• Does Baseball Need A Salary Cap?

    Posted by on February 19th, 2010 · Comments (21)

    About a week ago, I heard that Matthew Berry of ESPN was going to give a talk about his life in the sports world and how he made it there. Yesterday, Berry made the long trip from Bristol, Connecticut, to Boston to interact with a bunch of college students. I was excited to hear him talk about what it’s like to work at ESPN. And then he introduced himself.

    “Hi, my name is Matthew Berry. Before I start, I just want to let everyone know that I hate the Yankees.”

    The room exploded into applause. I suppose this is to be expected considering we’re at the heart of Red Sox Nation. I sat and looked down at the floor. My anti-Yankee buddies made it a point to clap especially hard. Ah, college.

    For the next hour, he gave a very interesting talk about his struggles and successes in his life. He’s a funny guy, and he had some zingers that probably shouldn’t be repeated here. He then took questions. I was one of the first to ask a question.

    “Why do you hate the Yankees?”

    I’ve asked this question several times in my life. To friends. To family (my dad is a Red Sox fan. It’s horrible). But I had never asked this question to a guy who works for ESPN, so I was intrigued as to what his answer would be.

    “Because they’re arrogant,” he immediately said. “They throw money at players and if they don’t succeed, then they just throw money at another player. Carl Pavano, Jaret Wright, Kei Igawa. No other team in their right mind would throw multi-year, $40 million contracts at these guys, but the Yankees do because they can. I just don’t like it.”

    Ok, fair enough. I didn’t really like his answer, but I don’t think I would have liked any answer he gave. Plus, I wasn’t in a position to argue with the guy. So I asked a follow-up question. “Does baseball need a salary cap?”

    “I think it does,” he said. “I think it’s unfair that the Yankees spend so much more than other teams. I think the game would be better off with a salary cap.”

    And then he went on to the next question. For the next hour, he answered questions ranging from his favorite Sportscenter anchor (he likes the combination of Josh Elliot and Hannah Storm the best) to his opinion of Ian Kinsler (he’s overrated).

    As this was going on, I was struggling with the idea of a salary cap in baseball. I’ve always been against a salary cap, and I suppose every Yankee fan is against a salary cap. But would the game be better off with a cap? Obviously, the Yankees wouldn’t. More teams would probably benefit. I didn’t want to admit that in my head. But perhaps it’s true.

    I decided I needed to get more perspective on the issue. I talked to one of my dorm-mates about it. He’s a Twins fan. First, I asked him, “Are the Yankees arrogant?”

    “Yeah.”

    “Why? Give me an answer that doesn’t involve money.”

    “Well, one of your best players of all time said that he wanted to thank the good Lord for making him a Yankee. I think that’s pretty arrogant.”

    This quote has always stood as a symbol for the Yankees franchise. If anything, it has added to Joe DiMaggio’s legacy as one of the greatest Yankees of all time. I always thought it was appropriate that players touched the sign before games. But I never thought of the quote as arrogant.

    My friend went on, “Joe DiMaggio – hell of a baseball player. But just an awful man.”

    We laughed.

    Then I asked about the salary cap. And as I expected, he complained that the Yankees spend too much money, which makes the game unfair. “The game that needs a salary cap the most doesn’t have one,” he said. “I hope the Yankees win the next five World Series. Then people will realize that something is wrong.”

    A lot of our opinions were challenged yesterday, and I say “our” because I know that many of you agree with me that baseball does not need a salary cap. But I’d like to hear your thoughts on the issue. What would be the benefits of a salary cap? What would be the problems with one? Try to be objective and look at the game as a whole, not just from the perspective of a Yankee fan.

    UPDATE: Mr. Berry actually responded to my question on ESPN.com. You can read his response here:

    http://espn.go.com/espn/page2/index?id=4982033

    Comments on Does Baseball Need A Salary Cap?

    1. Corey Italiano
      February 19th, 2010 | 3:22 pm

      Salary cap will never happen because…frankly…how would you do it?

      The Yankees payroll is locked for quite a few years…would you say ok, you can’t spend anymore until your under the salary cap? That would kill the Yankees for almost a decade, and that’s bad for baseball.

      Or would you say, all players contracts are void and start over? Nah the union would DEFINITELY not go for that.

      Or would you say, 10 years from now, it starts? (thus giving adequate time for all current players contracts to expire) Doubt that would work.

      I can’t think of any answer to that question, and unless someone does it will never happen.

    2. Jake1
      February 19th, 2010 | 3:56 pm

      hows the cap working out for the nba, nhl and the about to lockout the players nfl?

      this is america. if owners want to pay pavano 10 mil a yr or whatever than whos to say they cant?

      the cap has killed the nba. when was the last time u didnt hear about “expiring contracts”? the league is a joke. half the teams openly tank.

