Should baseball have a salary cap?

Boopotts

I go back and forth on this issue, so I would be interested to hear what everyone else thinks. On one hand I don't think it's fair that a team should have a competitive advantage (i.e., a higher payroll) just because of their geographic location. On the other hand, though, it doesn't seem fair that a fairly savvy and shrewd owner like Steinbrenner (I loathe George, just to be clear, but he's done a fine job as the owner of a baseball team) should have to kick out more money so that the incompetents in places like K.C don't have to suffer as much for making poor personell decisions.

I do think a salary cap has been good for football and hockey. I'm not as convinced it's been as good for the NBA, which seems to really need to have it's marquis franchises thriving in order to be really visible (most of us would watch a Superbowl between any two teams, and if you're a hockey fan you're probably watching just about any Stanley Cup final. But I doubt it's one basketball fan in ten that would be at all interested in, say, a Grizzlies/Bucks finals). With baseball, however, I'm still indecided.

Would be curious to hear others' thoughts on this issue.

Axtell

I don't think a salary cap alone is the answer, but a salary floor should be mandatory as well.

On one hand, I don't thnk it's fair the Bostons, LAs, and NYs of MLB have a definite and unfair advantage simply because of their location, I don't think they should put money into small market team's pockets without spending it on payroll.

kcballboy

<< <i>I don't think a salary cap alone is the answer, but a salary floor should be mandatory as well.

On one hand, I don't thnk it's fair the Bostons, LAs, and NYs of MLB have a definite and unfair advantage simply because of their location, I don't think they should put money into small market team's pockets without spending it on payroll. >>



I agree there Ax. KC gets roughly 25 million in revenue sharing each year, and we continually have a 25-35 million dollar payroll. Where does it go? On top of that, the voters just approved roughly $300 in stadium renovations and all David Glass would contribute was someting like 5-10%. That's part of the problem with having a Wal-Mart CEO own your baseball team. All that matters is the bottom line, regardless of the piss poor product that results.

A761506

I think MLB needs to do exactly the same thing the NHL has done. Cap each team plus revenue sharing, all tied to overall profits. I'm opposed to a floor because that could lead to overpaying inferior players.

Initially, it would lead to a mass exodus from all the high payroll teams, but once everything was stablized, I think it would lead to much better, more competitive baseball being played across the league. Every team would have a chance, and every year would be a legitimate fresh start.

Axtell

Why I'd want a floor so that the cheapskate teams who don't want to spend any money on payroll aren't allowed to pocket the revenue sharing money, and be forced to put it on the field.

Dallas88

The big reason that MLB needs a cap is the ABILITY to RETAIN your star players....not necessarily that the big money teams will buy their way to a championship.

Profits, in MLB, are driven primarily by multimedia outlets.

The Yankees (and many other big market clubs) make $200 million from selling their radio and TV rights.

KC makes $2 million from selling their radio and TV rights.

Of course those clubs are going to spend that profit on star players. The smaller market clubs must either lock away players BEFORE they hit it big, or dip into profits from OTHER business ventures to subsidize baseball......which is exactly what the late Ewing Kauffman did in KC, back in the late 80's.............of course back then, the financial discrepancy was not as great as it is now.

What many people also forget is that the teams need each other to have a healthy product. This is not like business in the "real-world" where you try to dominate your competition and put them out on their butt in bankruptcy.........each team NEEDS all the other teams to keep the one product, which is baseball, healthy.

Another problem that needs to be addressed is the "closed-book" accounting that baseball enjoys. The owners need to open the books and let us see where the revenue sharing money is going.........because I can sure as sh*t tell anyone, that it ain't going to players here in KC.....look at our god-aweful pitching staff!

I can guaran-damn-tee that most of the revenue sharing money that the Royals receive is headed back to Bentonville, in David and Dan Glass' pockets..............pi**es me off, and it should really make the bigger clubs angry.

A bit of a rant, but yes, there should be a cap, along with an economic overhaul of how the finances of the game are managed.....PERIOD

....but it ain't gonna happen until Bud "The Pud" Selig gets his butt out of the commissioner's chair......I'll look forward to that day!

cardfan07

I think a floor is necessary too. I think I just read that the marlins will have a salary of $17M this year...can that be right?? A 25 man roster making less than a million per on average?

