Salary Cap & Revenue Sharing for MLB

April 18, 2009 |

I would like to thank Nestor again for giving me my 5 minutes of fame on Friday.  Nasty was anything but that. I was a little nervous and he did everything he could to settle me down. He came out and talked to us during the breaks and while other contestants were on the air. He was a gracious host. I had a great time and look forward to doing it again!

 

For those of you who didn’t catch my spot here’s what my airtime was all about.

 

I am proposing that MLB institute a hard salary cap with a revenue sharing plan similar to the NFL’s.  I used the revenue figures I found on the net from the Forbes April 16, 2008 issue and their report titled “The Business of Baseball.”  I found total team payroll from 1999-2008 on the bizofbaseball.com. The DREADED Yankees led the league in both categories. They also claimed an operating loss for the year which I find hard to believe! The table shows the top 5 spending clubs, the Orioles who ranked 15th in spending, and the bottom 5 spenders. 

                               

                                                                                                                                            

Team                     10 yr Payroll            ’08 Rev in Millions    Playoff Apr.     WS Champs

Yankees

1.66 billion

327

9

2

Red Sox

1.20 billion

263

6

2

Mets

1.00 billion

235

3

0

Dodgers

1.00 billion

224

3

0

Braves

1.00 billion

199

7

0

Orioles

742 million

168

0

0

Royals

439 million

131

0

0

Nats/Expos

433 million

153

0

0

Pirates

421 million

139

0

0

Rays

387 million

138

1

0

Marlins

367 million

128

1

1

 

The 5 top spending clubs were in the playoffs 28 times and won 4 WS. If you count the next 3 highest spenders: Cubs, Angels, & Cardinals the playoff appearances increase to 42 and the WS titles grow to 6.  Spending the most on salaries doesn’t guarantee winning a title but it will buy your way into the playoffs.

 

At least 1 of the top 8 spenders has been in the World Series 8 of the past 10 yrs. 2 teams from the top 8 spenders have been in the World Series 3 times: 1999 when the Yankees played Braves, in 2000 Yankees played the Mets, and in 2004 when the Red Sox played the Cardinals.

                                 

Small and Medium market teams can make a run at the playoffs and a championship but they do not have the resources to sustain a team like the big boys. The break- up of the 97 & 03 Marlins is an example of this. They couldn’t afford to keep their homegrown talent so they broke up their team. Both the Indians and the Brewers tried to resign C.C. Sabathia. He claimed he wanted to play in the National League and on the West Coast.  Instead, he wound up signing with the Yankees for 161 million.

 

All of the discussions I’ve heard always center on a hard cap, with no discussion of revenue sharing, and I don’t know why.  To give fans hope and more teams a realistic chance at making playoffs MLB needs to institute a hard salary cap with a revenue sharing plan.

The league office should negotiate all TV contracts with the money being distributed equally amongst the 30 teams. Teams could keep their local radio and stadium naming rights revenue, while still splitting the gate with the visiting team.  

 

The plan could be phased in the over 4 yrs allowing teams to adjust their payrolls in preparation for the hard cap. In the 5th yr each team would get 130 million for player salaries. Each team must spend a minimum of 118 million on player salaries. Teams could decide how much space they would leave to make trades to replace an injured player and to make deadline deals.  

 

The total for 2009 player salaries is expected to be $2.5 billion with projected revenues of $5.5 billion. Under my revenue sharing plan, the player’s salaries share would increase to at least $3.54 billion.  This should convince the players union to go along with a hard cap. The harder sell will be to get the major market owners to go along. It will take a strong commissioner like Kenesaw Mountain Landis to force it through for the good of the entire league.

 

If MLB doesn’t expand its revenue sharing plan all of Andy McPhail’s hard work will be for naught. The Yankees, Angels, or Cubs will wait for Weiters, Tillman, Matusz, etc to be eligible for free agency. Then we will “Wave some of them Bye, Bye!”

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