    3. jrk
      February 19th, 2010 | 4:08 pm

      I wish I still had the numbers, but when I was in undergrad studying sport management a few years ago, my Economics of Sports Leagues class presented some interesting research showing that in the past decade, using multiple data points and regression analysis, that the NFL actually exhibited LESS parity than MLB. I still find it amazing how teams like the Marlins won the World Series this decade (and are consistent competitors in the NL East) with such low payrolls. Examples like this, along with the New England Patriots consistent success this decade suggest how important management decisions are to a team’s success. I would argue, even more important than money (even though, yes, I realize that it is technically “easier” when you have the money to throw around). Can an argument be made that examples like the Marlins show a cap isn’t needed, because extraordinary spending exhibits diminishing returns?

    4. MJ Recanati
      February 19th, 2010 | 4:18 pm

      I fully acknowledge that I’m not really adding much to the conversation here…but I just had to say that I hate Matthew Berry because HE’S arrogant and I hate the Angels just as much for the same reason.

      As to the Twins fan that thinks the Yanks are arrogant based on what Joe DiMaggio famously said…shrug. I’m sure Joe Mauer thanks his deity of choice for makimg him a Twin, it’s just that saying it would make him dull and unoriginal after the quote has already been attributed to another player.

    5. MJ Recanati
      February 19th, 2010 | 4:18 pm

      MJ Recanati wrote:

      and I hate the Angels just as much for the same reason.

      For those that don’t get the connection, the Angels are Matthew Berry’s favorite team.

    6. Raf
      February 19th, 2010 | 4:32 pm

      Corey Italiano wrote:

      The Yankees payroll is locked for quite a few years…would you say ok, you can’t spend anymore until your under the salary cap? That would kill the Yankees for almost a decade

      No, it wouldn’t. They’d find another way to win. People have been trying to stop the Yankees from spending using whatever cockamamie scheme owners have designed. It hasn’t worked.

    7. Raf
      February 19th, 2010 | 4:41 pm

      jrk wrote:

      I still find it amazing how teams like the Marlins won the World Series this decade (and are consistent competitors in the NL East)

      I don’t think this statement is particularly accurate;

      6 .500+ finishes in their 17 year history, two of those seasons were 90+ win seasons (both years they went to the playoffs & won the WS), and IIRC they’ve never finished less than 6 games out.

    8. #15
      February 19th, 2010 | 4:51 pm

      Whole thing is misguided. The luxury tax will work, but only if there is a complimentary salary floor and an attendance minimum. Why should my hard earned money, spent supporting my team, get shipped off to, for example, Pittsburg when their owner pockets the dough, and when their fans don’t come out in droves? With respect to “small market fans” that hate the spending of the Yankees, I have a simply reply… “Show up or shut up.” No luxury tax money to any owner or organization that doesn’t 1) spend it to improve their team, and 2) draw at least, say 2.2 million fans (around the current median). Pittsburg drew ~ 1.6 last year. If they drew another 600K fans at ~ $35-40 dollars spent (tickets, food, parking, etc….), they’d have another ~ 20 million to spend to improve their ball club. Show up or shut up. The Yankees shouldn’t be penalized because they do a better job of extracting money from their fan base by keeping the team competitive. Remember, the Mets have the same potential market and just can’t get out of their own way.

    9. Corey Italiano
      February 19th, 2010 | 4:52 pm

      Raf wrote:

      No, it wouldn’t. They’d find another way to win. People have been trying to stop the Yankees from spending using whatever cockamamie scheme owners have designed. It hasn’t worked.

      How so? What would they do? There’s only so many players they can trade from the farm to plug holes, and if other teams have salary caps to worry about they’d be a lot more selective in who they’d receive in a trade.

    10. Corey Italiano
      February 19th, 2010 | 4:55 pm

      @ Corey Italiano:
      Also, when I’m talking about this, I’m not talking next year…I’m thinking about 2 years down the line+.

    11. hantu13
      February 19th, 2010 | 5:06 pm

      A salary cap is a good way for owners to control labor costs… And though people often try and link it with a salary floor, it still doesn’t solve the issue. A salary floor would put lousy teams in a position where they are forced to spend money on free agents who don’t meaningfully improve their chances. This is a good way to drive up replacement level players salaries, but won’t meaningfully impact competitive balance.

      The underlying issue is that certain market have an inherently higher revenue potential than others, and a smart team in a large market is very, very tough to beat.

      Anyone who is seriously thinking about this should read the Zumsteg Plan that Derek Zumsteg wrote a few years ago for bp..-

      http://www.baseballprospectus.com/news/20020815zumsteg.shtml

    12. Raf
      February 19th, 2010 | 5:36 pm

      #15 wrote:

      Whole thing is misguided. The luxury tax will work, but only if there is a complimentary salary floor and an attendance minimum.

      Salary floor won’t work either. What will happen is that you’ll have teams that will spend money for the sake of spending money. If you think you’ve seen some stupid contracts now, imagine how it will be when a team has to spend to maintain a minumum threshold.

      Teams will be run like the Houston Astros or the KC Royals, and there’ll be more of them.