One thing that baseball did to screw itself was allow expansion. They were greedy to take the several hundred million or close to a billion dollars in franchise fees to allow teams into markets that can't (and should have been known to not) sustain a baseball team. Now, you've got teams that have very little fan base and owners doing fire sales every couple of years. If baseball was run more like a business with franchises, they'd look at pulling the plug on some of the teams. I live in MN and I'm a Yankee fan. I root for the evil empire but watch on a daily basis, a small market team that struggles to sell tickets. The metrodome is junk, but a new stadium isn't really the answer either. Carl Pohlad is one of the wealthiest baseball owners out there. He won't spend money. The organization tried to get it's own tv deals and some of the twins games a couple years ago weren't broadcast locally because they couldn't get it figured out.
Long story short-teams are mismanaged. No matter what side of the coin you're on, one has to agree that to compete you need to do a few things - grow talent in your minor league system and/or pay for some free agent players. If you can't do either, you get MLB's version of welfare.
My 2¢.

Just adding a column from Yahoo sports... Article

Axtell

I am not sure contracting teams is the answer. Pittsburgh, for example. Should you contract that team? They are relatively small market and cannot afford to pay big salaries, so they continually struggle, so their attendance is low, tv rights aren't worth as much...it's a vicious cycle.

I think a salary cap (and floor) are going to be necessary at some point in MLB in the very near future. I don't think it's a 'welfare' system, but more of an equal footing. As soon as MLB sees a cap is in the league's best long term interest, the sooner we will see more teams spending more money.

stevek

Dallas88 has got it absolutely right. He may have noticed a few of my KC Royals comments here because my college roommate and still a close friend from Penn State is a Royals fan - it's really a shame and it's not fair that a once proud franchise like the Royals is in such poor shape.

This isn't like the "old days" when MLB was the national pastime and "ruled" duing the summertime. Even when teams where pathetic back in the old days, and even when people didn't come out to the ballpark in some cities, many people in those cities still followed the team and caught the games on TV and radio.

In order to keep many fans interest these days, there has to be competition, the games must be entertaining and the teams should have at least a chance each season to win a pennant. I caught some of those Yankees- Royals games just played on TV - it clearly wasn't even competitive...that's going to have to change and a salary cap would be a good start.

kuhlmann

id like to see them add 2 more wild card teams. make the playoffs 6 teams each league. that would keep teams that hover about .500 or below in the hunt and ballparks would have much higher attendance IMO coming down the stretch run.

they make more money in attendance and media covergae and advertising.

CardCoreCollector

Kuhlman,

If they added more playoff teams the season would last almost into December lol. I think it's bad enough their playing games in Nov. aren't they ?

Only way they can do that is by shortining the season or starting sooner and i don't think they'll do either one

Dave

Dallas88

Thanks Steve - there's a ton of work to do, so our game will thrive and continue to grow.

There are a few big things that really should be done to keep baseball healthy.

I did notice that you have mentioned that your friend is a Royals fan.....it's tough right now for those of us who remember the good times (like the '80 world series vs. the Phils)!

All I can really do is support what we have, and hope someone, with a hint of financial common sense, who's not afraid to take some bullets from the media, will become commish.......too much to ask?

-dal-

WinPitcher

The players union will never go for a cap.

Steve

kuhlmann

Dave

what if they made the other 2 teams that got in best of 3 games or just 1 game. then move on to next round.

Axtell

I think more playoff teams isn't the answer...let's not turn it into basketball or worse, hockey.

A cap and floor would, I think, mean overall more dollars for salaries...not sure why the player's union wouldn't want more of its members making more money.

softparade

Well then, pick what you think is a fair CAP and a fair FLOOR. Then the math could be run to see if indeed it means more overall dollars for players then is already out there.

Also, I agree with Win Pitch. The MLB players union as constituted will never go for a cap. And they are the strongest union in all of sports which of course means they will stay as they are constituted

Boopotts

<< <i>I think more playoff teams isn't the answer...let's not turn it into basketball or worse, hockey. >>




Both the NBA and NHL bring in 8 teams from two conferences.

Axtell

Cap of $130 and floor of $80 million.

MLB determines the amount TV deals are worth on a regional level, based on population, to ensure proper inflow from teams that own their own tv stations (Cubs, Braves, etc).

