Sunday, February 15, 2009

Salary Capping

I've never been pro-salary cap. I simply cannot understand the rationale behind enforcing a cap. Yes, the Yankees spend way more money then the lower class citizen's, and yes there is a decent relationship between the playoffs and spending, however it is not a direct relationship.

That is, spending does not invariably get a team into the post-season. It does, ensure the team has a shot at being competitive, but so too does smart management like we have seen in Oakland and Minnesota over the last decade.

Sports fans will point to the other sports leagues as examples of why there should be a salary cap in baseball. As if there isn't competitive imbalance in basketball (Milwaukee anyone?), football (the dynasty-esqe Patriots), or hockey (see Detroit). For the most part, people ignore the fact that the Cincinnati Bengals have been awful for the better part of two decades. That the Los Angeles Kings are not looking to recreate Wayne Gretzky. Or that the Los Angeles Clippers have essentially always been awful.

Let's use a hypothetical cap which Shawn Hoffman of Squawking Baseball suggests in an outstanding article at Baseball Prospectus. Shawn suggests that the cap would sit around $100M and the floor would be over $75M. At a cap of $100M there would only be nine teams that would have to lower their payroll. A floor of $75M would increase the payroll of at least eleven teams. In other words, the rebuilding efforts of the Washington Nationals, Kansas City Royals, etc would be squashed as they would have to dish out money to players without long term value.

Even if those teams could remain on track with their respective building efforts, another issue exists, one which fans ignore, one that is of incredible importance. That is the fact that baseball is simply different then the other sports. In football and basketball there isn't much a team can do with their excess revenue. Sure they can hire better coaches, supply superior medical facilities, but for the most part, teams operate on an even playing field to begin with.

Not so with baseball. In baseball, not every player is involved in the amateur draft. Between professionals from international leagues overseas, or kids from Latin America, the teams with excess cash could simply blow the small market clubs out of the water in those markets.

That is, in basketball a player is drafted, signed, and added to the roster of the pro team. He immediately becomes a contributor, if only marginally. It is very rare for a player to be drafted early and sent to the D-League. For the most part, players are NBA-ready on draft day.

In baseball this could not be further from the case. Even players with three or four years of college experience under their belts will need a year or two (at least) of minor league seasoning before they are ready to be called up. Due to this, a player's salary could not be justifiably added to the Major League payroll.

Adding more confusion to this is in regards to how a player is acquired. Taking a look at the draft we see 'over slot' bonuses handed out all the time. Imagine if the Yankees were spending $100M less on their big league roster? You better believe that they are going to spend it somewhere, the first place being the draft.

Now imagine the Yankees setting aside an extra $40-60M for the first year player draft. Imagine a top-10 player sitting there with Scott Boras as his agent, knowing full well that the Yankees are going to pay whatever the player asks. The $6M+ that Pedro Alvarez received would be half of what the Yankees would have available for the drafts top prospect. Where are the Pirates going to get $10M to sign this kid?

But let's take this a step further. Now we're looking at the top 10 prospects in the first year player draft, each knowing the Yankees have a boat load of cash to spend on draft day. Do you think the teams with lesser financial luxuries will have a leg to negotiate with? No way!

So one will say, 'easy solution, we cap the draft spending'. Well, MLB has tried that, so has the NFL. It simply does not work.

However, let's pretend that this does hypothetically occur. The Yankees still have that additional $100M that they aren't allowed to spend on their big league roster or on the amateur draft. Where does that money go?

How about to the international market, a market which is impossible to cap because of how large of a market we are talking about. Also, what would be capped? Would teams be limited at how many academies they open? Certainly no one is going to argue that the Yankees offer less opportunity (albeit, while being Un-American) to the have-nots of the world.

So now we have the Yankees blowing the lid off the international market. Michel Inoa, here are your pinstripes. Felix Hernandez, welcome to the Bronx. Juan Duran, you never knew the Reds.

The simple fact remains that there are teams that simply have more money then those they are competing against. Is it absolutely fair? I suppose it isn't. But baseball cannot be fair without devastating the sport and it's current player development.


Let's stop this call for a salary cap. Let's remember that the money the Yankees bring in isn't going to stop them from spending, rather, it will cause them to spend money elsewhere. For now, as a fan of a small market club, I don't mind the current financial environment. I don't mind that the Yankees are in a market and a financial position where winning today is everything. That mentality forces the club to spend great sums of cash in order to build the best team possible.

However, that is for today. That is the Yankees building a team of players based on what they have done in the past. Who thinks the CC Sabathia or AJ Burnett deals won't look like atrocities toward the end of their respective contracts?

So I suppose it is unfair that the Indians didn't have a chance to resign Sabathia long term, but in 2013, I'm sure Indians fans coast to coast will be smiling that Sabathia is not 'anchoring' (literally and figuratively) the Tribe's rotation.

Time to re-build.

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