be done with revenue sharing etc but a hard cap would be just awful in baseball. A hard cap is just a bandaid fix in the first place and there is no way the players would go for it. I think you are also looking at the problem the wrong way to begin with, just because teams spend money doesn't mean they have a huge advantage. The cost per win of a FA is so colossally high that building a team by throwing tons of money at players is just completely inefficient. I'm not even sure the Dodgers or Angels have playoff teams this year as an example.

 

To use the NBA as an example. It will be harder for the Bucks to build an elite team than the Brewers even though the NBA has a salary cap. No big name player wants to come to the Bucks unless they grossly overpay so the only way to get the star players they need is to get really lucky in the lottery of the draft. A salary cap doesn't just magical fix competitive balance in sports.

[nate82]

More can be done with revenue sharing etc but a hard cap would be just awful in baseball. A hard cap is just a bandaid fix in the first place and there is no way the players would go for it. I think you are also looking at the problem the wrong way to begin with, just because teams spend money doesn't mean they have a huge advantage. The cost per win of a FA is so colossally high that building a team by throwing tons of money at players is just completely inefficient. I'm not even sure the Dodgers or Angels have playoff teams this year as an example.

 

The only way the players union would accept a salary cap is if there was a salary floor and teams like the Rays and the A's would not be able to survive without a lot more revenue sharing which means less to the Brewers and other teams. In the end there would still need to be more revenue sharing even with a salary cap as there would have to be a floor and I am going to assume that the floor would be around $80-90m.

 

More revenue sharing is the answer for MLB not a salary cap.

[Bombers]

More can be done with revenue sharing etc but a hard cap would be just awful in baseball. A hard cap is just a bandaid fix in the first place and there is no way the players would go for it. I think you are also looking at the problem the wrong way to begin with, just because teams spend money doesn't mean they have a huge advantage. The cost per win of a FA is so colossally high that building a team by throwing tons of money at players is just completely inefficient. I'm not even sure the Dodgers or Angels have playoff teams this year as an example.

 

To use the NBA as an example. It will be harder for the Bucks to build an elite team than the Brewers even though the NBA has a salary cap. No big name player wants to come to the Bucks unless they grossly overpay so the only way to get the star players they need is to get really lucky in the lottery of the draft. A salary cap doesn't just magical fix competitive balance in sports.

I think using the NBA is a bad example. Star players won't come to Milwaukee with or without a salary cap or a salary floor ... The NBA is the only league where one player can dominate a game. Those star players know that and levitate to big markets to maximize their marketability. I believe baseball should try to mirror football and reward teams who draft well and occasionally spend when needed.

 

I guess in the end I am just tired of the direct impact spending has on making the playoffs. There is clearly a competitive disadvantage.

[Ennder]

I believe baseball should try to mirror football and reward teams who draft well and occasionally spend when needed

 

The NFL just is so different that it is hard to compare. When was the last time a big name FA came to GB in football. The reason I didn't copy football though is more that the leagues are so completely different. FA is just not a big part of the NFL because players careers are too short and single players just don't make enough of an impact outside of the QB. The NFL is structured such that good teams can pay less to keep their players and bad teams flounder around and have no choice but to rebuild through the draft. It is pretty rare for a bad team to turn into a good one in football unless they pick up a franchise QB in the draft. Parity is more about an unbalanced short schedule than anything, if you look at long term success of teams in football there are pretty clear haves and have nots. The haves are the teams with the great QB, the have nots are everyone else outside the two or three teams with truly great defenses.

 

On top of this there is no minor league feeder system in the NFL. The structure of a salary cap would have to be wildly different from what we've seen in any other sport. Personally I don't think the salary cap really works in the NFL either but that is probably a discussion for another day. None of this matters because the player's union is too strong in baseball to ever have a cap.

[Invader3K]

The NFL just is so different that it is hard to compare. When was the last time a big name FA came to GB in football.

 

Reggie White, and that's basically it.

[DHonks]

in MLB, payroll does not equal wins.

 

I'm concerned about revenue streams. I think MLB needs to increase the sharing of local media money just as it centralized the funds from Sirius XM and the internet.

[sveumrules]

Just looking at the "Modern Brewers Playoff Era" here is a list of playoff teams with their rank in team salary and a WSC for each year's World Series Champion. I just bounced back and forth between bref.com for playoff teams and stevehump.com for salary info if anyone wants to go back through the whole wild card era that can crunch the numbers more effectively that myself.

