Nobody complains more about the current pay structure in Major League Baseball than Dejan Kovacevic. He writes for the Pittsburgh Tribune-Review sports department, and is a knowledgeable, reliable source for Pirates and Penguins information, so he is a great follow on Twitter, but every once in a while, he will talk about inherent advantages teams like the Yankees have, and how unfair baseball is. He is an ardent proponent of instituting a salary cap to ensure all teams have a fair shot going into every season.
As a man who works in the city that is buoyed by the Steelers and Penguns, I can see why he thinks that a cap is the way to go, particularly since the least successful team in American sports of the last 20 years resides in western PA, and is the only one that doesn’t follow the cap structure. The thing is, there is no way that a salary cap would be workable in MLB.
There are two primary factors that would render the league incapable of instituting a salary cap: MLB Players Association, which is the strongest union in American sports, and the high revenue teams. Let’s envision the league and players agreeing that a salary cap could be instituted. The players, as they did in the NHL, would ensure there would be a salary floor, as well, and the Cap would be set at a predetermined percentage of MLB’s revenue. In 2010, that revenue was 7 billion dollars. Let’s work from that number, and the original numbers that the NHL set for their cap and floor. That was 57% of revenue, and a 20% window on either side of that number.
That gives us a cap of 159.6 million dollars, and a floor of 106.4 million. Right now, that window includes 6 teams (including, ironically, both World Series teams) and the floor is greater than 21 teams. The floor is 43 million dollars greater than the Pirates’ current payroll.
The other issue is the teams. It’s not the small teams to worry about, it’s the Yankees and Phillies and Red Sox. They will continue to make more money than the rest of baseball, and their revenues will increase, thanks to a lower payroll. Given how much the teams already complain about luxury taxes, I can’t imagine they would be too keen on revenue sharing either.
What is the end result? Well, you end up with a league that is falling apart like the NHL. Wealthy teams keep getting richer, poor teams keep getting poorer, and nobody wants to do what it takes to fix it.
A salary cap isn’t the solution, and payroll inequality isn’t even the issue. The Tigers and Giants are meeting in the World Series, less than 10 years after they were both sub .500 teams with little or no hope. They didn’t get back to the World Series on the back of high payroll… that came after they turned it around. They had high revenue after they started winning. The same goes for the Twins, the Nationals, any mid-market team that is now winning. This is why the Mets pay so much less than the Yankees. The Mets don’t win, so they don’t make money, so they don’t pay players. High payroll comes after winning.
But how is that possible? The league has set rules in place that allow young talent to remain under team control for 6 years of major league play. If a player makes his way to the Majors at 25, he will be with a team until he his 31. With good development, scouting and drafting, teams can maintain talent in house and have those players right up to and maybe even through the prime of their career. High salaries tend towards players who are on the back side of their career with waning talent and exorbitant salaries. Sure, they are known commodities, but a player on the downward slope of their career is likely about as valuable as a player on the upward climb.
Well run teams win. Payroll matters, to be sure, but only if it is wielded effectively. This is why moneyball is a thing. This is why the A’s and Reds and Orioles made the playoffs. This is why the Pirates aren’t any good. They can’t develop any talent in house. They are a joke. Dejan Kovacevic said so himself.
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