MLB’s competitive imbalance: Is it time for a salary cap?
Major League Baseball remains the only sport with a “Free Market” free agency but with a luxury tax. The league’s payroll average is $161.4 million and $4.84 billion total committed to players. Does the MLB need a cap to solve its competition imbalance issues?
This year, the league average of team payrolls is $161.4 million according to Spotrac with a high of $348.2 million on the New York Mets and a low of $61.4 million on the Oakland Athletics. Total payroll will be $5 billion for the MLB with total revenues (according to the WSJ) of $9 billion. For years on end, fans have been asking for a restoration of competitive balance in baseball and the only way we can do this is by implementing salary cap. Baseball fans are simply sick of large-market teams just gathering up all the superstars while their team has to penny-pinch and pick up what’s in the bargain bin.
The National Football League, National Hockey League, National Basketball Association, and Major League Soccer all have stringent cap rules that penalize teams if they don’t abide by them. So why hasn’t Major League Baseball taken steps to implement a lower limit/upper limit cap? Here’s why.
Simply put, the union will not accept a new arrangement that puts their marketability and any superstars’ high salaries at risk. It’s time for Rob Manfred to say: Sorry guys, but we have to do this to promote fairness in the league.
Remember now, Manfred is the commissioner of baseball, and he really needs to start getting tough with the union.
Players, a reminder that playing in the MLB is a privilege because you worked hard to get to the top, however Manfred does have the right to say: “You’re fired.” You can probably say that MLB is “at-will” work (Manfred does have discretionary powers, not like what Kenesaw Mountain Landis and later commissioners would have).
Yes, I understand that spending huge amounts of money don’t bring championships (Looking at you Mets and Yankees) but I personally believe that it is high time for an NHL-style hard cap which will not only prevent large-market teams from spending extreme amounts of money to reload their team (as the Yankees and Mets did but failed to capitalize on), but it will give small market teams an advantage to allow them to sign the top talent as well. It will restore competitive balance in the league too and bring the fans back to more competitive games.
The National Football League certainly solved some of their late financial problems with a salary cap and it does balance the competition. The National Hockey League had to pull teeth (losing a season in the process) but they got it right.
Here’s how I would implement the MLB Salary Cap:
Immediately, I would begin by telling players that all players will have their salaries rolled back by 25-30% and placed into a pension fund for retired players as the MLB does pay union dues (deducted from their paychecks). I think it’s a fair idea to say the least as the league needs to help retired players. The NHL did it with a 24% rollback which was placed into escrow, MLB players should think about the players of before who didn’t have huge contracts and the paydays that today’s players do.
Next, the MLB should have an upper limit of $220 million and a lower limit of $85 million. Any time the cap is breached by $2,000,000 or more or attempts to circumvent the cap, there should be immediate penalties like forfeiting draft picks or loss of draft pool money. There should be at least some breathing room.
Might I remind the MLB that the tickets bought by the fans do pay for the part of the player salaries.
I believe that there should be some sort of exemption if the team can’t meet the lower limit of the cap. Not all teams have a very large market in which gives them a lot of money and not all teams have a sports network that’s making them money and I get it. There should a better revenue sharing agreement
The MLBPA needs to agree to a new salary system and to do away with their free market free agency. The MLB would also need to learn how to play fair with top talent. I understand we want players to remain with the one team we root for. But we know that’s just not possible. They know what’s best for the rest of their career. Superstars sometimes are going to want to play elsewhere for a chance to win a championship.
MLB, the time has come. Get a salary cap.