 

2012: NYY (1st), DET (5th), TEX (6th), SF (8th, WSC), STL (9th), ATL (16th), CIN (17th), BAL (19th), WAS (20th) & OAK (29th)

 

2011: NYY (1st), PHI (2nd), DET (10th), STL (11th, WSC), TEX (13th), MIL (17th, we were 10th in 2012 for reference), ARI (25th) & TB (29th).

 

2010: NYY (1st), PHI (4th), SF (10th, WSC), MIN (11th), ATL (15th), CIN (19th), TB (21st) & TEX (27th).

 

2009: NYY (1st, WSC), BOS (4th), LAA (6th), PHI (7th), LAD (9th), STL (13th), COL (18th) & MIN (24th).

 

2008: BOS (4th), CHW (5th), LAA (6th), LAD (7th), CHC (8th), PHI (12th, WSC), MIL (15th) & TB (29th).

 

Make of it what you will but the info above seems to indicate that while outspending everyone else by a wide margin is a pretty effective strategy (NYY), ultimately what matters the most is being a well run organization. For instance Texas making it the last three years ranking 27th, 13th and 6th. Having a higher payroll ultimately really only increases your margin for error, it doesn't guarantee success in and of itself.

[chickinbrickin]

I should have titled this thread a bit differently. I too think a cap wouldn't really work. There just needs to be more revenue sharing of the large TV contacts.

 

Also, no one is saying a large payroll guarantees anything. Now with more teams spending huge money on payroll it is going to get harder and harder for the small markets to compete. Yes, there will be the occasional playoff appearance for a Baltimore, Pittsburg, or Milwaukee but they will be few and far between.

 

One bad free agent signing for a large market team is just a drop in the ocean. One swing and miss in a small market probably cripples the team for 5 years.

 

IMO, big spending in baseball is bad if only a handful of teams can afford to do it.

[Bombers]

The NFL just is so different that it is hard to compare. When was the last time a big name FA came to GB in football.

 

Reggie White, and that's basically it.

Charles Woodson ... but that's the point. Building through free agency does not have a direct impact on making playoffs. In MLB, it does.

[DHonks]

bombers, that's a bad example. As was noted in a major article last year, Woodson only came to Green Bay because they were the ONLY team willing to give a multi-year deal. He now loves it, and it's changed him as a person.

[nate82]

Charles Woodson ... but that's the point. Building through free agency does not have a direct impact on making playoffs. In MLB, it does.

 

No it doesn't because if that were true then the Angels would have made the playoffs last year right? The Angels spent a lot last off season and did not make the playoffs and they wouldn't have even came close to the playoffs if it were not for Mike Trout having an MVP like year as a rookie. The same can be said about the Red Sox who gambled everything on Crawford, Lackey, and Gonzalez yet they did not make the playoffs.

 

In MLB the correlation between spending in FA and making the playoffs is rather small. It only gives a team a very small percentage increase on making the playoffs. Teams that are spending in FA are normally teams that are already playoff teams or teams that have holes that they can not fill from within their organization.

 

There is already a cap in baseball set right now and the Yankees are looking to get under that cap. Next year the Yankees are looking to get under the 189m cap that MLB has set as the penalties for going over it grows for every year that you are over that cap. Next year the Yankees may possibly lose both Cano and Hughes in FA if they are serious about being under that cap. If Hughes has a good year I could see the Yankees losing out on him as he will be the 2nd best pitcher available in FA behind Garza unless Lincecum somehow comes back to his pre 2011-12 form in 2013. The Yankees will actually have to trade players away or go over the cap as I don't see how they are going to be able to sign both or one of Can or Hughes and stay under the cap. You can even go to this year and see that the cap is having an impact on the Yankees spending as they did not even attempt to counter the Pirates offer for Martin. In the past the Yankees would have just pushed the price up so a team like the Pirates would not be able to sign a player.

 

I don't believe anyone would really like a true cap like what the NFL has as it will come with more restrictions and there still would be a disparity in the teams as the bigger market teams will still land the majority of the FA while still being richer in terms of development of players. With a cap like the NFL's you are going to have a floor like the NHL's which is now in a labor dispute because the smaller market teams are not able to compete with the bigger market teams because of the salary floor. This would happen in baseball and contraction would have to be done which means teams like the Brewers, Rays, A's, Royals, and the Indians would all have to be contracted for a salary cap to work in MLB. Enjoy being a fan of another team because a salary cap in baseball would mean the end of small market teams as there would be a salary floor that the small market teams would not be able to sustain every year.

