Why isn't there an MLB Salary Cap?

[chadomac]

Sorry if this is a dumb question, but I'd really like to know your thoughts on this. The NFL has it, and I believe the NBA does too, don't they? Why hasn't this idea ever come up... or has it?

[Fatter than Joey]

The union says no.

[hauser42]

Because the big markets dont care about the small markets and the players union really only cares about making the most money for its players.

[JimH5]

The Players Union is there to represent and bargain for the players. That's all. They're not responsible to the fans, media or the "good of the game". They're there to assure that the union members will get maximum value in salary and benefits with every labor contract.

 

The Owners have never convinced the Union that a salary cap wouldn't hurt the Union's members, and so they've never agreed to one.

[Kurt]

U N I O N

[AJAY]

Nothing gets me more fired up than this topic. There are a number of reasons why baseball has no salary cap . . .

 

1) The players union is against it and has gone on strike in the past. They have no principles and don't care about the fans. A bigger paycheck is more important to them than a level playing field, competitive integrity, and happier fans.

 

2) The public is too short-sighted to tolerate a long work-stoppage. They just see a bunch of millionaires fighting and don't really understand the issues. Ownership always feels pressure to cave in to please the public.

 

3) The national media is based out of the East Coast instead of places like Pittsburgh, Milwaukee, and Kansas City. There is less outrage over baseball economics in those bigger markets.

 

4) Too many stupid owners cave in during labor negotiations. Baseball revenue is less centralized than other sports so everyone only cares about themselves (or so it seems).

 

5) The banks that finance teams and ballpark construction don't like lost revenue from a work-stoppages. They have a lot of influence as well.

 

6) Large market owners don't want to be told that their spending can be capped. Many of them are too chicken to compete on a level playing field.

 

7) Baseball's business structure was created long before TV and radio existed. Other sports created their structures knowing much more about broadcast issues.

 

8) Other sports have less powerful unions because their unions are younger, their athletes have shorter careers and can't afford to strike, and because their union members are probably less educated (in my opinion).

 

9) Because television networks still prefer big market teams in the playoffs and will probably pay higher television rights fees.

 

10) Because all teams are profitable right now. There are some owners who don't care about winning and losing as long as their franchise is turning a profit.

 

11) Because the players believe owners will just pocket the savings rather than spread the wealth around. They are skeptical that poorer teams will spend the extra money on players.

 

12) Because baseball has tricky accounting mechanisms and some players don't trust the books.

[dadofandrew]

MLB is a $6B industry, and growing quickly. The union has always made a cap a no-go, and it has never been close to being implemented.

[sbrylski]

AJAY, if I ever have to write a paper for one of my economics classes and can pick my topic, you just outlined it for me. Thanks!

[logan82]

We couldn't even get a reasonable limit what teams pay in salary before a luxury tax kicked in.

[AdvantageSchneider]

I'd actually say that the Owners held down the player's salaries for so long, the owners never saw the need for a salary cap until the players finally got free agency and their salaries exploded(rightly so) and by then the players union was too strong and the owners couldn't get the genie back in the bottle.

 

The baseball owners never stuck together during the fat or lean times. The NFL and the NBA had to struggle much more. In my opinion the lack of a salary cap is just an indictment of baseball leadership 50-60 years ago than anything recent.

 

Baseball would have to get a get some sort of economic shock that would threaten it's survival to implement a salary cap, and with revenues at $6.2B I don't see that happening anytime soon.

[Kurt]

I mean, to the players credit.. they were treated like total crap for years and years...There was a point in the Late 80's-early 90's where I think it was balanced but now, obviously the players union is taking advantage of the owners.. I'm glad they can now make a good living but it's kind of out of controll... But how cool would it be to see Prince Fielder working in a junk yard in the off season?

[AdvantageSchneider]

The players are taking advantage of the owners? $6.2 billion my friend. That Billion with a B. What were the total baseball salaries last year for all the major league players combined? It was a lot less than $6.2 billion.

[logan82]

The players are taking advantage of the owners? $6.2 billion my friend. That Billion with a B. What were the total baseball salaries last year for all the major league players combined? It was a lot less than $6.2 billion.