Brian48

If it's good enough for the NFL, it's good enough for MLB. Of course, the Player's Union, ........I mean "Association", will never go for it.

cardfan07

I'm not saying contraction is or isn't the answer to what ails baseball. But as with most things in life, it isn't just the lack of a salary cap that is hurting baseball. I think baseball's popularity has slipped below the NFL and NBA for team sports and possibly soccer and NASCAR. That's a lot of choices for people to spend their money on.
If the Yankees, Red Sox and a couple other teams are going to pony up luxury taxes based on payrolls, I think the teams getting that money need to put it to their own payrolls...not the bottom line. Call me naive, but that ain't gonna draw fans, sell tickets and merchandise, etc. Getting better players on it will. Unless you're the Cubs, then you can put anything on the field and sell every ticket you've got.
There is no easy answer.

Connecticoin

<< <i>I can guaran-damn-tee that most of the revenue sharing money that the Royals receive is headed back to Bentonville, in David and Dan Glass' pockets..............pi**es me off, and it should really make the bigger clubs angry.

>>



The Royals are owned by Wal-Mart? Man, that blows. They are gonna suck for a long time, a least until they flip the team for a $50m profit, so they can increase their wealth from $15.1 billion to $15.15 billion.

tkd7

<< <i>I'm not saying contraction is or isn't the answer to what ails baseball. But as with most things in life, it isn't just the lack of a salary cap that is hurting baseball. I think baseball's popularity has slipped below the NFL and NBA for team sports and possibly soccer and NASCAR. That's a lot of choices for people to spend their money on.
If the Yankees, Red Sox and a couple other teams are going to pony up luxury taxes based on payrolls, I think the teams getting that money need to put it to their own payrolls...not the bottom line. Call me naive, but that ain't gonna draw fans, sell tickets and merchandise, etc. Getting better players on it will. Unless you're the Cubs, then you can put anything on the field and sell every ticket you've got.
There is no easy answer. >>



I'm not convinced that baseball has slipped below the NBA and MLS in popularity, but I don't have data to prove it one way or another, and I think getting that data is difficult.

I'm not convinced a salary cap will work either. I think lowering the luxury tax limit would have a better effect. It would still allow players to bargain for salary with the clubs, but it will return more money to the lower spending teams, in effect creating more financial sharing. I think "profit sharing" is a trickier item. Since profit is income less expenses, the Yankees actually showed an operating loss last year. Of course the value of the team is near $1 billion, so a loss of a few million isn't a big deal, but the Yankees do take their income and put it back into the team. If the other teams put their money back into their payroll, it would go a long way.

Overall, baseball seems to be the best consumer value of any of the major sports (NFL, MLB, NBA, NHL). The ticket prices are the lowest and the number of games is the highest, so there is more choice for the consumer. If you don't mind sitting in the lower priced seats, tickets can be had for less than $10. Winning has been spread between the high (Yankees, Red Sox etc.) and low (A's, Twins etc.) salary teams. Unfortunately, for every winning team there has to be a losing team. I can't find a good way to ensure that the losing teams keep their fans.

cardfan07

I like the idea of lowering the luxury tax threshold a little bit too. Not a perfect solution, but one that might help even things out shorter term.
The old teams and rivalries couldnt keep up with the changing times. Like it or not, free agency is reality. Some teams have millions of fans to support the team, some don't. Salaries have done nothing but go up over the last 20 years. The average salary is now close to $3M per year. Was it Nolan Ryan who got the first million dollar contract? Now, you don't even have to have major league experience and you're getting that kind of jack. Baseball is caught in a viscious cycle and there are lots of things to blame.
I look forward to the start of baseball every year. I hope some of these things get figured out.

WinPitcher

Catfish Hunter got the first million dollar contract. 3.5 mil from the Yanks. I do not know who was the first million dollar per year player (Winfield)? Possibly.

SD

kuhlmann

i believe it was nolan ryan was the first 1 million dollar contract.

WinPitcher

A: On Nov 19, 1979, Nolan Ryan became the first player to sign a contract for more than a million dollars per year


You guys are correct. However Hunter was the first to sign a contract valued at a million or better. 3.5 mil over 5 years I think.

