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Salary Cap In Baseball

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Salary Cap In Baseball

Postby Spiegs1106 » Thu Nov 02, 2006 12:31 pm

I need to do a project for English where we have to do a project of our choice concerning a topic. One of the options was posting on a Forum and recording the response.

I was wondering if you could debate the subject of whether or not a Salary Cap would benefit Baseball.

Here is the Paper I Wrote that we are basing our Project on:

“The average cost for a family of four to attend a major league baseball game in 2005 topped $170.00 for tickets, refreshments and souvenirs but not including parking” (Buchanan). As a child, my father would never bring the entire family to a Red Sox game. The price was too high. Instead, my brother and I would take turns as to who could go to the game. Boston holds the highest cost to attend. In 2005, Boston became the most expensive ballpark at $276 dollars for a family of four to attend (Adrien). Reasons behind the increasing ticket prices connect back to the salaries of players.
Baseball is the only professional sport without some form of a salary cap. Basketball and football hold general salary caps where the front office regulates the extent to how much players are paid. Recently, the National Hockey League invoked a salary cap where clubs are not permitted to exceed the maximum payroll set at $39 million. The question asked today is whether Major League Baseball would benefit from a salary cap. The issue of a baseball salary cap has arisen repeatedly over the past couple of years. It is a way to help ensure fairness so that the competitions between teams remain stable. Without a cap, wealthier teams like the New York Yankees and the Los Angeles Angles have a significant advantage over other teams. These two teams are owned by people or companies who have a large amount of money that they are willing to spend on the team. As a result, these teams can offer larger salaries to potential players and therefore have a better chance of signing the players with the greatest skills and abilities (Fact Expert). Baseball needs to regulate the extent to which their players are paid. “The present salary situation is out of hand and small-market franchises cannot compete in this environment” (Pappas). Major League Baseball needs to fix their problem with a salary cap.
Many argue that if Major League Baseball teams issued a salary cap, it would favor the team owners. A salary cap would give owners a better chance to make money by allowing them to control the costs of their players. Such actions could be compared to America’s 19th century Robber Barons who became wealthy by exploiting natural resources, corrupting legislators, and using other unethical means. Consumer expenses such as ticket prices would remain the same while players would receive less money (Hiestand, 03c).
The players would most likely strike if a salary cap was presented to them because most of the league's athletes would be faced with a reduction in salary. It is believed that another strike would cause Major League Baseball to lose millions of dollars and possibly fan support. "It would take a long and bitter work stoppage for the players to accept a salary cap and it would simply not be worth it," says Smizik. Smizik believes a salary cap would help baseball's economic future, but is opposed because of the costs it will take to institute it. In 1994, team owners demanded a salary cap, claiming that unless teams agreed to share local broadcasting revenues (to increase equity amongst the teams) and enact a salary cap, small-market clubs would fall out of competition. The player union at the time adamantly opposed the proposal, resulting in the cancellation of the World Series for the first time in 90 years. The strike lasted 232 days and led to the cancellation of 920 games overall. Baseball had a difficult time regaining fan support after the 1994 strike, and a second may be even more difficult to overcome (Smizik).
“Baseball is in a furious battle for entertainment dollars, and not just with other sports. Baseball is a business geared toward income. A business that shuts down, particularly a seasonal one, for any length of time is risking near-destruction (Smizik).” Owners have mortgages to pay and how could they come up with the money without baseball and vendors that rely on baseball would no longer be able to survive. When so many aspects rely on baseball being player, a potential shut down of the league would be devastating.
Alex Rodriguez, third baseman for the New York Yankees, was recently given a $252 million contract for 10 years. Without a salary cap, several players are paid extremely large salaries that many people feel they don’t deserve. Compared to the president of the Unites States, who is paid $200,000 annually, Julio Lugo is paid 3 million and wants to renegotiate. “Maybe star athletes would try harder if they didn’t have such whopping salaries. Maybe making salaries based more on performance would help” (Hiestand, 03c). One of the main arguments concerning the salary of athletes is that they are spoiled. Players often take advantage of their talent gearing their view toward money rather than the game. The whole situation is becoming out of control. With each passing year, the paycheck comparisons are getting larger. The nations 40 richest athletes watched their salaries swell by 24 percent last year to an average of $17 million per athlete (Scherer, 1). Without a salary cap, salaries will continue to increase compelling owners to raise ticket prices and memorabilia. It could get to the point where after clubs spend billions on a team and its players, the fans will have to start watching the games on pay-per-view instead of free broadcast channels. As long as the owners’ focus is not on controlling costs, they will continue to look for other revenue streams.
The game of baseball is not on an even playing field. Small market teams are put at a disadvantage because they cannot compete with other wealthier franchises. Therefore, the game of baseball is not nearly as fun for the fans. For example, last season, the New York Yankees payroll was $198,663,079 while the Florida Marlins payroll was only $14,998,500 (One Stop Baseball). The difference in salaries creates an obvious disadvantage for the smaller team. Owners attract the players with higher talent because they can give larger paychecks. The only way small market teams can get out of this dilemma is to continue to draft talent and build their farm system. The problem is that once a player realizes their talent, he will want a raise which his team cannot fulfill. Ultimately, teams with more money bring in these more talented players, making the competition lopsided.
For over a decade, the National Football League has withstood a salary cap where clubs must stay within a $41 million cap. The cap provides an atmosphere where any team can compete and make a run for the Super Bowl. No team in the NFL has been considered a dynasty, where a single team dominates for several years. In comparison to Major League Baseball, there have been several teams that have dominated either their division or league for long periods of time. As a result, many teams go decades without winning anything. Fans are growing tired and vexed at seeing their teams go nowhere in the post-season resulting in minimal fans attending games. The Tampa Bay Devil rays, who have never finished first in their division, averaged 16,901 fans per game while the New York Yankees averaged 51,858.
Three competitive teams are not enough to keep a profitable fan base and more importantly profitable revenue. There is obviously a salary cap issue in Major league Baseball and it needs to be fixed before the league is destroyed. In my mind the best solution would be a salary cap including revenue sharing. Revenue sharing would be where wealthier teams share their revenue with small market clubs. Even though baseball may not survive a strike a proposed salary cap may cause; it might be worth it in the long run because it would bring teams together in a fair and just playing field.. A salary cap is needed to keep baseball thriving in the future, and to keep the game exciting and enjoyable to watch for every fan.
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Postby Art Vandelay » Thu Nov 02, 2006 12:36 pm

