Does MLB need to implement a salary cap?

[Akhilleus]

Every one of the big North American professional sports has a salary cap. The NFL has one, the NBA has one, the NHL has one, and...oh wait, it turns out that there is one league that doesn't enforce a salary cap. Major League Baseball.

The MLB has never enforced a salary cap, and it will likely be a long time into the future before they will. Does that mean that they shouldn't try to get one passed through? No, because it's needed. If an owner has enough money in their pocket they can figuratively go out and buy a World Series. Having a salary cap would make the league just so more exciting, and the off-season even more exciting. So far the off-season has been going on for about four months, and the Yankees have signed Tanaka, Kelly Johnson, Brian Roberts, Matt Thorton, 7x Allstar Brian McCann, Allstar and 2x World Series champ Jacoby Ellsbury, and 8x Allstar Carlos Beltran. Now I am definitely not saying Kelly Johnson, Brian Roberts, and Matt Thorton are huge and expensive free agent steals, although even them I can't see being signed all in one go by a team like the Royals. Yet Beltran, McCann, and Ellsbury are all huge.

Granted, they lost Robinson Cano, Mariano Rivera is gone, and having Alex Rodriguez suspended for the year freed up some money as well, but they still have not only the highest payroll in the league but also the highest average salary. Let's take a look at what some of the big signings by the Oakland Athletics so far into this off-season were...Jim Johnson. That's about it as far as big names go. They also signed pitcher Scott Kazmir, who had a 4.04 ERA last year, so he was a huge pull in. And this was after losing Grant Balfour, Jemile Weeks, Kurt Suzuki, Brett Anderson, Chris Young, and Scott Sizemore. Most of those guys were a big part of their starting roster.

Now the Yankees needed to go out and sign the guys that they did. I understand that, but what I am saying is how many teams can go out and do the same? The Padres need to sign a lot of guys too, but they can't even afford to bring in one of the players that the Yankees have done this offseason. Really, they would be lucky to have gotten Kelly Johnson. Every time the Yankees sign one of their players, they're outbidding a team that couldn't afford him because they have a smaller payroll. With a salary cap it restricts what high payroll teams can do.

No, having a high payroll doesn't always equal success, and vice versa. The Phillies have the second highest payroll in the league behind the Yankees, and they finished second to last in their division. The Athletics have the second lowest payroll in the league, and they won their division. That doesn't mean that those payrolls don't play an impact though. We've all seen the movie Moneyball, so we know how great Billy Beane is at running that Oakland club and making his payroll work. Yet they still haven't been able to get to the World Series yet. It is one thing having a high payroll, but when teams like the Yankees and the Yankees of the West (LA Dodgers) can go out and buy every single player it just get frustrating for other clubs and their fans. If a salary cap restricted player salaries it would lead to their owners using that money elsewhere. Decreasing ticket prices, improvements to stadiums, better Gameday giveaways?

The luxury tax system hardly makes a difference, and that shows when the Yankees blow past it every year. I get that the lack of salary cap makes the MLB unique, but at the same time it's the biggest flaw. The MLB is actually one of the most perfect and working leagues compared to the other three, with PEDs being one of its biggest public problems. PEDs will never be fully be solved, but the salary cap can.

The thing is, even if I managed to convince everyone that the salary cap needs to be installed, it will never happen. Even if the league wanted it to, even if the owners wanted it to, the players would never agree. That is what the huge issue was during the '94-95 strike. The owners tried to get it in, and the players threw a fit. Why? Because that's less money away from them. How dare they propose that they make only 100 million dollars instead of 250 million dollars? How will they ever get by with only that much money? If the owners once again tried to institute a salary cap there is no doubt that once again a strike would occur, and the league really can't go through that damage again. The last strike led to the demise of the Montreal Expos, and there is no doubt that something just as damaging could happen again. It is just an all around bad situation to work around, which makes it seem worthless to try and fix, but is it? Or is it an important enough change that could be worth fighting for by the owners once again?

 

[Megatron]

No, because it's needed.

It's really not needed, but I'll bite.

If an owner has enough money in their pocket they can figuratively go out and buy a World Series. Having a salary cap would make the league just so more exciting, and the off-season even more exciting.

MLB Hot stove is clearly the most active/exciting offseason of any of the 4 major sports. NFL teams rarely let their big stars go or make big trades, NBA has some activity but unless it's like the 09 summer (or possibly this upcoming summer) there isn't nearly as much buzz surrounding it. Tell me, when is the last time a big name quarterback made it onto the free-agent market that wasn't for injury-related reasons? The only one I can think of in the last decade is Favre, and that's only because he couldn't decide on whether he wanted to hang it up or not. The last thing MLB needs to worry about is having an exciting offseason.

