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MLB needs a salary cap

brianod

By brianod
in Orioles Talk

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Beef Supreme Hangout Veteran Council

Beef Supreme

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If you bothered to read my original post, I proposed a 175 million cap instituted now that wouldn't hurt anyone but LA. My assumption is that it would be less painless and more acceptable to everyone. Also, I assume that those well under the cap would take years through increased revenue to be able to spend it.

MFY and Bosox exceed your proposed cap.

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BradyBunch All-Star

BradyBunch

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So, yea, it changes things. Not to the extent the salary cap advocates suggest, it's certainly no magic solution. But to say it doesn't change anything is being disingenuous.

How does it change who the big guys are? Revenue will still be the key. Yankees use that uncapped money and build state of the art facilities in whatever country they want.. while Rays couldn't. So it's the revenue gap that's the problem and salary cap doesn't fix a revenue problem.

The Champions League does bring with it revenues. I don't know if your numbers are correct. I'd be stunned if the Europa League came with anything at all like $50M in TV money. Tottenham's management basically said that they could take it or leave it because they get so little out of running off every few weeks to rural Norway or Belarus to play a match and wear down their players. And then go play the team below them in the Premier League at a disadvantage because they spent the week hanging out eating home cooking and practicing.

In European soccer (EPL in this case) you are given a fixed TV payment, facility payment, and prize money (25%).. the different is about ?50m difference between 1st and 20th. http://www.totalsportek.com/money/premier-league-tv-rights-money-distribution/

?50m = $76m.

Then Champions League payment for group stage is ?8.6 million ($9.6m). Then you have market pool payment which for England, France, Germany and Spain is huge as it's payments are based on tv market size.. roughly $20m plus per team that gets to group stage. http://themarketmogul.com/money-behind-champions-league/

Europa League is small beans compared to Champions League but you can easily get $20m in it when included market pool payment.

Tottenham's management says that cause they want to control costs, fans on the other hand won't be happy.

Now don't get me wrong, I am actually a Celtic FC fan which makes me forever the Rays of Soccer. Playing in a Scotland means very little TV money for SPL (?15m a year), but Celtic heavily relies on Champions Leauge and Europa League money for buying players as getting in to group stages and past it would DOUBLE their league tv money. ?32.7m in Champions League money in 2012 for Celtic. Celtic is dominate in the SPL because it has ticket revenue and name brand. They also brand very well. http://www.theguardian.com/football/blog/2013/feb/09/celtic-finances-champions-league

The reason why Celtic can do these things is because those Big money clubs are wasting money while Celtic is scouting and "recruiting" in places they'd never think of.

There is no such thing as Laissez Faire period. Maybe that's your goal or dream, but every sports team gets subsidized in some way, from either the league, the government, their benefactors, or all of the above. We don't live in a black or white world.

I didn't mean it that way.. Just on salary cap stuff. I know I'd never get Laissez Faire.

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DrungoHazewood Hangout Grand Counsel

DrungoHazewood

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If you bothered to read my original post, I proposed a 175 million cap instituted now that wouldn't hurt anyone but LA. My assumption is that it would be less painless and more acceptable to everyone. Also, I assume that those well under the cap would take years through increased revenue to be able to spend it.

There's the rub (short segue - what the heck does that phrase even mean?). If you set a cap at $175M you only minimally impact the Dodgers and a couple others, so to all but a few teams it's like there's no cap at all. If you set it much lower you impact a bunch of teams and there's going to be big pushback not only from the MLBPA, owners, but also fans who'll react negatively to the resulting roster churn and loss of key and/or favorite players to get under the cap. The most realistic way to get where you want to go is to just wait. Wait and hope that the cable bubble bursts sooner than later, and that most people will watch baseball online, and that MLBAM revenues will continue to be shared equally.

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spiritof66 Hangout Grand Counsel

spiritof66

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I agree to a point. Even if you expanded and added three new NY metro area teams in 2016 they would be entering a market where a large percentage of the population has already picked the Yanks and a small percentage the Mets to be their team. I don't know that there are a whole lot of undecideds. It will take literally generations for those teams to build up a strong, lasting fanbase. And I don't know how they would work out cable deals. I would guess that if everyone in the great NYC area currently pays a mandatory $5 on their cable bill for YES, there would be something of a backlash if they then had to pay an addition $10(?) for a new RSN or RSNs for the new teams. And all of this assumes that they somehow get around the to-the-death opposition of the Yanks and Mets without having to pay them $billions for their loss in revenues. The MASN dispute would be the War of 1812 compared to the YES dispute's WWII.

I have thought about this, and talked to Yankee and Met fans about it, a fair amount over the last 15 years or so. First of all, it will never happen under the current regime, since the MLB Constitution makes NY and surrounding counties the "operating territory" of the Yankees and Mets, unlike the Orioles' situation in Washington. http://bizofbaseball.com/docs/MLConsititutionJune2005Update.pdf I think Congressional action changing baseball's antitrust status would be required. Then, if the situation changed so that a third team could come in, it would have to worry that if it succeeded an additional team or teams would follow.

