Mike Freire - Restoring Competitive Balance


Recently, Mack posted one of his "From The Desk" articles and there was an entry that paraphrased "Super Agent" Scott Boras and his concerns about the lack of "competitive balance" in Major League Baseball. Another way of stating the obvious is that the "rich" teams are dominating the landscape and the "dregs" are left to fight over the scraps and draft positions.

What was mildly amusing is that agents are partially responsible for the current state of the "salary madness" that has infected the baseball landscape. Furthermore, baseball is the only major sports league (including football, basketball and hockey) that does not have a traditional salary cap structure for teams to follow. Is it really a surprise that the structure has gotten pretty far out of whack?

Below, I have listed the 2018 MLB Team Salary Figures for general reference. With that said, the team with the largest payroll expenditure (Boston) also won the World Series. Furthermore, their total outlay of cash was almost FOUR TIMES more then the team at the bottom of the barrel (Tampa Bay). 

Or, consider that the average payroll for all thirty teams was a shade over $139 milllion dollars. The Red Sox were roughly $90 million dollars OVER the average, or basically what the Pirates spent as an organization. Does that sound like a recipe for competitive balance?

The top ten teams in payroll last year (see below) had an average record of 91-71 and the group included three of the final four teams left standing in the playoffs, plus both World Series combatants and the eventual champion. So, despite a few teams that didn't get their money's worth (San Francisco, Washington, Los Angeles Angels), there appears to be some correlation between spending money and posting a winning record.

***On a side note, for all the crap the fans throw at the Wilpons, the Mets were 12th in all of baseball last year with a payroll of just over $150 million dollars. Granted, we all want that number to rise, but it is far from the bottom teams on this list.  

Before anyone accuses me of being Socialist, I know that you cannot have everyone with exactly the same amount of money to spend. What you can do, however, is level the playing field a little bit by institution a hard salary cap, along with a minimum salary amount that functions as a "floor" (which would keep teams from doing what the Rays are doing). The biggest push back would be a loss of overall salary (dollars) for the players as a collective, but it can be mitigated by raising the floor (ideally, you add as much to the bottom as you take from the top).

For example, there are thirty teams in the league so you could figure out your salary cap by averaging the salaries for the top fifteen teams on the list and you could figure out your salary floor by averaging the salaries for the bottom fifteen teams on the list. Using this logic, the salary cap would have been $172 million dollars for 2018, while the salary floor would have been $107 million dollars for the same time period. 

Furthermore, you would lose approximately $157 million dollars in salary expenditures from the top teams, but you would gain $140 million dollars in salary expenditures from the bottom teams which is close to a "wash". The numbers could be adjusted as needed to get the differential closer to even, if need be. 

By implementing this sort of system, you would have much better chance at "competitive balance" since the top teams and the bottom teams would be much closer together and it would keep teams like Boston from an "unfair" advantage that excessive cash represents.

It is likely "crazy talk" on my part since greed will always win out in the end.

What do you think?

         League Average  $139,175,550

        Boston Red Sox                  $227,398,860

        San Francisco Giants         $205,665,348
        Los Angeles Dodgers        $199,582,045
        Chicago Cubs                     $194,259,933
        Washington Nationals        $181,382,609
        New York Yankees             $179,598,151
        Los Angeles Angels          $173,784,989
        St. Louis Cardinals             $163,784,311
        Houston Astros                   $163,524,216
        Seattle Mariners                 $160,993,827
        Toronto Blue Jays              $150,946,147
        New York Mets                   $150,187,987
        Colorado Rockies             $143,968,544
        Arizona Diamondbacks   $143,324,597
        Cleveland Indians            $142,804,703
        Texas Rangers                 $140,625,018
        Detroit Tigers                    $130,959,889
        Atlanta Braves                  $130,649,395
        Kansas City Royals         $129,944,821
        Baltimore Orioles             $127,633,703
        Minnesota Twins              $115,509,520
        Milwaukee Brewers         $108,982,016
        Philadelphia Phillies       $104,297,471
        San Diego Padres           $101,343,635
        Cincinnati Reds               $100,305,768
        Miami Marlins                   $91,817,860
        Pittsburgh Pirates            $91,025,861
        Oakland Athletics            $80,315,288
        Chicago White Sox         $71,839,808
        Tampa Bay Rays             $68,810,167


Tom Brennan said...

A narrower hard cap would have two effects:

1) Bring more balance

2) Reward those that cannot make savvy deals

The latter because a Boston or an LAD or a Yankees could not spend as much, thus increasing competition for free agents likely at lower prices. The Mets, as one un-savvy team based on track record, would be more likely to sign a premier dude than an aging one.

Question: is the Mets' $150MM NET of insurance, or gross? If it is gross, then net would lower the Mets from 12th to 17th. Too little to compete, especially for the un-savvy.

"Savvy" is a scarce commodity - just ask the 20 teams that missed the playoffs.

Reese Kaplan said...

That is gross (in every sense of the word). It will become grosser this year with both Wright and Cespedes on the 60 day shelf

Anonymous said...

Mike... Even if you capped the spending, it wouldn't ensure that the that the smaller markets would spend more. Much of the money from the current system goes directly into the pockets of team owners not back into the teams. What might help is getting rid of guaranteed contracts. This would lead to teams taking greater risks in signing players as they wouldn't get stuck with bad deals.

Dallas said...

I think that the main problem is that tanking is rewarded with a top draft pick. If you arent going to make the playoffs there are no incentives to win any longer other than hoping you can mitigate pissing off your fanbase. Clearly teams don't care about pissing off their fanbase (see Marlins). If there was a penalty for finishing in the bottom tier it could force more competition. Look at the Premier League in soccer, the bottom 2 teams are kicked out! That of course doesn't work but I love the general idea behind it. A dumb real world example: you play fantasy baseball that has a prize for winning. A few people dominate the top and the rest of the people largely give up early in the season. However if the bottom two losers have to pay extra (in our case buy dinner for the group) then there is incentive for everyone to be engaged for the whole season.

Mike Freire said...

Yes, the system is a bit broken and my proposal would not likely fix the issue by itself.

It is crazy that the Rays get more money from competitive balance revenue sharing/broadcast dollars then they spent on their roster! So, they are in the black before the sell one ticket!

A salary floor would make the lower level teams spend more money, which is almost as bit of a problem as what the top teams are doing.

I still think a cap/floor system would be better then the status quo.

bill metsiac said...

A few years ago, someone compiled a list like Tom's, with an added stat of Wins per dollar spent.

I'm not going to do the math on last year's list, but obviously the Giants would be near the bottom and the A's and Rays at the top.

Does that type of list still exist?

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