America's Pastime is Past its Cap Time

In 1999 Royals’ fans proved they had enough. In a game against the New York Yankees on May, 1 fans at Kauffman Stadium in Kansas City donned T-shirts that read “$hare the Wealth.” They staged a protest against the financial disparity in Major League Baseball. That year, the Yankees had the highest team payroll in baseball at $188.13 million, compared to the Royals’ fourth-lowest team payroll of $16.53 million (The Daily Barometer). The Yankees were coming off their twenty-fourth World Series title; the Royals hadn’t made the playoffs since 1985. Royals’ fans turned their backs every time a Yankee hitter stepped up to bat and threw fake $100 bills into the outfield (The Daily Barometer). The group of 3,000 walked out of the stadium together in protest. In the next fourteen years, the Yankees won three more World Series titles and made the playoffs sixteen of the last seventeen years, and they still lead the league in team payroll at a whopping $197.96 million. The Royals still hold the fourth-lowest payroll, $60.92 million, and still haven’t been to the playoffs since 1985 (The Daily Barometer). The 27-year postseason drought is the longest in Major League Baseball.

The Royals are just one example of the many loyal fans crying for help because their team is hopeless; and if it doesn’t change their allegiance to baseball will be weakened. Fans have driven baseball to be known as America’s Pastime, they follow the players, buy the merchandise, attend the games and pass down their experiences to their kids. It’s not secret that fan attendance has a direct correlation with the team’s success, so it should be a priority to make sure all teams are on an equal playing field. However, that’s clearly not the case, many teams are suffering because of their financial predisposition, rich teams are taking advantage of their privileges and as a result the fan experience is effected. Baseball fans that follow poor, unsuccessful teams will lose hope in the sport, and baseball will eventually be “past its time.”

Even though there are many examples of organizations that are fighting the economic disparity in major league baseball, the implementation of a salary cap is still very controversial. The debate on how major league baseball should handle payroll regulations has created a schism between baseball executives because fiscal regulations are believed to have an effect on certain organization’s ability to succeed. Currently major league baseball has a luxury tax system, which is the softest cap of all of the major American sports. In result, small market organizations don’t have the financial means to compete for players in free agency with the economic superpowers of the Chicago Cubs, New York Yankees or Los Angeles Dodgers. Shorthanded organizations are subject to either accept their shortcomings, or create alternative non-monetary based philosophies in order to give themselves a chance to compete.

The only salary regulation in Major League Baseball is called a luxury tax, and it is a meager attempt to control the top spending organizations. Under the current system every organization is allowed to spend as much money as they want, but if they exceed 178 million dollar threshold, they will be fined. The Yankees have been fined for ten consecutive years, and they continue to pursue the most expensive players without a flinch. The Dodgers are currently fifty million dollars over the threshold, which is almost as much as the Padres entire payroll. The way a salary cap would work is once a team has reached the magic payroll number, they are forbidden to spend more, and as stated in an article on espn.com by Neil deMause, “This reduces salaries in two ways: Teams over the cap are taken out of the bidding for free agents (or for pricey trade targets), giving available players fewer options and reducing bidding pressure, and teams just below the cap will resist blowing their budget on a single player.” This would give small market teams a better chance of competing for free agents and celebrate meritocracy rather than purchasing power.

Despite the economic disparity, there are people satisfied with the existing fiscal policies. The biggest naysayers are the executives representing the player’s union. Adding a hard salary cap would decrease competition over free agents, and the player’s union will not let their players take a pay cut. Disregarding their monetary bias, the players’ union also makes the argument that Baseball is by far the most stable of the American professional sports, and it is the only one without a salary cap. In just the past few years, fans of the other major sports have experienced shortened seasons, lockouts, and a divide between players and owners only paralleled by the political parties in Washington. Using that alone as evidence, it seems a salary cap is the worst thing baseball could have happen to its player and owner relationship. There are other people who argue that the economic disparity has not created a competitive imbalance. David Schoenfield, from ESPN analyzed how baseball’s current system has effected the competitive sphere of the game and he concluded that, “Major League Baseball playoffs are actually far less predictable than the other sports. While the NFL has had just three Super Bowl winners that didn't have the best or second-best record in the league, the '05 Steelers were tied for fifth, the '01 Patriots sixth, and the '97 Broncos fourth, and the NBA has had just one champ that didn't have one of the two best records the '04 Pistons were sixth, baseball has had just two World Series champs which did have the best or second-best record, '05 White Sox and '98 Yankees” (Schoenfield). Schoenfield went on to conclude that adding a salary cap is unnecessary because baseball does not have a competitive balance issue. Jayson Stark of ESPN.com also makes the argument that baseball is the most competitive of all the major sports. “Even though the Cardinals had won the World Series as recently as 2006, baseball has still had nine different champions in the last 11 years. Nine. Had Neftali Feliz been able to get one more out in Game 6, it would have been 10 different champs in 11 years, for just the second time in the history of the sport. The only stretch in baseball history that can top the current run of nine winners in 11 years was 1982-92, when 10 different teams won. How 'bout that?, So where does the NFL stand? Glad you asked. The almighty NFL has had eight winners in the last 11 years. And when was the last time it had nine champs in 11 seasons? How about never. Ever. Not in the Super Bowl era. Not prior to the Super Bowl era.” (Jayson Stark). In conclusion, if baseball is the most stable and the most competitive of the major sports, the current system should remain the same.

