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Salary Cap In Baseball

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Postby thomasps3 » Thu Nov 02, 2006 3:17 pm

Spiegs, your topic is one I am currently doing research on. It is quite compelling and has received a lot of scholarly research in the recent past. You may want to consult a book by Andrew Zimbalist, who besides being a professor of economics at Smith College has also done work for the United Nations. He is an avid baseball fan and has written two books and several articles. The book you may want to check out is "Baseball and Billions". It's an indepth look at the business of baseball, and the fuzzy accounting that takes place there.

As fans, what we see are the millions and millions of dollars players receive to play a game that we have loved since we were kids. However, there is one thing as fans we do not ever look at - the antitrust exemption baseball enjoys.

To make a long story short, baseball as a regulated monopoly forces everyone to pay. Cities are asked to fork over hundreds of millions of dollars for stadiums, fans are asked to pay cable fees to watch games, and the federal government agrees to let the power broker owners maintain their monopoly thru a limited antitrust exemption. No other sports league has it. Not the NFL. Not the NHL. Not the NBA. Only baseball enjoys this exemption, and it is no wonder they continually seek new ways to regulate this mess they have created.

As fans, owners are directing us to the players as the fault. Here is the cold hard fact:

51,000 people, on average, at a New York Yankees game is essentially saying that the cost to go to a game is worth the price they are paying.

Some other tidbits that are interesting as well:

Paul Beeston, a former MLB Chief Operating Officer(COO, 3rd in command) has said in the past that "Under general accounting principles, I can turn a $4MM profit into a $2MM loss and I can get every national accounting firm to agree with me."

These things may seem a bit off topic, but think about exactly who is doing the spending the next time you read the newspaper.

Theo? George? I myself am a Red Sox fan, and I know going to a game is big $$.

These are the guys who are driving the salaries, and the players are the goldminers who have struck the mother lode.

This may seem longwinded, but back in 1976, owners had the opportunity to create a negotiated settlement with the players and refused. They believed the reserve clause as it stood was the only way they could survive. Quite the contrary, since the advent of free agency, teams such as the Yankees and Dodgers have maintained a competitive advantage, however, it has been a greatly reduced advantage, and one need look no furhter than a World Series Champion St.L Cardinals team that won 83 games and had the 11th highest payroll in the game.

Other recent champions and payroll notes:
2005 WS White Sox - 13th highest payroll
2004 WS Red Sox - 2nd highest payroll
2003 WS Florida Marlins - 25th highest payroll
2002 WS LA Angels - 15th highest payroll

I agree, however, that the costs of the game have spiraled out of control. The answer lies not in a salary cap, however. The true answer, I hope to have convinced you, is in a re-examination of the removal of the antitrust exemption baseball currently enjoys.
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Postby gfantasy » Thu Nov 02, 2006 5:29 pm

I dont know about a cap or a floor. However, teams like the Royals, Pirates and Rays should be required to TRY. I mean look at the Tigers and the Marlins...
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Postby mweir145 » Thu Nov 02, 2006 5:33 pm

Personally, I'd like Major League Baseball to implement a strict cap much like hockey did a few years ago. A floor would also be useful as well for teams like the Marlins who don't seem to want to spend anything. It can only make the game more competitive, keep teams involved in the playoff races late in the season, and make all the teams generally more profitable and successful. I like how it changed hockey. Before the Lockout, all you saw was the same big-spending teams at the top every year (Red Wings, Avalanche, Flyers, Leafs...though they never won a thing :-P ) just like it is with the Yankees and Red Sox right now in baseball. Fans were losing interest in the small-market cities because they never were able to keep their players, or actually win anything. To compare it back to baseball (and to the team I follow), while the Jays certainly don't play in a small market, the same thing has been happening in Toronto for years. When you're in a division where 2 teams consistently outspend you by atleast 50 million, you're going to have fans give up, and that would explain the relatively low attendance figures this major city has had over the last few years, and low profit margin (before this year). Even though they were able to get an average of 30,000+ this season, that's still nothing for a city of Toronto's size. Clearly I'm biased here (as I would love nothing better than to see the Yankees/Red Sox's payroll drop), but I just can't see how it would hurt the majority at all. In the end though, it's really not worth that much of a discussion as the players association would likely never allow it to happen (that, and taking away this money advantage would upset the most profitable team in baseball, the Yankees).
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Postby j_d_mcnugent » Thu Nov 02, 2006 6:23 pm

a hard cap does one thing and one thing only---line the owner's pockets.

a salary cap isnt going to lower ticket prices. ticket prices are set by market demand. the teams with the highest ticket prices are also the teams with the best attendance so the market clearly supports those prices. in addition, rampant ticket scalping in some areas means those teams could further increase ticket prices without ill effect. ticket prices arent tied to payroll, they are set to maximize profits.

i am not so sure a salary cap would directly lead to more competitive balance either. as we've seen, payroll has a low correlation to playoff success. there have been teams that spend a ton and go no where (like the mets of a few years ago) and teams that are at the lower/middle end of the payroll spectrum win the WS or make the playoffs. all the money in the world isnt going to help you win if you are just going to spend it on mo vaughn or carl pavano.

there are really more complex issues at play here. revenue sharing might need to be revamped a little bit. teams should be required to spend that money on the team in some capacity (scouting, stadium, payroll, whatever...as long as it doesnt end up in an owner's pocket). maybe the draft should be changed as well. baseball isnt like the other sports in that regard. if you have a top five pick in basketball or football you are almost always going to get a productive player. the odds are much less in baseball. it also takes several more years to see those players play in the major leagues. they should make foreign players go through the draft or award extra draft picks to the bottom teams. if you want more balance in the league i think a hard cap is the wrong way to go about it.
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Postby Tavish » Thu Nov 02, 2006 6:43 pm

Big Pimpin wrote: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.


It doesn't guarentee a Championship, but it can guarentee you some things.

Since 2001 when the Yankees first broke the $100 Million payroll mark (6 seasons)

(3) 100 Win Seasons (StL has 2, Atl has 2, SF, Sea, Oak have 1, no other team does)
(6) 90 Win Seasons ( Oak is the only other team with at least 5)
(6) Division Titles (Atlanta is the only other team with at least 5)
(2) World Series Apperances tied with St Louis as the only teams with multiple apperances.
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Postby 1337_Dude » Thu Nov 02, 2006 11:24 pm

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

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

Haha yea. If there was a floor though, I wouldn't be against a cap.
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Postby blankman » Fri Nov 03, 2006 2:41 pm

You can always rely on a Red Sox fan to whine about the Yankees and demand a salary cap. How hypocritical.
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Postby gfantasy » Fri Nov 03, 2006 2:58 pm

blankman wrote:You can always rely on a Red Sox fan to whine about the Yankees and demand a salary cap. How hypocritical.


The Yanks and Sox could argue all they want. Neither one is winning championships...
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Postby acsguitar » Fri Nov 03, 2006 3:07 pm

blankman wrote:You can always rely on a Red Sox fan to whine about the Yankees and demand a salary cap. How hypocritical.


Yea like the redsox can't spend money. Its that no one wants to play in that smelly city with the stupid head park

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Postby mak1277 » Fri Nov 03, 2006 4:46 pm

1337_Dude wrote:
Art Vandelay wrote:A salary floor would do more good in baseball than a salary cap.

I'd also prefer a floor actually.


A floor's not going to do anything except guarantee that teams like Pittsburgh and KC spend a butt-load of money on crummy guys like Jeromy Burnitz. Making a team spend money isn't the same thing as making a team spend money well.
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