Baseball employs many more people and has more operating costs than just player salaries.

[AdvantageSchneider]

Yes they do, but is there any doubt that the players salaries are the largest single expense the owners have?

 

Based on the numbers I found on foxsports, total baseball salaries last year were $2,478,790,987. That is less than half the owners revenues. Even if you assume that all other expenditures the clubs had were equal to the salaries they paid the players, the owners still cleared a billion dollars last year.

[logan82]

Does anybody remember what the stated cost of the games we hosted the Indians for was? I remember it wasn't an insignificant amount.

 

Edit: Where does the money for the minor league players come from?

[Platteville brewer fan]

AJAY, if I ever have to write a paper for one of my economics classes and can pick my topic, you just outlined it for me. Thanks!

 

Do not forget that if you look at it from an economics point of view that a salary cap makes less sense than no salary cap, due to the fact that really it is much more a free market than if you would have a salary cap/restrictions.

[Dmiles23]

Last year I had to do a project for school, and had the opportunity to sit down and interview Doug Melvin. He told me that 55% of their revenue goes into paying players. The big league club has to pay all the salaries of each minor league player, so that all adds up.

[Tbadder]

AJAY YOU ARE MY HERO! Used to be Roberto Clemente. Dude, are you channeling?

[I Heart Brewers]

I'll say this, (and I'm pro-salary cap), if the owners were not turning a profit they would not be in the baseball business - they make plenty of money.

 

Now with a salary cap they could create a better profit margin because salaries are their number one operating cost. But either way they are in the black (at least the larger market team owners are).

[logan82]

I am just trying to say that in many cases MLB clubs probably make less money than we think. I do not think a salary cap would be the way to go. Some sort of revenue distribution would be much better, but would probably cut down on revenue since there would be no incentive to bring in more money. Also if I recall one of the richer owner complaints was that teams like the Marlins don't use the money they get in salary tax distribution to pay their players. They just pocket the money and right now there is no way to stop that.

[sbrylski]

I'm with Logan. I think some more stringent revenue sharing would be more healthy for the game than a salary cap - though that will never happen either. A loose cap would be nice just to semi-hold down ticket prices too.

[Ennder]

Because salary caps havent' actually helped any sport in the past and baseball execs realize this. Luxery Tax is 100 times better than salary cap.

 

Here is what a salary tax accomplishes..

 

a) it doesn't help small market teams, marketing keeps FA's in the big markets

b) it doesn't make people sign with small market clubs, there are almost always reasons to sign in the big city regadless.

c) it doesn't promote fair salaries, players will generally take a pay cut to play in a better sponsered location

d) it doesn't promote player loyalty to teams. In general it promotes free agent movement since you can almost always get more money from outside sources.

e) it does not promote more competitve leagues, the NFL has not had more parity than MLB other than the smaller shedule letting more mediocre teams into the playoffs.

 

I have yet to see a single positive to the salary cap personally.

[Big Reed]

George Stienbrenner had an interesting take on why he spends so much money. I don't know how much truth is in this statement, but I do know it was from George. George claimed he spends so much money and brings in so many all star veteran players because the common New Yorker expects the yankees to be comprised of all stars. New Yorkers want their players to be "NAME" players. They want recognizable figures. George further pointed out that he has to field a team of name players in order to attract people and businesses to watch the Yankees. George fears that if his payroll were to dip below $100 million, and he was forced to play rookies and no name players, that he would lose a tremendous amount of revenue from ticket and TV sales. He claims that in order to get his cable deal done, he had to have a marketable team with marquis players.

 

I'm not sure I believe that BS, but at least it's sort of logical.

 

if you look at the history of baseball, you will see historically, baseball has always been a combination of the haves and the have nots. Babe Ruth was traded for CASH so the boston owner could finance his broadway play NO NO Nannette. before 1960, there was no college/high school player draft, and the best players all signed with the richest team. The Kansas City Athletics were known for giving the yankees some of their better players for little in return after developing them in their farm system. Roger Maris was one of those players KC gave to the Yankees. it's no wonder the Yankees won so many championships.

