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Sports Daily: Yanks land Tanaka, Revisiting the Idea of a Salary Cap

01:37 PM - January 23, 2014 by RaychelSnr

Major League Baseball's new posting system rules were supposed to even the playing field for access to Japanese baseball talent. By placing a limitation on the maximum price for access to negotiate with these stars and their Japanese clubs, the Houston's and Miami's of the world could have equal footing with baseball's deep-pocket organizations.

Equal access, however, does little to buffer the real clout of contract negotiations -- who can afford the biggest contract? The New York Yankees proved that to still be true as they locked down Japanese star Masahiro Tanaka with a seven-year $155 million deal (which will essentially pay him half of what the entire Houston Astros starting nine will make in 2014).

Money spent, however, doesn't always guarantee wins and a salary cap wouldn't promise that clubs like the Astros could even afford to hit the maximum amount each year -- it would only limit the star power of the organizations that can. The MLB proved they're willing to adopt change by expanding replay for this year. Perhaps it's time for baseball to complete the modern progression by joining their basketball and football brethren with a salary cap structure to promote league balance.

Sound Off: Is it time for the MLB to adopt a salary cap like other major American professional sports?

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Member Comments

# 21 Majingir @ 01/23/14 11:39 PM

It doesn't really need a hard cap, but at least have a bigger penalty for exceeding the luxury tax. The current penalty is too light. It's just a percentage that you're over by. I believe NBA is $1+ penalty for every dollar you're over. MLB should be same thing. Every dollar you're over the luxury tax, you pay something like $1.10(so a team 10M over would pay 11M in tax. Instead of the current penalty where 10M over would only be anywhere from 1.5M-5M in tax)

# 22 pietasterp @ 01/24/14 10:51 AM

Quote:

Originally Posted by DrJones


	Who are you referring to here? Tino and Knoblauch? I hate the Yankees as much as anyone else, but their 1996-2000 titles weren't "bought" IMO. Most of the Yankees FA acquisitions have been older players whose gigantic contracts have bitten the Yanks in the ***.

Maybe I'm misunderstanding your larger point, but while I agree the early part of the dynasty years (i.e. '96-2000) were not necessarily acquired, the next 10 years of their history were largely characterized by picking off a lot of high profile talent from other teams at or near the peaks of their careers (and inflating the FA market in the process); Giambi, Clemens, A-Rod, Curtis Granderson, Teixeira, Sabathia....

Now they didn't all lead directly to titles, but it did lead to consistent post-season appearances. And if you subscribe to the theory that once you get in the post-season, the small sample sizes allow for chance to play a greater role (i.e. making it to the post season is skill, winning it all requires luck as well), the real measure of the result of big spending is post-season appearances, which the Yankees did pretty much every year of the 2000's.

I'm not saying baseball does or doesn't "need" a cap - I frankly don't care one way or the other. But if I were the czar of baseball or something, and I cared about cultivating as many of the fanbases as possible (which theoretically leads to a healthier overall interest in the game), I would strongly consider it. The issue is of course no one really cares or has that as their primary goal (at least, no one involved in baseball does). Since the goal is to maximize the value of the franchises, much like a CEO's job is to maximize shareholder value, the current system seems to be working just fine. If baseball teams were publicly traded entities and I had an equity stake in one or more franchises (or an MLB Index!), I would certainly be pleased with the last several decades. Although I would be shorting the living sh*t out of Tampa...

# 23 DrJones @ 01/24/14 02:40 PM

Quote:

Originally Posted by pietasterp


	Maybe I'm misunderstanding your larger point, but while I agree the early part of the dynasty years (i.e. '96-2000) were not necessarily acquired, the next 10 years of their history were largely characterized by picking off a lot of high profile talent from other teams at or near the peaks of their careers (and inflating the FA market in the process); Giambi, Clemens, A-Rod, Curtis Granderson, Teixeira, Sabathia.... Now they didn't all lead directly to titles, but it did lead to consistent post-season appearances. And if you subscribe to the theory that once you get in the post-season, the small sample sizes allow for chance to play a greater role (i.e. making it to the post season is skill, winning it all requires luck as well), the real measure of the result of big spending is post-season appearances, which the Yankees did pretty much every year of the 2000's.