So far the off-season has been going on for about four months, and the Yankees have signed Tanaka, Kelly Johnson, Brian Roberts, Matt Thorton, 7x Allstar Brian McCann, Allstar and 2x World Series champ Jacoby Ellsbury, and 8x Allstar Carlos Beltran. Now I am definitely not saying Kelly Johnson, Brian Roberts, and Matt Thorton are huge and expensive free agent steals, although even them I can't see being signed all in one go by a team like the Royals. Yet Beltran, McCann, and Ellsbury are all huge.

Johnson/Roberts/Thornton combined 2014 salary = 8.5 million (with only Thornton being signed for 2015 for 3.5 million more.)

Omar Infante 2014 salary = a little over 7.5 million (with 3 more years after that)

The Royals could definitely have afforded those three if they wanted them, but Infante is much more of a sure thing than the two of the second basemen and is a better player.

Granted, they lost Robinson Cano, Mariano Rivera is gone, and having Alex Rodriguez suspended for the year freed up some money as well, but they still have not only the highest payroll in the league but also the highest average salary. Let's take a look at what some of the big signings by the Oakland Athletics so far into this off-season were...Jim Johnson. That's about it as far as big names go. They also signed pitcher Scott Kazmir, who had a 4.04 ERA last year, so he was a huge pull in. And this was after losing Grant Balfour, Jemile Weeks, Kurt Suzuki, Brett Anderson, Chris Young, and Scott Sizemore. Most of those guys were a big part of their starting roster.

They also didn't have nearly as many holes to fill as the Yankees, seeing as how they made the postseason for a second straight year. Don't forget Coco Crisp (who's been a good player for them) signed on for a one year deal. It's been clear for a long time that they have a much different philosophy than the Yankees and it's worked for the most part.

Now the Yankees needed to go out and sign the guys that they did. I understand that, but what I am saying is how many teams can go out and do the same? The Padres need to sign a lot of guys too, but they can't even afford to bring in one of the players that the Yankees have done this offseason. Really, they would be lucky to have gotten Kelly Johnson. Every time the Yankees sign one of their players, they're outbidding a team that couldn't afford him because they have a smaller payroll. With a salary cap it restricts what high payroll teams can do.

Kelly Johnson contract = 1 year/3 Million
Joaquin Benoit contract (who signed with the Padres) = 2 year/15 million

If you're going to make these comparisons, at least make sure they're accurate.

And I guess we can just ignore the Mariners (who're probably in the mid market range) signing Cano, or the Twins dishing out a combined 73 million for two players, or the Brewers getting Garza for 4/52 and Lohse for 3/33 last year, or the Cards (who are sligthly above average in payroll compared to the rest of the league) getting Peralta for 4/53, or the Indians getting Michael Bourn and Nick Swisher for a little over 100 million last year, or ...

Just because the Yankees got the highest contracts doesn't mean they are the only ones spending money or are the only team to make the highest bid. Last year they didn't sign anyone to more than 15 million, and that was only because of arbitration owed to those players (and thus weren't FA's in reality).

No, having a high payroll doesn't always equal success, and vice versa. The Phillies have the second highest payroll in the league behind the Yankees, and they finished second to last in their division. The Athletics have the second lowest payroll in the league, and they won their division. That doesn't mean that those payrolls don't play an impact though. We've all seen the movie Moneyball, so we know how great Billy Beane is at running that Oakland club and making his payroll work. Yet they still haven't been able to get to the World Series yet. It is one thing having a high payroll, but when teams like the Yankees and the Yankees of the West (LA Dodgers) can go out and buy every single player it just get frustrating for other clubs and their fans. If a salary cap restricted player salaries it would lead to their owners using that money elsewhere. Decreasing ticket prices, improvements to stadiums, better Gameday giveaways?

The playoffs are a notorious crapshoot. The Tigers made the World Series last year after winning only 88 games. The Cardinals won a World Series after winning something like 84 games. Judging the success of these teams on World Series wins rather than playoff appearances is short sighted. What a team does in a 162 game regular season tells you a whole hell of a lot more than a 5 or 7 game playoff series.

A salary cap wouldn't increase the competitive balance. These stats (while a few years old) show this:

From 2001-11, 14 teams made the World Series with 9 different champions. The NFL had 14 teams make the Super Bowl with 7 different champions. The NBA had 10 teams make the Finals with 5 different champions.

And the only thing reducing players salaries would do is save more money for the owners, which I'm not for. This article here addresses your ticket sales/stadium funds argument:

To pre-empt another populist argument in favor of salary caps, no, increased player salaries don't lead to increased ticket prices. There's no meaningful relationship between the two, as study upon study has proved. Ticket prices are determined by consumer demand. If teams could raise prices every time they needed to pad their revenues, then let's just say the cost of game tickets would be a lot higher. Ticket prices increase when there's a willingness -- or perceived willingness -- on the part of fans to pay more for them.

The luxury tax system hardly makes a difference, and that shows when the Yankees blow past it every year. I get that the lack of salary cap makes the MLB unique, but at the same time it's the biggest flaw. The MLB is actually one of the most perfect and working leagues compared to the other three, with PEDs being one of its biggest public problems. PEDs will never be fully be solved, but the salary cap can.

