Level Playing Field?

What is so different about Major League Baseball than the other three (if you count the NHL) major sports? Your first answer is probably its history. It is affectionately referred to as America’s National Pastime. It has been around for over 100 years and many of the most recognizable American athletes/icons from the 20th Century played baseball. Names such as Babe Ruth, Jackie Robinson, Joe DiMaggio, and Sandy Koufax are obvious examples of these. The other sports meanwhile did not fully establish themselves until the later part of the 20th Century. While many feel that the NFL has since passed MLB by in popularity, baseball is currently considered by many to be as strong as ever.

At this point in baseballs’ history a more relevant difference than the other sports stands out though. While each of the other three sports have instituted a salary cap, baseball has thus far refused to do so. I am not concerned with the politics of why baseball has not followed the same approach as these other sports. What I am concerned with though is the direction that baseball is headed without having a stronger form of payroll regulation.

In the year 2001, baseball was at a unique time in its history. The game appeared from the outside to be prospering as well as it ever had, catapulted by both Cal Ripkin breaking Lou Gehrig’s consecutive games streak in 1995 and the Summer of 1998, where Mark McGuire and Sammy Sosa battled for the all-time single season home run record. Owners though were crying broke and there were rumblings that they would try to institute a salary cap at the middle of that season (when the collective bargaining agreement expired). Never in the history of labor negotiations between the owners and the players in MLB did the owners "win" when it came down to it. It was clear that at this point they were going to stand as firm as ever. At the same time though, the nation was still recovering from the events of 9/11 which had happened not even a year prior. As a result the players had to give in much more than in the past, but in addition the owners could not stand as firm as they would have liked to ideally because the fans did not have patience for petty fighting between multi-millionaires. The outcome was significant financial changes (increased revenue sharing, luxury tax, etc) but not a salary cap.

In the years that have followed since then, baseball has found the proverbial money pit. Due to some shrewd business moves concerning both national television contracts and the Internet (MLB.com) baseball is richer than it has ever been. In addition, while the luxury tax has not taxed many teams, the ones that it did tax supplied some extra income to the teams that were in need. This sudden fortune has made many franchises forget of their crying broke in 2001 and encouraged them to look towards the future. I do not see this fortune as being around forever though, and I view the current collective bargaining agreement as a band-aid over a wound that needs stitches.

Look, I am not going to sit here and tell you that I am an expert on the numbers and the legal facts of the collective bargaining agreement. What I am going to use is my common sense derived from my understanding of the MLB situation and the situation of the other major sports leagues. The fact remains that the luxury tax in MLB has only been inflicted on three franchises (New York Yankees, Boston Red Sox and Anaheim Angels) since its inception. In addition, prior to 2007 only one franchise had been penalized more than once (New York Yankees). When you look at the numbers of the money paid out as a result of the luxury tax, only one team (New York Yankees) have paid a significant amount. Now this is by no means a knock on the Yankees. All this is saying is that this tax is set at such a high level that the high majority of the teams are not even close to reaching it. The luxury tax threshold is set at $148 million for 2007, $155m for 2008, $162m for 2009, $170m for 2010 and $178m for 2011. To put that in perspective, the highest team payroll for 2006 was $194m (Yankees), second was $120m (Red Sox), third was $103m (Angels) and so on. While the 2007 figures are not out yet, it is clear that based on last years numbers only one team would pay the tax, and the rest of the league is nowhere close.

This is not to say that the Yankees are alone in this financial imbalance. There are a group of teams in major markets that can dwarf the income of smaller market franchises. How can you expect a Milwaukee Brewers to financially compete with a Los Angeles Dodgers or a New York Mets without some extreme help? When you look at these other leagues, they all go about it in somewhat different ways, but they all have the same basic concept. They are capping the amount that the highest payrolls can be. While the NBA has a "soft cap", which means you can technically go over it. Once you are over it you cannot increase your payroll by much by acquiring a player from another team. The NBA basically allows flexibility to resign a teams players. I am not an expert, so I am not saying what kind of cap the MLB should have, all I am saying is that they need something.

I do not really care about the supposed parody of the past eight seasons in MLB. What I am concerned with is the future. This influx of money from new stadiums, the upcoming MLB Network and MLB.com will be old in five years. While the Royals were able to pay a pitcher $11m a year to come pitch for them, how many teams were able to realistically bid for pitcher on the open market from Japan? Smaller market teams have more money than they used to, but so do large market teams. The gap is still very large, it is just shifting to higher numbers.

Opponents of a salary cap point to teams like the Twins and the A's. These are two small market teams that have shown the ability to compete consistently in this generation without a high payroll. When you look at these teams, they have proven to have very consistent and prodigious minor league systems. While they have different philosophies, one thing is consistent in both and that is that they rely on production from their young players. Well, look at a team like the Pittsburgh Pirates. They are forced to go by that same model as the Twins and A's. The thing with the Pirates though is that in their past seven drafts they have picked a pitcher in the first round. Six of those pitchers has suffered a major arm injury. They do not have the luxury of signing a Dice-K or Pedro Martinez to soften this blow. They endure bad luck and have to live with it. Teams like the Anaheim Angels or New York Mets can overcome this bad luck through spending from their seeming less endless pile of money.

The other type of way to compete as a small market is the "yo-yo" plan. This has been used by teams such as the Texas Rangers, Arizona D'Backs and most famously the Florida Marlins. They spend a ton of money for a year or two, win as much as possible while most likely losing money and then sell all your players, most likely lose games and make your money back. While this may make sense for an owner, it has got to be hell on a fan. Especially in the Rangers case because they did not even win as a result of it.

As you can tell I feel very passionately about this subject. Luckily I am a fan of a team that has money. While money has never guaranteed my team wins, it promises me as a fan that my team has the opportunity to use any avenue to improve the team, whether its posting highest for an international player, spending more on scouting, signing a high priced free agent, or trading for an overpaid star. While the other sports leagues provide this to each of their fans, MLB does not.

Lastly I want to make two points. One counter argument by (selfish) fans of high priced teams is that if their owner or team is making money then why should he give it up to other teams. If those owners wanted to buy the Cubs or the Yankees then they could have. My answer to that is this...baseball is a sport above all else. While Target may try to put Walmart out of business to make more money, the Mets can't try to put the Pirates out of business. Without teams like the Pirates, Royals and so on, these big market teams would have no one to play, and there would be no league for them to play and make money through.

When people look at the NFL they see the epitome of revenue sharing and a salary cap where every team can compete. Most experts point to one man as the driving force behind this development. That man was Wellington Mara. He was was the late owner of the New York Giants. As the oldest franchise in the largest market in the League, Mara could have held out to get his team the most money possible. Not only did he not do that, he pushed to get the revenues shared throughout the league. He saw that without the other teams, there was no league and there was no Giants. Can any of you see a George Steinbrenner or a Fred Wilpon doing this? It is time that these big market owners stopped thinking strictly about dollars for a moment and realized that the game needs fairness to exist.

This is a situation that is so complicated and so intricate that it could take years to figure out (it has and will) and take hundreds of pages to write about (I wish I could). There are so many more details and arguments that can be made on this subject. The bottom line though is that the way baseball is financially structured now is not fair. I don't care if you are a Mets fan, a Marlins fan, a Giants fan or whomever, but you have to realize this. I know that they are wasting time now, but I hope that someday they get it right. Until then, I will root for my team and continue to be lucky I did not grow up in a Pittsburgh or a Tampa Bay.

STKAFI