To me, Giambi is the only one of those that fits the profile you first suggested (small or mid market team develops young star, only to lose him to Yankee megabucks). Clemens was 36. The Rangers stupidly overbid for A-Rod in the first place and received Soriano in the deal. The Tigers received decent value for Granderson in Austin Jackson. Texas received tremendous value for Teixeira (the Yankees signed him off the Angels, who aren't exactly poor). The Indians haven't received much so far for Sabathia (Brantley?), but the Brewers got a playoff appearance out of him.

Personally, I don't mind the Yankees appearing in the playoffs most of the time (unless they consistently win titles) for the same reason I don't mind seeing the Patriots around. Every sport needs a villain, and nothing's more satisfying than watching the Yanks or Pats get booted from the postseason.

# 24 NYJets @ 01/24/14 03:23 PM

Also, I don't think it's fair to go back to the early 2000s to make examples of why things need to change, as things already have changed. Rules have changed regarding revenue sharing and luxury tax, among other things. Teams are doing a much better job of locking up their young talent, and more teams are spending money.

2005

1.	New York Yankees	$205,938,439
2.	Boston Red Sox	$121,311,945
3.	New York Mets	$104,770,139
4.	Philadelphia Phillies	$95,337,908
5.	Los Angeles Angels	$95,017,822
6.	St. Louis Cardinals	$93,319,842
7.	San Francisco Giants	$89,487,842
8.	Chicago Cubs	$87,210,933
9.	Seattle Mariners	$85,883,333
10.	Atlanta Braves	$85,148,582
11.	Los Angeles Dodgers	$81,029,500
12.	Houston Astros	$76,779,022
13.	Chicago White Sox	$75,228,000
14.	Baltimore Orioles	$74,570,539
15.	Detroit Tigers	$68,998,183
16.	Arizona Diamondbacks	$63,015,834
17.	San Diego Padres	$62,888,192
18.	Florida Marlins	$60,375,961
19.	Cincinnati Reds	$59,658,275
20.	Minnesota Twins	$56,615,000
21.	Oakland Athletics	$55,869,262
22.	Texas Rangers	$55,307,258
23.	Washington Nationals	$48,581,500
24.	Colorado Rockies	$47,789,000
25.	Toronto Blue Jays	$45,336,500
26.	Cleveland Indians	$41,830,400
27.	Milwaukee Brewers	$40,234,833
28.	Pittsburgh Pirates	$38,138,000
29.	Kansas City Royals	$36,881,000
30.	Tampa Bay Devil Rays	$29,893,567

2013

1.	New York Yankees	$228,835,490	$7,151,109
2.	Los Angeles Dodgers	$216,597,577	$7,468,882
3.	Philadelphia Phillies	$165,385,714	$6,125,397
4.	Boston Red Sox	$150,655,500	$5,021,850
5.	Detroit Tigers	$148,414,500	$5,708,250
6.	San Francisco Giants	$140,264,334	$5,009,441
7.	Los Angeles Angels	$127,896,250	$4,736,898
8.	Chicago White Sox	$119,073,277	$4,410,121
9.	Toronto Blue Jays	$117,527,800	$3,791,219
10.	St. Louis Cardinals	$115,222,086	$3,973,175
11.	Texas Rangers	$114,090,100	$4,074,646
12.	Washington Nationals	$114,056,769	$4,386,799
13.	Cincinnati Reds	$107,491,305	$4,134,281
14.	Chicago Cubs	$104,304,676	$3,596,713
15.	Baltimore Orioles	$90,993,333	$3,137,701
16.	Atlanta Braves	$89,778,192	$3,095,800
17.	Arizona Diamondbacks	$89,100,500	$2,970,017
18.	Milwaukee Brewers	$82,976,944	$2,765,898
19.	Kansas City Royals	$81,491,725	$3,018,212
20.	Pittsburgh Pirates	$79,555,000	$2,651,833
21.	Cleveland Indians	$77,772,800	$2,592,427
22.	Minnesota Twins	$75,802,500	$2,707,232
23.	New York Mets	$73,396,649	$2,530,919
24.	Seattle Mariners	$72,031,143	$2,770,429
25.	Colorado Rockies	$71,924,071	$2,766,310
26.	San Diego Padres	$67,143,600	$2,165,923
27.	Oakland Athletics	$60,664,500	$2,091,879
28.	Tampa Bay Rays	$57,895,272	$2,144,269
29.	Miami Marlins	$36,341,900	$1,135,684
30.	Houston Astros	$22,062,600	$817,133