It's not a flaw at all. Players shouldn't be forced to have their salaries reduced when the first 6 years of their careers are very cost controlled. If they're able to get a 100/150/200 million deal, more power to them. I'm not going to give sympathy to the owners for dishing out some cash. It doesn't need to be fixed. Small/mid market teams have shown they can spend money as well and that they can build a team a different way (through the draft/developing players and trading for more prospects). There's more than one way to win in MLB.

How dare they propose that they make only 100 million dollars instead of 250 million dollars? How will they ever get by with only that much money?

You clearly don't understand how MLB contracts work for the players early in their careers. Mike Trout, clearly a top 5 player already, will be working for peanuts this year. With teams revenues increasing yearly with the new TV contracts, why shouldn't the players look for more? You have to get paid when you can, and I'm certainly not showing any sympathy to billion dollar owners spending some money out of their pockets.

It is just an all around bad situation to work around, which makes it seem worthless to try and fix, but is it? Or is it an important enough change that could be worth fighting for by the owners once again?

This isn't a broken system. I could go on and on how numerous players from smaller markets signed big extensions to stay with their teams for the forseeable future. Joey Votto, Joe Mauer, Andrew McCutcheon, Evan Longoria, etc. all haven't (and won't) made it to free agency. Just because a team like the Pirates isn't spending like the Yankees doesn't mean they aren't spending money. While I'm sure the owners appreciate you looking out for them saving what is essentially peanuts, but I'm much more in favor of players actually getting some compensation after getting very little to start their career.

 

[CH David]

You've got teams like the Astros and Marlins spending less than $50 mil a year total to be awful, get higher picks in the draft, and more money from the league to use on said picks plus international spending. Astros are trying to get better, Marlins are just under shitty management. Teams are getting a ton of money thanks to new network tv deals, and they can spend it however they want. Mariners got Cano, Dodgers gave Kershaw a huge extension, Yankees pulled a Yankees.

Teams can have guys under team control, generally until they are 29-30 years old thanks to arbitration years, and that's when they hit free agency. You've also got the whole qualifying offer/draft pick compensation situation there. Is the money getting to be obscene? Yeah, but you know what, sign your core guys to long term deals and then bring up guys from the minors to fill out the roster if needed. Teams can get by, and owners/players aren't complaining.

 

[Papa Pillman]

What wasn't mentioned in the original post is the logistical problem created by attempting to implement a salary cap in baseball.

The reason it is easier for leagues like the NBA and NFL to have salary cap systems is because the revenue sharing can be worked out in a more fair way. Why? Because the bulk of the money the league brings in comes form their multi-billion dollar television broadcast deals that can be divided fairly amongst franchises. Most of MLB's money also comes in through the television broadcast deals as well, the difference is the vast majority of that money comes from deals that teams negotiate themselves with their own local TV options. That is why teams in larger markets have more money, they are able to land much larger local TV deals. MLB can't in good conscience expect those teams to then turn around and split that money evenly with their competition. That money is being paid to them for their own product, not the league product as a whole like in the NFL for example.

So the logical way to take care of that problem is the luxury tax. A team can spend all it wants as long as it realizes that if it is willing and able to spend to a certain degree above what the league deems reasonable, then it must also share some portion of that wealth for the good of the overall game. The current luxury tax situation is no where near perfect and should continue to be tweaked, but it makes far more sense logistically than attempting a salary cap system would.

As evidenced by contracts that smaller market teams like the Reds(Joey Votto) and Twins(Joe Mauer) were able to shell out to keep their MVP caliber stars, new local television deals across the league that are on the rise are flooding enough money into even the lesser markets to attempt to even the salary gap. Every team in the league that has signed a new local TV deal in the last 3-4 years have received a massive upgrade in media compensation, and that trend will continue for every franchise as their current deals expire. That league-wide influx of new income, combined with a better luxury tax system, and hopefully a resulting salary floor, could have some of the same desired effects a salary cap system could have, while making much more sense when aligned with MLB and its team's primary revenue outlets.

 

[Akhilleus]

You guys all make some very good points, and maybe I'm a little bit more convinced that a salary cap isn't the most important thing to bring to the league. It does seem like it would bring a lot more trouble than it would solutions. There probably would be more of a negative result from the salary cap than there would be a positive one. Teams like the Pirates and Athletics have proven you can get by with a low budget, while teams like the Phillies have proven you can fail with a high budget.

I hadn't even thought of the tv contracts, and that is one of the things I love about the MLB compared to say the NFL. The fact that teams have their own announcers, and their own channel. I'm constantly annoyed by the commentators that they have on the football networks.

As far as the salary cap maybe I was wrong when I said it was needed. The current system they have does seem to be working fine, and it sure does bring excitement at the very least.