Senator Palpatine and Anakin Skywalker Looking Over Their Empire
Now that the 2009 season has come to a close it’s time to start talking about off-season issues.
An interesting topic was on the docket this morning as the folks on Baseball This Morning (XM-175 from 7:00 – 10:00 Eastern) discussed some of the issues facing the general managers this week as they begin the general managers’ off-season meetings. The question was posed, “if you could change one thing about baseball, what would that be?”
A lot of listeners called in and discussed things like: (a) whether or not to let the National League get the DH (or force the American League to lose the DH); (b) whether or not to continue to allow the World Series home-field advantage be determined by the All-Star game or to go by some other merit based achievement; (c) the expansion or abolition of instant replay; and the most popular (d) what to do about the economic disparity of the sport.
After listening to the entire show and now hearing former Nationals general manager Jim Bowden expand on the topic, I have decided to give my cents to the argument on how to make the economic situation better.
When first addressing this subject, the immediate, knee-jerk reaction that everyone wants to touch upon is a “salary cap.” Many people point to the NFL and the NBA as successful examples of how a salary cap works. Well, I’ll admit that I don’t watch any professional basketball (it sucks) but I remember the 1980’s successful franchises: Boston, Los Angeles and Detroit (and eventually Chicago). The last two franchises to win the championships? Boston and Los Angeles and recently Detroit won a couple as well. It’s not like the NBA is spreading the wealth.
The NFL which is supposed to be king actually works under a much more stringent cap than any other professional league with a cap. Over the course of the 15 years the NFL has operated under a salary cap, the league has seen 11 different teams win the big one while MLB has only seen nine over that same period of time. But a little further analysis shows that despite having more teams make the playoffs every year, the NFL has sent 20 of its 32 teams to the Super Bowl while MLB has sent 16 of its 30 teams to the World Series. Not exactly a huge difference and the NFL has a hard cap. Even further, the cap really hasn’t helped defeat the notion of building a sustained winner – Pittsburgh, Denver, New England and Indianapolis have all proven to be perennial powerhouses in the NFL and make the playoffs seemingly every year and Pittsburgh, Denver and New England all have multiple Super Bowl championships in the salary cap era (Pittsburgh has been to three Super Bowls, won two of them; New England has been to five Super Bowls, won three of them; and Denver has been to and won two Super Bowls).
It seems like MLB’s economic problems all stem from one team: The New York Yankees. The Yankees spend the kind of money that the other 29 teams simply cannot generate on their own – but is a salary cap really the answer?
The current economic system of “revenue sharing” is working according to the folks who make a living covering these sorts of things – the good folks at Baseball Prospectus. In an article published on August 12th by Shawn Hoffman, B.P. posits that the system needs some tweaking but essentially the system may be a better fit for baseball than the hard cap of the NFL or the soft cap of the NBA.
A lot of listeners called in and discussed things like: (a) whether or not to let the National League get the DH (or force the American League to lose the DH); (b) whether or not to continue to allow the World Series home-field advantage be determined by the All-Star game or to go by some other merit based achievement; (c) the expansion or abolition of instant replay; and the most popular (d) what to do about the economic disparity of the sport.
After listening to the entire show and now hearing former Nationals general manager Jim Bowden expand on the topic, I have decided to give my cents to the argument on how to make the economic situation better.
When first addressing this subject, the immediate, knee-jerk reaction that everyone wants to touch upon is a “salary cap.” Many people point to the NFL and the NBA as successful examples of how a salary cap works. Well, I’ll admit that I don’t watch any professional basketball (it sucks) but I remember the 1980’s successful franchises: Boston, Los Angeles and Detroit (and eventually Chicago). The last two franchises to win the championships? Boston and Los Angeles and recently Detroit won a couple as well. It’s not like the NBA is spreading the wealth.