    13. Raf
      February 19th, 2010 | 5:51 pm

      Corey Italiano wrote:

      Raf wrote:

      How so? What would they do? There’s only so many players they can trade from the farm to plug holes, and if other teams have salary caps to worry about they’d be a lot more selective in who they’d receive in a trade.

      Players can be traded from the farm system, players can be traded from the ML club, players can be signed as NDFA’s, players can be signed as IFA’s, players can be drafted and signed.

      Even without a cap, teams are selective about taking on a player, based on salary. You’ve seen cases where a team throws money on top of a deal (Rogers for Brosius & cash), or takes on less desirable contract as a throw in (Lowell, Beckett & Mota for Ramirez, Sanchez, Delgado & García), or takes on lesser player to get out from under the salary (Wetteland for Seguinol), you’ve seen cases where a player was willing to restructure his contract to make a deal work (Alex Rodriguez).

      You will always have teams that can spend money, you will always have teams that will run on a shoestring budget, you will always have teams in the middle, you will always have teams that are incompetent. That will not change, no matter what kind of system or system restraint you have in place.

    14. #15
      February 19th, 2010 | 6:36 pm

      @ Raf:

      Astros made the WS in’05 and got to the post season 6 times between 1997 and 2005. A lot of teams not wearing pinstripes would see that as a damn good run. They have a decent fan base/market to draw from, drew 31K a game last year, a nice ballpark, never get rained out at home, and can raise plenty of money when they put a competitive team on the field. They could easily add 3 – 4K fans a night if they could find a stud player from Mexico to fire up the locals.

      I live in Houston and I don’t know if they got any luxury money from the Yankees’ pocket. Irrespective of the situation in Houston, I still don’t like the idea that some of the money I spend each year to attend a few ballgames in Yankee Stadium will end up in the pocket of an owner that might, or might not, use it to build a better team, and I have a problem with teams that get financial support from Yankee fans without a requirement of support levels from their own fans.

      Now, KC only drew 1.8 million fans. Show up or shut up.

    15. Raf
      February 19th, 2010 | 7:10 pm

      I have a problem with teams that complain about salaries, then when they get a little money use it to sign players to crap contracts.

    16. jrk
      February 19th, 2010 | 7:21 pm

      @ Raf:
      Maybe I overstated their CONSISTENT “competitiveness” in the NL East, but winning it all in ’97, and then disbanding your entire team, then being able to win it all again in 2003, then disbanding, and now finishing last year only 6 games behind the NL Champion Phillies, a game ahead of Atlanta, and 17 games ahead of the Mets – that still says something especially given payroll differences. What is says is positive things about their management’s decision making, drafting, scouting, ability to be economical, etc.

    17. JeremyM
      February 19th, 2010 | 9:47 pm

      “They throw money at players and if they don’t succeed, then they just throw money at another player. Carl Pavano, Jaret Wright, Kei Igawa. No other team in their right mind would throw multi-year, $40 million contracts at these guys, but the Yankees do because they can. I just don’t like it.”

      I think this was his worst point. So he’s an Angels fan? It’s not like the Angels signed Gary Matthews Jr. and Brian Fuentes to horrible long-term contracts or anything…….

    18. JeremyM
      February 19th, 2010 | 9:48 pm

      Not to mention plenty of teams made similar offers to Pavano and likely Wright. Now Igawa, I’m not going to argue that one.

    19. Evan3457
      February 19th, 2010 | 11:25 pm

      Same sh…stuff, different day.

      Standard answer still applies:

      Salary cap?

      Don’t call us; call the MLBPA. (Though why they’d ever agree to one is beyond me…)

    20. JBerard
      February 20th, 2010 | 12:47 am

      A salary cap would be to the Yankees’ advantage.

      If the major league roster was limited to, say, $150 million, it might cause more teams than now to spend near that level because the Yankees, Angels, Red Sox and Mets would not have the chance at a significant advantage.

      This would also allow teams to keep more of their homegrown talent (ultimately it is more costly to keep a good team together than to start over every few years). The cap would keep a lid on spending on Igawa AND Pavano AND Sabathia.

      But the Major League Roster represents only the tip of the baseball iceberg. Consider the advantage to the Yankees, with an extra $75 million (the payroll savings to a cap of $150 million plus the luxury tax already in the budget) to spend. It can accelerate and expand their minor league operations, coaching at every level, scouting and facilities.

      Ultimately, a salary cap would create more of an imbalance because of the ability of big market teams with smarts to invest in a pipeline for the field or for trades.

      A salary cap, of course, will suppress average player salaries, too, putting more of a premium on having continuity and a plan. If you think the Yankees are a well-run organization, a salary cap plays to their strengths.

    21. Raf
      February 20th, 2010 | 11:08 am

      JBerard wrote:

      The cap would keep a lid on spending on Igawa AND Pavano AND Sabathia.

      No it wouldn’t. For example, posting fees and bonuses won’t or don’t count towards a salary cap.

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