[Bombers]

Charles Woodson ... but that's the point. Building through free agency does not have a direct impact on making playoffs. In MLB, it does.

 

No it doesn't because if that were true then the Angels would have made the playoffs last year right? The Angels spent a lot last off season and did not make the playoffs and they wouldn't have even came close to the playoffs if it were not for Mike Trout having an MVP like year as a rookie. The same can be said about the Red Sox who gambled everything on Crawford, Lackey, and Gonzalez yet they did not make the playoffs.

 

It isn't 1:1 and you will always be able to find an example where it didn't work. but as shown above it has an affect. I am on the side that I think it is negatively impacting the competitive balance. I think it is beyond unfair to allow teams like the Yankees to set an all star team lineup which were mostly all bought.

 

 

I don't believe anyone would really like a true cap like what the NFL ...

 

I agree it won't be apples to apples but MLB needs to do something. You state teams not being able to keep star players that is already happening and has been happening for years. The only way to keep a star player is to get him to sign in year 1 like Braun.

[Ennder]

Make of it what you will but the info above seems to indicate that while outspending everyone else by a wide margin is a pretty effective strategy (NYY), ultimately what matters the most is being a well run organization. For instance Texas making it the last three years ranking 27th, 13th and 6th. Having a higher payroll ultimately really only increases your margin for error, it doesn't guarantee success in and of itself.

 

 

It is also useful to note that those stats showed selection bias. Teams who are not competitive trade away salary mid season and teams who are competitive tend to trade for salary mid season. Things are actually more balanced than those numbers suggest and those numbers weren't horribly unbalanced to begin with. The game can be improved for sure but the difference in salaries per team is not this huge monster in the closet that people like to make it out to be either.

[torts]

there will be no cap until after 2016, the MLBPA will never consent to amending the current CBA to put a cap in place, and even when the contract expires and they are negotiating a new CBA, a salary cap will never make it onto the final voted Agreement.

[Bombers]

Thanks to Adam McCalvy for tweeting out the link to this article by Maury Brown.

 

http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=5775:biz-of-baseball-releases-comprehensive-mlb-final-player-payroll-figures-for-last-14-years&catid=26:editorials&Itemid=39

 

I went through and highlighted all playoff teams for each year, he had analysis for. Here is the breakdown for top 15 in spending vs bottom 15 in spending for each year.

Year - Teams in the Top 15 - Teams in the bottom 15

2012 - 6 - 4

2011 - 5 - 3

2010 - 4 - 4

2009 - 6 - 2

2008 - 7 - 1

2007 - 5 - 3

2006 - 5 - 3

2005 - 7 - 1

2004 - 7 - 1

2003 - 5 - 3

2002 - 6 - 2

2001 - 6 - 2

2000 - 5 - 3

1999 - 8 - 0

 

So over the past 14 years of salary data; there hasn't been 1 year where more teams who were in the bottom 15 of spending made the playoffs over their counterparts who were in the top 15 in spending. Not 1. (They came close in 2010 where it was split 4/4) ... This just screams parity.

 

I love 1999. 6 of the top 8 spending teams made the playoffs. Awesome.

 

Rename the thread to, Does spending cause an unfair balance of teams making the playoffs? Call it, Can the Yankee's continue to buy their way to the post season, again? Call it, spending money, making playoffs and beating off trim ... I really don't care. But in the end, there is clearly a problem - whether you want to admit it or not.

[Ennder]

But again you are ignoring the selection bias. Teams in a position to make the playoffs add salary, those that are not in the position cut salary. Last year the Marlins had a top 15 salary and when it became clear they would not make the playoffs they cut salary to the point of being in the bottom 10. This was a team that was the biggest spender in the off season but probably fits in the bottom 15 list. This is also kind of a goofy way to look at things in the first place since the difference between the 8th highest payroll and the 20th most seasons is miniscule. Nobody complains about the 14th highest payroll in baseball having a competitive advantage, it is really just the top 4 or 5 that get the complains.

 

The mid 2000s were definitely a dark time, it was before a lot of the revenue sharing was really impacting things and when the teams could basically just ignore the luxury tax. I think the past 3 years showing a 15-11 ratio says a lot. If baseball can keep things so that somewhere around that ratio stays it is in a good place. Also a salary cap is one way to change things and it causes a load of problems of its own. There are other ways to adjust the game and they have been doing it for a few years now. I think those results show they are on the right path if anything.