The NFL which is supposed to be king actually works under a much more stringent cap than any other professional league with a cap. Over the course of the 15 years the NFL has operated under a salary cap, the league has seen 11 different teams win the big one while MLB has only seen nine over that same period of time. But a little further analysis shows that despite having more teams make the playoffs every year, the NFL has sent 20 of its 32 teams to the Super Bowl while MLB has sent 16 of its 30 teams to the World Series. Not exactly a huge difference and the NFL has a hard cap. Even further, the cap really hasn’t helped defeat the notion of building a sustained winner – Pittsburgh, Denver, New England and Indianapolis have all proven to be perennial powerhouses in the NFL and make the playoffs seemingly every year and Pittsburgh, Denver and New England all have multiple Super Bowl championships in the salary cap era (Pittsburgh has been to three Super Bowls, won two of them; New England has been to five Super Bowls, won three of them; and Denver has been to and won two Super Bowls).
It seems like MLB’s economic problems all stem from one team: The New York Yankees. The Yankees spend the kind of money that the other 29 teams simply cannot generate on their own – but is a salary cap really the answer?
The current economic system of “revenue sharing” is working according to the folks who make a living covering these sorts of things – the good folks at Baseball Prospectus. In an article published on August 12th by Shawn Hoffman, B.P. posits that the system needs some tweaking but essentially the system may be a better fit for baseball than the hard cap of the NFL or the soft cap of the NBA.
You'd be hard-pressed to find a solid subset of franchises that's fully
satisfied with the status quo going forward. But the thing is, baseball's
current revenue sharing system has actually worked pretty well—the goal is to
balance competition and profitability, and MLB has had a pretty good share of
both over the past few years. If the owners were to completely reinvent the
wheel for the next CBA, they would be taking on a significant amount of risk,
which really isn't necessary given how well the current system has worked.
Mr. Hoffman goes into a little detail as to how the current revenue sharing system works – albeit an over-simplified version - but he does a great job of breaking down the system into material that a dope like me can understand.
Essentially the current system takes the amount of money a team spends over the “threshold,” assigns a percentage of that money as form of “luxury tax” and combines that with the revenue generated from national media coverage and splits that pot between baseball’s 30 teams. Currently, only the Yankees are paying the luxury tax.
We can run through an example. The teams brought in about $6 billion in revenue
last year, and will probably be right around that figure again in 2009. (I'm not
counting the half-billion or so that flows into MLB Advanced Media and MLB
Network, but doesn't reach the teams themselves.) Let's assume that about 20
percent, or $1.2 billion, came from national sources. That means each team would
collect about $40 million.
To me this means that the clubs who are the beneficiaries of the revenue that the Yankees (and a couple of other teams) are throwing into the pot, they’d be loads better than they are currently.
Here’s where I will veer from the Mr. Hoffman’s theory. Since the Yankees seem to have a bottomless pit of money, let’s test that theory and make it a “dollar-for-dollar” system. That way, if the Yankees want to push the payroll to $250,000,000 every year, so be it – they’ll just continue to pay a higher luxury tax than anyone else. I’d even see if I can push it one step further. Perhaps you could penalize teams that go over the payroll threshold by taking away a percentage of the national media income the league gets from Fox, ESPN and TBS. This could be offset by only airing a certain number of Yankee games on the national networks, but it will certainly make the ratings at YES go up as they carry more games and the demand for the network goes up.
It’s an overly simple answer to a much more complex problem. But it seems to me that if a moron like me can come up with something, then the folks who know these things a lot better than I do can get something done.
At the end of the day, I am strongly against a salary cap. I cannot watch the NBA anymore (though it may have less to do with salary structure and more to do with the style of play of the modern game) and I can’t help but notice that what the NFL touts as “parity” to me looks more like “mediocrity.”
I honestly believe that while I hate watching the Yankees win a World Series that they essentially bought, this sort of thing is good for baseball in the long-run. Over the course of history, a good, entertaining play or film always gave you a hero to root for and a villain to root against. There is no more polarizing organization in all of sports than the Yankees. Baseball needs the Yankees to be good so everyone pays attention.
For what it’s worth, Shawn Hoffman does a much better job of describing why the system of MLB is better than the NFL or the NBA. I recommend purchasing a subscription to Baseball Prospectus and reading up on topics such as these because with the expiration of the Collective Bargaining Agreement on the horizon, this could become a huge issue if the Yankees win it all two more times in a row.
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