# 25 DrJones @ 01/24/14 04:55 PM

Quote:

Originally Posted by NYJets


	Houston Astros $22,062,600

10char

# 26 Picci @ 01/24/14 06:36 PM

I don't want a salary cap, nor do I believe its needed in the game. For one, it at least gives the young athlete the perspective that baseball can give him the freedom to pursue greater riches than any other sport if he's gifted. This is one way of "showering" the athlete to play baseball instead of the other sports.

However, I do have a problem with how the Yankees can conduct business that other clubs are not able to compete against. In 2013, the Yankees have already stated that they will go "above and beyond", when it comes to international spending. They already have a leg up with Japan's Yomiuri Giants (hence the Hideki Matsui signing with no competition) and now have readied themselves to pillage South America. There, lies the problem.

# 27 feztonio @ 01/26/14 09:48 AM

Quote:

Originally Posted by DrJones


	Seattle can't afford it? Last I checked, Nintendo was worth $85 billion US.

for 2014 the yankees are barely touching $200 million - they were under 189m prior to tanaka. between 65% and 70% of revenue is shared equally between the 30 clubs; therefore if NY can pay 200, then every other team can afford a minimum of $130m.

the problem isn't the evil Yankees as most teams love to blame.. it's the greed of your owners who put 22m on the field in the case of Houston, then keep the other 118m in their tight-wad ownership pockets.

that revenue sharing isn't the only money a team gets however.. on top of that 118m from revenue sharing, the owners get to pocket the profits from ticket sales, food, parking, foam fingers, jerseys, caps, video game licensing, and all the other little gotchyas and fees associated with selling seats to 82 home games a season. for example if each ticket costs $20 dollars, and the stadium seats 20,000 fans (very low end values for this example but it makes the math easier - then each game a team earns $400,000 dollars; for 82 regular season games that's earnings of $32,800,000 dollars which is $10m more than Houston is putting into their MLB roster.

but wait the money isn't done yet. each team gets their regional and local television and network revenues, advertising revenues and possibly local radio deals which all bring in tens-of-millions of dollars a season or more depending on market size and team popularity.

with all this money each team is making every year.. who is the problem? the Yankees who spend the money on their roster, or the 24 or 25 teams who's owners keep all that money for themselves and put a AA-AAA roster on the field??

# 28 feztonio @ 01/26/14 09:51 AM

in 2014 the yankees are barely touching $200 million - they were under 189m prior to tanaka. the larger issue is the what each owner does with the hundreds of millions of dollars per season that comes into his greedy fingers...

first, between 65% and 70% of revenue is shared equally between the 30 clubs; therefore if NY can pay 200, then every other team can afford a minimum of $130m.

the problem isn't the evil Yankees as most teams love to blame.. it's the greed of your owners who put 22m on the field in the case of Houston, then keep the other 118m in their tight-wad ownership pockets.

it's also a laugh when Miami, Denver, Baltimore/DC metroplex, SanFransico/Oakland metroplex, Dallas/Ft Worth metro, Minneapolis/St Paul metro... plead poverty and small market status. these are some of the largest and most affluent cities and regions not only in the United States but in the entire world and history of human existence. that these owners get away with bold-faced lying about market size and no one in the media calls them on it is disgusting

that revenue sharing isn't the only money a team gets however.. on top of that 118m from revenue sharing, the owners get to pocket the profits from ticket sales, food, parking, foam fingers, jerseys, caps, video game licensing, and all the other little gotchyas and fees associated with selling seats to 82 home games a season. for example if each ticket costs $20 dollars, and the stadium seats 20,000 fans (very low end values for this example but it makes the math easier - then each game a team earns $400,000 dollars; for 82 regular season games that's earnings of $32,800,000 dollars which is $10m more than Houston is putting into their MLB roster.

but wait the money isn't done yet. each team gets their regional and local television and network revenues, advertising revenues and possibly local radio deals which all bring in tens-of-millions of dollars a season or more depending on market size and team popularity.

with all this money each team is making every year.. who is the problem? the Yankees who spend the money on their roster, or the 24 or 25 teams who's owners keep all that money for themselves and put a AA-AAA roster on the field??

