Thursday, January 15, 2009

Why an MLB salary cap just doesn't work

An interesting, thought-provoking piece today from Shawn Hoffman of Baseball Prospectus. He tells why a Major League Baseball salary cap might sound like a great idea for small-market teams, but everything isn't always what it seems.

With a salary cap also comes a salary floor, which is usually around 75% of the cap.
Using 2008 as an example, the 30 teams took in about $6 billion (not including MLB Advanced Media revenue), for an average of $200 million per team. Forty-five percent of that (the players' share) is $90 million, which we'll use as the midpoint between our floor and cap. If we want to make the floor 75 percent of the cap (a low-end figure, relative to the other leagues), we can use $77 million and $103 million, respectively.
So teams like the small-market Pittsburgh Pirates, Florida Marlins and Milwaukee Brewers would have to spend at least that much. They would also no longer receive any of the revenue sharing that they've been using to fund portions of their payrolls - and, in some cases, their entire payroll.

Would it really be a good situation for bottom-of-the-barrel teams to be forced into signing overpriced veterans just to fill out their payroll?

A salary cap in baseball would also put an end to blockbuster mid-season trades where Team A trades three minor-league prospects to Team B for a $16-million-per-year player whose contract is about to expire. Or trading a guy and paying his entire salary, like the Red Sox did with Manny Ramirez. If you could do that with a salary cap, the Knicks wouldn't still have Stephon Marbury.

The only real way to fix the problem is for the small-market teams to win, which will bring the fans out, making the team more money, allowing high-priced free agents to be signed, which possibly can lead to more wins. (That hasn't been the case for the Yankees, who haven't won a World Series since they started spending like Paris Hilton.) It's kind of like a chicken-or-the-egg argument.

The only way to implement a salary cap is to basically blow every team up and have a draft. Every team starts from scratch and has a set amount they can spend. From a fan's standpoint that would be incredible, but it doesn't seem feasible.

So, in the end, we learn that there really isn't a solution to the problem. This, like the steroid scandal and a host of other issues, is something the MLB turned a blind eye to and could have fixed a long time ago, before the Rangers signed Alex Rodriguez, before the Giants signed Barry Zito, before the Yankees signed CC, AJ and Tex.

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