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Major League Baseball- Is It Time For a Salary Cap?

Major League Baseball has one of the most active free agencies of any sports league. With so many players throughout the MLB, as well as the Minor League/Farm systems, there are many moving parts. And with a lot of moving players, comes a lot of moving money, especially in a league that does not require a salary cap for teams.The MLB has never, and in my opinion will never, have a salary cap for each team. For those of you who aren’t privy to the way that MLB salary caps work- let’s break this down.

The NFL, NBA, and many other leagues, have instituted a salary cap, meaning that each team can only spend a certain amount of money on their athletes each year- and teams can not go over this cap. In Major League Baseball, no such limit exists. This means that teams like the Yankees or the Dodgers, that are in large markets, make more money and have a very high purchasing power. Therefore, these teams can influence players with big checks. Some believe this makes the free agency market unfair, even with Major League Baseball’s use of the Luxury tax to try and level the playing field. The MLB Luxury tax penalizes teams that spend a certain amount of money every year. However, as time goes on, this cap which is set by the league has gotten larger every year, and therefore been increasingly less effective. Additionally, a team like the Yankees has such large profit margins that the luxury tax does not deter them from overspending.

The opposition to adding such a spending limit, is that adding in a salary cap could cause multiple teams to go bankrupt. This is obviously confusing, but to understand this, first we have to discuss the MLB’s policy for revenue sharing. The Collective Bargaining Agreement for Major League Baseball explained it like this, ” [34% of] Net Local Revenue from the Prior Revenue Sharing Year, net of postseason revenue, to a putative pool; that pool is then divided equally among all Clubs…” The specific numbers aren’t important here, but very basically, certain teams have to give away some of the money that they make to other teams. Meaning that a big, very profitable team like the Yankees will obviously pay significantly more money than a smaller market team like the Tampa Bay Rays. So, by adding a salary cap and limiting the power of these big market clubs, you could lose valuable money, that is then shared with these smaller teams. Some say this system is unfair, however it does make sense. A team like the Yankees is lucky to be in New York, but without the other smaller market teams, there would be no MLB- who would play the teams in Boston, Chicago, LA and New York? No MLB would mean no Yankees. So, due to the fact that the larger market teams need the rest of the league to be profitable, revenue sharing is justified.

As a far as adding the salary cap goes, the pros are much more obvious. It is clear that teams with more money, can spend that money on acquiring players, which doesn’t necessarily balance out the playing field. Many die hard baseball fans struggle with watching the imbalance in these teams. A team like the Texas Rangers, or the Tampa Bay Rays, has little to no chance of beating out one of these “super-clubs” in a 7 game series. More importantly- small market teams struggle in free agency to “out-bid” their competitors for top prospects. Just look at Bryce Harper and Manny Machado- the top teams in the bidding wars for those premier players were from Chicago, New York, LA and Philadelphia. Although some argue that this is possible, like the Marlins’ upset over the Yankees in 2003. However, it is a moderate trend in the MLB, that teams with money win rings.

2018: Boston Red Sox (1st in Payroll) defeated Los Angeles Dodgers (3rd)

2017: Houston Astros (18th) defeated Los Angeles Dodgers (1st)

2016: Chicago Cubs (14th) defeated Cleveland Indians (24th)

2015: Kansas City Royals (16th) defeated New York Mets (21st)

2014: San Francisco Giants (7th) defeated Kansas City Royals (19th)

2013: Boston Red Sox (4th) defeated St. Louis Cardinals (10th)

2012: San Francisco Giants (8th) defeated Detroit Tigers (5th)

2011: St. Louis Cardinals (11th) defeated Texas Rangers (13th)

2010: San Francisco Giants (10th) defeated Texas Rangers (27th)

2009: New York Yankees (1st) defeated Philadelphia Phillies (8th)

All in all, it is apparent that there is change needed in order to ensure that the playing field in the MLB is evened out, but this needs to be done in a way that protects the financial stability of the league. The MLB season opens March 29th, where all 30 MLB teams will play on the same day.

This of course is a very hard topic to break down, but for more information, and to even get involved in the debate, be sure to listen to “The Wrightway Podcast” this Wednesday at 8pm EST, where Austin and Jake will break down the executive-side politics of Major League Baseball. Austin Meo contributed to this article.

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