A salary floor would do more good in baseball than a salary cap.
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Postby Spiegs1106 » Thu Nov 02, 2006 12:37 pm

Art Vandelay wrote:A salary floor would do more good in baseball than a salary cap.


What would a salary floor be?
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Postby Art Vandelay » Thu Nov 02, 2006 12:41 pm

Instead of saying that teams can only spend X amount of dollars on payroll, they would have to spend at least X amount. So small market teams that prosper from revenue sharing couldn't make millions of dollars off of the money they get from large market teams without putting that money back into the on-field product.
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Postby Coppermine » Thu Nov 02, 2006 1:14 pm

Art Vandelay wrote:Instead of saying that teams can only spend X amount of dollars on payroll, they would have to spend at least X amount. So small market teams that prosper from revenue sharing couldn't make millions of dollars off of the money they get from large market teams without putting that money back into the on-field product.


That makes sense since revenue sharing is in place; the Yankees can spend all they want, but have to throw a kickback to smaller market teams. Say the Royals get X amount of dollars for sucking and because no one goes to their games; they have to spend that money on free agency or improving the team itself, rather than on owners boxes and "fountain maintenance."
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Postby Art Vandelay » Thu Nov 02, 2006 1:24 pm

Coppermine wrote:
Art Vandelay wrote:Instead of saying that teams can only spend X amount of dollars on payroll, they would have to spend at least X amount. So small market teams that prosper from revenue sharing couldn't make millions of dollars off of the money they get from large market teams without putting that money back into the on-field product.