A new team in the NY area would face substantial hurdles in finding a site for, and building, a stadium. They probably would end up in New Jersey or on Long Island. (Brooklyn would be a possibility.) But the stadium issue also would provide an opportunity since neither the new Yankee Stadium nor Citi Field is very good in terms of aesthetics or fan experience.

I think you exaggerate the difficulty a third NY team would face in building a fan base. New York always has a large population of new arrivals who might embrace a new team, and moneyed people who might be eager to get in on the ground floor--if the team wins. In NY, compared to other cities, you don't need to rely as much on a strong, lasting fanbase to fill a stadium (and, I think, attract a lucrative cable TV contract). You just need to win. In 1983, the Mets' attendance was about half the Yankees'. Within two years, the Mets were outdrawing the Yankees, by a wide margin for several years. When the Mets were winning and the Yankees weren't, NY was decidedly a Mets' town. The Mets have spent much of the last 25 years squandering that following, and now they're rebuilding it, with both the advantage of a fanbase to build from and the disadvantage of animosity toward present ownership.

It would be an expensive and uncertain proposition, but I think a new NY team playing in an attractive stadium convenient to public transportation--if it wins--could be financially successful. Anyway, I am pretty sure neither of us will ever have the chance to be proved wrong.

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osfan83 Major Leaguer Rising Star

osfan83

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How does it change who the big guys are? Revenue will still be the key. Yankees use that uncapped money and build state of the art facilities in whatever country they want.. while Rays couldn't. So it's the revenue gap that's the problem and salary cap doesn't fix a revenue problem.

There is nothing stopping the Yanks from doing that now. Plus I would say their advantage comes with more risk from the above suggestion. I would say spending $100 million on Mike Trout is more of a sure bet than spending that same money on upgraded facilities in the DR.

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Can_of_corn Hangout Grand Counsel

Can_of_corn

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There's the rub (short segue - what the heck does that phrase even mean?). If you set a cap at $175M you only minimally impact the Dodgers and a couple others, so to all but a few teams it's like there's no cap at all. If you set it much lower you impact a bunch of teams and there's going to be big pushback not only from the MLBPA, owners, but also fans who'll react negatively to the resulting roster churn and loss of key and/or favorite players to get under the cap. The most realistic way to get where you want to go is to just wait. Wait and hope that the cable bubble bursts sooner than later, and that most people will watch baseball online, and that MLBAM revenues will continue to be shared equally.

It's a bowling reference. Think of it like the area of the old turf in Toronto that got pushed up from the broke pipes.

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osfan83 Major Leaguer Rising Star

osfan83

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I don't think any of the other major sports are better off for having a salary cap. Baseball has found other ways to ensure competitive balance.

We don't really know that....if the Knicks could spend at their will, maybe they would have both Lebron and Steph Curry on the team. (of course knowing Knicks current management they would probably screw it up somehow).

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DrungoHazewood Hangout Grand Counsel

DrungoHazewood

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We don't really know that....if the Knicks could spend at their will, maybe they would have both Lebron and Steph Curry on the team. (of course knowing Knicks current management they would probably screw it up somehow).

It may be that a cap is most effective in a sport like basketball where a small number of stars can disproportionately effect a team's fortunes. I don't know much about basketball, but I get the feeling that a LeBron is worth the equivalent of 15? WAR or more, so if you can buy a few stars your team can go from also-rans to Champs. If a NYC or LA team could go buy 3-4 top free agents they might never lose.

Football, despite the fact they've had a cap for a long time, might be the other end of the scale. I think the experience with the strike in the 80s shows that (or showed back then) that there were "replacement level" players who had been unemployed who were probably as good as or better than the guys actually on the team. So outside of a few key skill players a cap might have the least effect in football. I'm sure some football analytics guys would know more than me on this subject...

And soccer is a good test case for what happens when teams are able to generate as much revenue as they want, even outside the league structure, and spend all of it and more (more being the personal wealth of the owner) on payroll. They have put some "fair play" restrictions in place, as BradyBunch previously alluded to, so they supposedly have to keep expenditures at or below revenues. But it's definitely true that most European leagues have a handful of exceptionally rich teams that almost always finish at or near the top of their domestic leagues. And its usually quite difficult to break into that top tier without an infusion of cash. It's the standard laundry list of huge clubs - Barcelona, Real Madrid, Bayern, Chelsea, Man U, Man City, Arsenal, maybe Juventus, Paris St. Germain, in smaller countries teams like Ajax or Celtic... if they ever finish out of Champions League qualification (top 3-4 in most leagues, top ~2 in smaller countries) in any year people get fired, there's turmoil, hate and discontent, mad spending sprees.

Compare: The Red Sox have finished last in the division two of the last three years and had one of the worst records in MLB. Man U had a terrible 2013-14 season, fired their new manager in mid-season... and finished with a winning record (19-7-12), 7th of 20 in the table. The big soccer clubs have so many resources and almost unlimited ability to spend, that it's essentially impossible for them to have a losing record, or be threatened with relegation.

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