 

One equalizer in baseball came when some of the smaller market teams decided to sign Black players. By adding talented Black players, some smaller market teams were finally able to compete. This helped the Dodgers, Cardinals Giants and Braves overcome the big spending of the Yankees. I hate to use the term equalizer, because the Yankees were still far and away the best team in baseball. however, the other teams were at least a little more competitive and would steal a couple of world series away from the yankees.

[danzig6767]

Because salary caps havent' actually helped any sport in the past and baseball execs realize this. Luxery Tax is 100 times better than salary cap.

 

Here is what a salary tax accomplishes..

 

a) it doesn't help small market teams, marketing keeps FA's in the big markets

b) it doesn't make people sign with small market clubs, there are almost always reasons to sign in the big city regadless.

c) it doesn't promote fair salaries, players will generally take a pay cut to play in a better sponsered location

d) it doesn't promote player loyalty to teams. In general it promotes free agent movement since you can almost always get more money from outside sources.

e) it does not promote more competitve leagues, the NFL has not had more parity than MLB other than the smaller shedule letting more mediocre teams into the playoffs.

 

I have yet to see a single positive to the salary cap personally.

I have, in the NFL, the teams that win do it by being smarter than the teams who don't win, you can't just buy playoff berths via financial might.

 

Smaller market NFL teams don't have to trade off elite players on their roster once free agency hits those players. If Prince Fielder and say Braun were free agents next year, odds are high that the Brewers would be forced to lose at least one of them and quite possibly both to larger market teams that have vastly larger revenue streams. If they were Green Bay Packers, the only reason we couldn't sign both would be likely because the team hadn't managed it's cap well.

 

When really good players hit free agency in the NFL, there isn't only a handful of teams with the money to sign them. Look at Santana of the Twins, everyone already knows that he'll end up on either the Yankees/Dodgers/Red Sox/Mets/Angels. Brewers fans already are talking about which of our young players we'll have to lose as they reach free agency, these thoughts never have to enter the minds of Red Sox or Yankees fans. They need a CF or closer, just go out and buy one. Red Sox needed starters, go trade for Schilling/Beckett and pay them. Need another starter, give 50 million to a Japanese team just for the right to negotiate with Matsuzaka. It's laughable to think the Brewers can do that.

 

I've accepted this is how it is, but i sure respect more what the Patriots have done to be a champion than what the Red Sox did. The Patriots won by simply being smarter in building a better team than other NFL teams who had pretty much the same resources to work with. The Patriots don't get two times the size salary cap room to work with. In the draft, they don't get to pick a top 5-10 talent at the 30th pick simply because they can afford to pay any draft pick that they choose. The Patriots don't get to raid top players who are pending free agents off small market teams simply because they can afford anything they want.

 

The NFL system isn't perfect, but at least it's not set up where a handful of teams have an automatic fairly big advantage over the other 23 teams or so. There are no Red Sox or Yankees that can almost buy a playoff berth each year. The Patriots don't get a 150 million dollar salary cap and most of the other teams 75 million or less in their conference. Unlike the Red Sox, the Patriots like the rest of the league have to make tough choices on what players to pay and who to let go.

 

The Packers for years never had to worry about losing Favre to sign Reggie White. They not only had two of the best players in the game, they went out and signed other good free agents. That could never happen with the Brewers.

[SJgunny]

I think a cap is a good idea. The NFL is the best at it. Look when the season started, did you know what teams would be good year after year. Know one ever knows which teams will win or not because all teams are so even. Look at the NFC how many temas are 5-6 now 5-6 is not great but thye are even. In baseball Red Sox, Yankees are always good but have payrolls of hundreds of millions. Arod gets paid when the marlins pay most of thier team. This is not fair. And the teams like the Brewers who have great young talent, will they be able to keep them over the long haul because of the market? Look at J Santana from Mnnesota, they have to trade him cause he wants 126 million, And who is in on those talks Red Sox,Yankees,Angels should it not be equal for all teams be able to keep the good players so everyone has a chance to win? Sure Colorado was in WS but its not like football for the most part have a different winner every year. The luxury tax has made it closer but I think they need more.