Let me preface this article by saying that the MLB is the only American sports league without some form of a salary cap, so it would be foolish for the players to give up this privilege, but that does not mean that there would not be benefits to adding a soft or hard cap to the league.
A salary cap does put a limit on how much a player can make in contract negotiations, but there are some bonuses that could be gained by the players in labor talks if they are willing to give on this topic.
One addition that would benefit the players would be the implementation of a salary floor to go along with the salary cap. While a salary cap limits how much a team can spend, and in turn prevents a player from seeking more money, a salary floor means teams cannot spend below a certain point.
The top 1% of players like Mookie Betts and Gerrit Cole would be limited in how much they could make, but it would increase the amount that 99% of the league could ask for considering owners would need to be spending above a certain threshold.
This would mean that very few players on a 26-man roster would be making less than a million dollars, as having too many players signed for that amount would make it impossible to be over the salary floor.
The NBA is a league that operates with a salary floor and their bottom line is set at 90% of the salary cap, so if the cap is set at $200 million, then no team can spend below $180 million. Only player salaries would contribute to the salary floor, so teams could not skate below the line by having a bunch of deferred or retained salary contributing to the number.
With the luxury tax for 2021 currently set at $210 million, the MLB could pick that as their salary cap number or possibly slightly lower it to $200 million. 90% may be too much to set the salary floor at with 26-man rosters, but if the MLB agreed to have it at 65% of the cap, that would mean teams would need their player salaries to be at least $130 million.
That number is roughly the average of the league’s payroll, and currently 16 of the 30 teams in the league are under that number meaning salaries for players would go way up. If the MLBPA proposed this to the owners, then the league would most likely never ask about a salary cap again considering a lot of owners would hate the idea of a salary floor.
Another issue that the MLBPA could fix with a salary cap is the service time for rookie contract players. Right now, it takes six years of service time for a player to become eligible for free agency. This means that a lot of players do not become free agent eligible until age 30, and that is when players may start to decline in performance.
This is becoming an issue as teams have been far less willing to spend money on free agents that are over the age of 30, which has led some players to hold out into Spring Training in hopes of finding the right deal.
Having no salary cap means that small market teams can lose their star players, as big market teams like the New York Yankees and Los Angeles Dodgers can spend infinite amounts of money to sign players. To try and counteract this, players have six years of service time so small market teams can control them for longer.
In a salary cap league, teams like the Yankees and Dodgers would have a limit on how much they could spend meaning teams like the Cleveland Indians and Kansas City Royals could potentially compete when it comes to retaining their players.
When looking at the NFL, you’ll see that it is not too often that a star player hits free agency. Some of that is due to the high injury rate of the sport with players more willing to sign a large extension with their current team instead of potentially suffering a significant injury in a contract year, but some part of that is due to the salary cap.
In the NFL, one team cannot grossly outspend another team when it comes to free agency like what the Yankees did with Gerrit Cole this past off-season.
When looking at the 2020 NFL free agency period, you’ll see that the highest AAV contracts signed were by 43-year old Tom Brady and 38-year old Philip Rivers. Both men had spent their entire career with one team up until this point and were just now testing free agency in their age 43 and 38 seasons.
Meanwhile, MLB’s free agency was headlined by 29-year old Gerrit Cole, 30 year-old Anthony Rendon, and 31-year old Stephen Strasburg as well as a few other players who had just turned 30.
There were a few younger NFL players such as Byron Jones and Jack Conklin who signed big deals in free agency, but those guys are not the best at their position and were simply a casualty to a team running out of cap space, which is not a bad thing because both men became two of the highest paid players at their position.
A small market team like the Kansas City Chiefs will never lose their franchise player in Patrick Mahomes likely because the salary cap will prevent other teams from offering him above and beyond than what the Chiefs can afford. Kansas City may lose a player like Chris Jones, but they will retain other star players that will keep them competitive.
If the MLB went to a salary cap, one single player may not be able to make $400 million, but the majority of the league would see significant boosts with the implementation of a salary floor.
Another improvement the MLBPA could potentially gain by agreeing to a salary cap would be cutting down the amount of service time a player needs to reach free agency. Currently a player needs six years of service time to be eligible for free agency, but the MLBPA could bargain their way to only needing four years by giving into a salary cap proposal.
This would mean star players could sign big money extensions sooner, while other players could hit free agency faster if their team does not have the cap space to retain them.
One main issue with the current system is a player must sit through three years of team control where the team can pay the player as little as they want, and the player cannot do anything about it. Then they finally reach three years of arbitration, but players have a very low success rate of achieving what they want, as they either lose their case or are forced to settle for less than they feel they deserve.
If free agency eligibility was cut down to four years, a player may only need to sit through team control for one to two years before finally reaching a payday in arbitration. This would also force teams to sign their players to extensions sooner.
The MLBPA asking for this would not be crazy, as small market teams would be more likely to retain their star players with there being a limit on how much a big market team can spend. Teams would no longer need to control the rights of a player for six years as a way to counteract losing them in free agency.
While on paper a salary cap may seem bad for the players, there are still different ways for the MLBPA to bargain that would make a salary cap beneficial for all involved.
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