The debate begins with the discussion of the competitive imbalance in baseball. If the competitive imbalance is insignificant, then there is no need to change to a system that has proven to be sketchy in other major sports leagues and associations. David Schoenfield and Jayson Stark make their argument by comparing championships in baseball to other professional leagues. Just because there is parity in the World Series winners, doesn’t mean there’s parity among all thirty teams. Of the eleven teams to which Stark refers, only the Florida Marlins in 2003 were not in the top half in the MLB in team payroll. The last seven champions have been in the top 11 in team payroll, with at least $98 million to spend. Stark and Schoenfield failed to recognize that baseball is the least star-player driven league of the three major sports. Basketball only has five players on the court at a time, and a great player like Kobe Bryant has the opportunity to touch the ball every time on offense. Football is a quarterback driven league, and the team with the best quarterback gives themselves the best chance of winning. In each respective sports league, there are select few star-players in the league that can single handedly propel their team into playoff contention. Therefore, if a team is able to retain a star player, give themselves a great chance of winning. Baseball is completely different; a star pitcher only affects one out of every five games and a star hitter typically only gets four at bats during a game, meaning it is more of a team-oriented sport so its playoffs have a lot more parody.

The competitive imbalance in baseball clearly exists in the bottom tier of teams. Brad Pitt may have said it best while he was portraying the Oakland Athletics general manager Billy Beane in the movie Moneyball, “the problem we're trying to solve is that there are rich teams and there are poor teams. Then there's fifty feet of crap, and then there's us.” Successful baseball teams are competitive in many facets, which requires organizations to sign multiple players with a variety of skills. If baseball were like basketball or football, organizations could build around one or two players and find a way to win. Instead baseball organizations must build an entire team of worthy competitors. The more players a team needs, the more expensive it costs, which is why there are many baseball organizations who have trouble sifting through the “crap.” The Kansas City Royals have missed the playoffs twenty seven years in a row, in fourty-four years the Padres have only made the playoffs five times, the Pirates have missed the playoffs for twenty one straight years, the Milwaukee Brewers have made it to the playoffs twice in the last thirty years, the Cleveland Indians have been hopeless the past decade, the Toronto Blue Jays haven’t sniffed the playoffs since they won the World Series in 1992 and all of these organizations are in the bottom ten in total player salary (Baseball-Reference.com). Of the 82 teams that made the playoffs since 2003, forty-three have come from the top-third in team payroll, and only twelve have come from the bottom-third (The DePaulia). If Major League Baseball executives analyze the competitive balance from the bottom up, there are clearly many organizations suffering. Baseball fans shouldn’t be subjected to a team with no chance of winning, especially when it’s caused by an uncontrollable predisposition.

In order to fix the competitive imbalance action needs to be taken. There are two different types of caps that baseball can use, one is the "hard salary cap," in which the sports league sets the maximum amount of money a team can spend on player salaries and flatly declares that no team can exceed it, period. The other, more reasonable form of payroll regulation is the "soft salary cap," in which the established limit can be exceeded under a small and specific list of circumstances, chiefly in situations when teams want to hold onto franchise players or iconic players that would sustain the value of their franchise

and, by extension, maintain the popularity of that sport in all of its league markets (The DePaulia). The soft cap makes more sense for a sports league, because it is in the best interest of a league to do what it can to ensure that beloved players can more easily stay with the teams that value them, and by extension, with the fan bases that love them. In the NBA this is called the Larry Bird Exception, and according to Jorge Castillo of The Washington Post, “encourages players to re-sign with their current teams in hopes of providing loyalty and stability with fans” (The Daily Barometer). Baseball also needs to implement a salary floor (The Daily Barometer). In the NFL, as a part of its salary floor, teams are required to spend nearly ninety percent of the cap on player compensation. This would allow for players in small markets to make more money, because their team would need to spend the money or face penalties. This would make profit focused owners hesitant to own a team, and encourage owners to strive for victories. The players union would never agree to a salary cap because it would decrease the competition over players and lower the average player’s income. To combat with this, adding a salary cap would allow Major League Baseball to get rid of arbitration. All players are under team control on the league-minimum salary of $480,000 during their first six years. After three years of service, players are eligible for arbitration (The Daily Barometer). If teams and players can’t come to an agreement, they go to an arbitration hearing. After three years, players could be eligible for free agency. The best young players often deal with arbitration for three straight years before they hit free agency. This would cut through the red tape and allow players to make money on the open market three years sooner.

Large market teams will always have an inherent advantage, but changing the economic structure will give smaller markets like Milwaukee and Toronto a fighting chance. The New York Yankees and the Los Angeles Dodgers will still be able to attract players because of their big spotlight, great living areas and storied success (HubPages). However, they wont dominate free agency, giving smaller market teams a smaller hill to climb.

Baseball has never been about money; it is special in this country, has been since its invention and will continue to be for the foreseeable future. The game is nuance, romance and passion all rolled into one. Let’s fix the financial woes and get down to what baseball is all about. 

-Blake Dale Lepire