Steve

Wabittwax

I think that Pro Sports Unions are ridiculous anyways. Is that why unions where created? Was it to help somebody making $10 million a year get up to $15 million a year or where they created to help a guy get up to $2 an hour working 12 hours a day in a coal mine. If I was a commissioner, I wouldn't even recognize their union and do what ever I wanted to. Arod can go be a door greeter at Walmart if he can't live on $25 million a year. Somebody will play the GAME for what they are paying, hell, I would play right now $35,000 a year. MLB needs to TELL the players how it's going to be and if they don't like it, every one of them can take a hike.

phreakydancin

Relevant to this topic, Forbes magazine released their 2006 list of MLB teams by total value: LINK

Teams ranked higher than I would have guessed: Washington, Houston, San Diego, Cleveland, Arizona, Colorado
Teams ranked lower than I would have guessed: Anaheim, Detroit, Toronto, Minnesota

VERY INTERESTING: click on the top of the last column to re-order the teams by Operating Income (read: profit). Is the problem with the small market teams that they can't compete, or that they simply choose not to?

tkd7

Exactly the point I made earlier. The Yankees lose money, they don't make money. Profit sharing is a trickey thing. I think the luxury tax is the big reason the Yankees lose money. Take that out, they probably break even.

Dallas88

Is the problem with the small market teams that they can't compete, or that they simply choose not to?

That's a very valid point. In KC, we've been asking for a few years now where's the shared-revenue money going? If the numbers are accurate from Forbes, then the Royals receive around 50 million in revenue.....our payroll is less than that.

But I think the real issue is not the fact of small-market teams "competing", we all know they can. It's that after a small-market team develops a player, that player is bought away from them by a larger-market team. Therefore, the smaller teams in baseball must KEEP developing talent, and being correct on EVERY high draft pick, to supplement the players that head for greener pastures.

One or 2 mistakes in the draft and development can mean a whole season or 2 of failure for a smaller market team, wheras a larger team can simply buy more guys.

Bottom line is that baseball needs to open the books and let us see what these owners are doing with the shared money!

Axtell

As far as the yankees losing money, how is that possible?

From a paper standpoint, it may show a loss, but since Steinbrenner owns the TV network the yankees pay untold millions to, it's just shifting of money. It's the same thing the Cubs, Braves, and other teams that own their own TV networks do.

Steinbrenner has been far too successful in business to lose money on the yankees. He's making tons of cash with that team.

stevek

Of course the Yankees aren't losing money! For example if you own a business whereby the gross profits for the year were $100,000 but you paid your wife a $500,000 salary, then technically (for example sake) your business on paper lost $400,000 for the year, but your wife's salary money is still of course in the family. This is perfectly legal because as long as payroll taxes are paid, everything basically is okay.

Also...There can be numerous perks in owning a business that are really personal perks that are written off as business expenses. Steinbrenner is so cheap with certain things, it wouldn't surprise me if he brings home toilet paper from the Yankees bathroom to use at his home - LOL

No...Steinbrenner is not "losing" money on the Yankees and it is doubtful that many other sports franchises are really losing money either for similar reasons.

phreakydancin

Axtell, if you read the accompanying write-ups, you'll see that they did note for the Yankees:


<< <i>The losses are offset by the team's 38% stake in the YES network which generates more than $200 million in revenue is worth more than $1 billion. The Yankees will get a break on their revenue sharing bill when they open their $800 million team-financed new stadium in 2009. Teams can deduct stadium operations expenses including construction costs from the revenues eligible to be shared with low revenue teams. >>

A761506

Baseball will eventually have a cap, whether it takes a long strike or even replacement players, once the majority of owners get tired of the increasing salaries that do not translate into increasing profits. In all honesty, in the short-term it would seem disasterous, but long-term, it will make a ton of sense.

There is no doubt that many baseball teams are mismanaged. In any business, there are only so many competent people and the rest are just not as sharp. Same in baseball, some teams have smart upper-level employees that know what they're doing, others employ imps. Any baseball market that does not locally broadcast every single game is run by a chimp. Here in Detroit, they only broadcast 112 games. This is the second straight year they haven't shown all the games. It's not because the team stunk, it's because they failed to negociate a logical contract. There is no excuse for this in any market.

I also agree about the open-book accounting. Teams are stashing away money that they are not using in the revenue sharing. Money generated from a team owned parking lot is often being put into a different catagory and hidden.

I have wanted to see contraction for years. The league is watered down, jobs have been created for players who are utterly untalented compared to an average pro player. Minimally, 2 teams need to go: Florida & Tampa Bay. Not enough people there care. Very few would even miss it.

I know it would be a statistical mess, but I also think they should shorten the regular season and expand the playoffs to the top 8 teams in each league, like basketball and hockey. I'd cut 26 regular season games off the schedule so the playoffs could begin 4 weeks earlier. How much more exciting would that be? By doing that, you lighten the impact of the inter-league games (which are stupid but generally good for drawing fans). You also make 16 teams into playoff teams... that should greatly increase fan support and attendance on the playoff bound teams.