That makes sense since revenue sharing is in place; the Yankees can spend all they want, but have to throw a kickback to smaller market teams. Say the Royals get X amount of dollars for sucking and because no one goes to their games; they have to spend that money on free agency or improving the team itself, rather than on owners boxes and "fountain maintenance."


Exactly. Also, I just realized that I should have put "at least" in italics rather than "have." Hopefully I will be forgiven.
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Postby 1337_Dude » Thu Nov 02, 2006 2:20 pm

Art Vandelay wrote:A salary floor would do more good in baseball than a salary cap.

I'd also prefer a floor actually.
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Postby Big Pimpin » Thu Nov 02, 2006 2:32 pm

I think the floor is a fantastic idea, perhaps even coupled with a cap. I was a huge proponent of a cap a few years ago, as I hated seeing the Yanks spend like mad. However, as we've seen over the past few years, spending upwards of $200M and doubling (or even tripling) the payroll of most of your competitors doesn't guarantee anything. The floor would at least force the teams that seem to never spend (DRays, Royals, Pirates, Marlins most years, etc.) to put more money into their on-field product.

The biggest problem I see with the floor is that you can't force FAs to sign with teams. I know that teams like the Pirates have gone after FAs in the past, but haven't had the interest from the players they were targeting. How do you make a team spend if the players won't take their money? You can't force teams to overpay their current players just because there's a floor. So I think there would certainly be kinks to work out, but I agree that a floor (that worked properly and was enforceable) would be better than a cap.


1337_Dude wrote:I'd also prefer a floor actually.

Of course you would. What Yankee fan wouldn't? :-b

Art Vandelay wrote:Also, I just realized that I should have put "at least" in italics rather than "have." Hopefully I will be forgiven.

You can still be my latex salesman. ;-)
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Postby Art Vandelay » Thu Nov 02, 2006 2:42 pm

Big Pimpin wrote:The biggest problem I see with the floor is that you can't force FAs to sign with teams. I know that teams like the Pirates have gone after FAs in the past, but haven't had the interest from the players they were targeting. How do you make a team spend if the players won't take their money? You can't force teams to overpay their current players just because there's a floor. So I think there would certainly be kinks to work out, but I agree that a floor (that worked properly and was enforceable) would be better than a cap.


There would definitely be some kinks to work out, and no system is perfect, but maybe they could employ something like a reverse luxury tax. It'd be like the luxury tax in the NBA, only instead of matching dollar for dollar for everything over X amount, you'd have to pay dollar for dollar for everything under X amount. That still might lead to some inflated salaries, but it would most likely at least motivate teams to try to sign free agents since they'd end up having to pay the money anyway.

Also, maybe there could be some kind of exemption for a team if they were turned down by a free agent who accepted a lesser offer with a different team. Like if Tampa Bay offered someone $25 million over three years, but they accepted $22 million over three years to play for Philly, Tampa wouldn't have to pay the anti-luxury tax on that money.
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Postby RugbyD » Thu Nov 02, 2006 3:01 pm

if you go with a system of a salary cap along with guaranteed contracts that are a baseball institution, you are setting yourself up for big trouble. if a team signs a few bums for too much, it limits their ability to mitigate the effect of having bums eat up salary cap space and they will suck for a while, creating big fan disinterest. even if you compensate for that eliminating guaranteed contracts, you have the issue of players moving teams much more often b/c they will get cut frequently to make cap space. I see this as a problem because fans likely have a stronger identification with non-elite baseball players as opposed to other sports because they can see them in action 162 times a year. They won't be able to see as many familiar faces with players shuffling around at a higher rate, which would detract from the fan experience, not add to it. The importance of all this is relative of course.
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