A salary cap requires rough economic equality, and that equality does not exist in baseball. When the gap between rich and poor is too great, you cannot eliminate the gap by setting spending limits and spending floors. You might just as well address the gap between rich people and poor people in the U.S. by passing a law requiring everyone to live in the same size house.
As I said earlier: baseball needs a salary cap, and it is a shame that baseball cannot afford one. Without a cap, the Yankees will continue to spend more than any other team can afford to spend. The Yankees are run by smart people who have no interest in wasting the Steinbrenners’ money. The Yankees spend more than everyone else for a reason: it gives the team a competitive edge. We can (and will) argue about the size and nature of this edge, but the edge exists, and it is important. When the Yankees win, the win is due in part to the Yankees’ economic dominance. When the Yankees lose, the loss is in spite of the Yankees’ economic dominance. Baseball’s economic imbalance is fundamental to the game at the moment; it is a patina that colors everything that happens on the field, particularly if one of the teams on the field happens to be the Yankees.
It’s wrong to focus this entire discussion on the Yankees. The problem we’re discussing is a baseball problem, not a Yankees problem. There are other rich teams in baseball. There’s economic inequality at work when the Phillies defeat the Rockies for a National League Championship. But the Yankees serve as a convenient lightning rod for all discussions on money in baseball. We know this is true. That’s why this blog is the only blog on Rob Neyer’s Sweet Spot list with the word “money” in its name.
Baseball needs an effective salary cap, but cannot afford one. Is there a workable alternative available? Some analysts recommend that instead of a salary cap, baseball’s luxury tax penalty be increased to make it “financially painful” for teams like the Yankees to exceed the luxury tax threshold. I don’t understand this argument, particularly when it comes from experts like Maury Brown who acknowledge that the luxury tax is a type of salary cap. The issue is not whether a luxury tax is “financially painful” – no one likes paying taxes, and all taxes are painful. The question is whether baseball should adopt a luxury tax that is financially prohibitive. If the tax is not prohibitive, then the Yankees will continue to pay the tax (painful as it may be).
But if the luxury tax rate is increased to the point that even the Yankees cannot afford it, then the luxury tax is effectively a hard salary cap. A hard salary cap might be enforced by means of a prohibitive tax or an outright spending ban, but the results in either case would be the same. The cap would have to be accompanied by a hard salary floor. It would not get the support of the player’s union. It would require minimum payroll guarantees. It would be no more viable than the solution I painstakingly built in Parts 1-3 of this series, and abandoned here in Part 4.
Baseball needs an effective salary cap. I may never tire of saying so. Others can and will disagree with me. But it’s premature to debate the question. Baseball’s current economic structure does not support an effective salary cap. Unless this structure is changed, it’s pointless to discuss a cap. Until this structure is changed, we cannot even determine what kind of salary cap we’re arguing for, or against.
You may think like I do that baseball needs an effective salary cap, but we cannot use a salary cap to narrow the gap between rich and poor baseball teams. No. Instead, a salary cap is possible only after we have narrowed the gap between rich and poor teams. How do we narrow this gap? A better system of revenue sharing might do the trick.
It’s not time yet for “Thinking Cap.” It’s time for “Thinking Revenue Sharing”. Coming soon to a blog near you!