# 29 dickey1331 @ 01/26/14 12:26 PM

Like others have said I don't think baseball needs a salary cap. Its not the Yankees fault that Houston won't spend any money.

# 30 24 @ 01/26/14 12:41 PM

The best thing about Baseball is the fact there is no salary cap. The owners choose what they want to do with their money. George (And Now Hal) always wanted the Yanks to be in contention for a world series. Because of that he Spent a huge amount of money on free agents.

It's not like the Yankees are a monopoly. They don't sign every single free agent. They had a big offseason this year because they have no MLB ready prospects that could fill the massive holes in the team. They Needed a top tier starting pitcher. They needed another outfielder to replace Granderson. They needed a Catcher They couldn't address those problems within the organization so they got some new players.

And it's not like other teams can't do the same. Seattle is owned by the Nintendo Guy which makes a ton of money every year. The Giants owner has a net worth of about 6 Billion.

# 31 pietasterp @ 01/27/14 11:37 AM

Quote:

Originally Posted by DrJones


	To me, Giambi is the only one of those that fits the profile you first suggested (small or mid market team develops young star, only to lose him to Yankee megabucks). Clemens was 36. The Rangers stupidly overbid for A-Rod in the first place and received Soriano in the deal. The Tigers received decent value for Granderson in Austin Jackson. Texas received tremendous value for Teixeira (the Yankees signed him off the Angels, who aren't exactly poor). The Indians haven't received much so far for Sabathia (Brantley?), but the Brewers got a playoff appearance out of him. Personally, I don't mind the Yankees appearing in the playoffs most of the time (unless they consistently win titles) for the same reason I don't mind seeing the Patriots around. Every sport needs a villain, and nothing's more satisfying than watching the Yanks or Pats get booted from the postseason.

Fair enough. Although I don't think it occurred to me to factor in whether a team got value back or not after losing a star player; that may be more or less relevant depending on the circumstances. I wouldn't argue that the Tigers definitely came out on top, after all was said and done, from the Yanks/Tigers/D'backs trade that netted us Jackson and Scherzer. I do take exception w/ the Yanks and Patriots being around to have a villain every year though....if neither of those teams made the playoffs for the next 50 years, I'd be just fine with that.

Quote:

Originally Posted by dickey1331


	Like others have said I don't think baseball needs a salary cap. Its not the Yankees fault that Houston won't spend any money.

Quote:

Originally Posted by 24


	The best thing about Baseball is the fact there is no salary cap. The owners choose what they want to do with their money. George (And Now Hal) always wanted the Yanks to be in contention for a world series. Because of that he Spent a huge amount of money on free agents.

I agree that baseball - in fact, NO sport - "needs" a salary cap. It's an artificial restriction placed on teams by the teams themselves for what some view as the health of the game overall. As I mentioned prior, it's pretty much the purest expression of capitalism in sports to have an uncapped market, so in that sense it's a virtue. Of course nothing is stopping an owner from spending his own money out of his pocket to sign guys, but that's a bit artificial since it's not like the Steinbrenners are paying the likes of A-Rod out of their own personal bank accounts. The Yankees have a current valuation of $2.3 Billion, with annual revenues of $471 million, whereas a team like the Kansas City Royals have a valuation of $457 million, with annual revenues of about $160 million. Signing a guy like A-Rod for $30-mil a year + incentives isn't really a viable option for a team like KC. I'm not saying that's good or bad - I'm putting no value judgement on that statement whatsoever, vis-a-vis the virtues of a hard cap - but it's relevant only in the sense that the argument of "anyone can sign anyone they want" is not totally true, in a practical sense.

Look, the bottom line is that most baseball fans seem relatively happy with the way things are now and the franchise valuations keep going up, so everbody wins and nothing needs to be changed. I think there are valid arguments for a hard salary cap, but in the end, no one can reasonably argue that baseball "needs" one, in the sense that no sport "needs" one.

# 32 DrJones @ 01/27/14 11:16 PM

Quote:

Originally Posted by pietasterp


	I do take exception w/ the Yanks and Patriots being around to have a villain every year though....if neither of those teams made the playoffs for the next 50 years, I'd be just fine with that.

That would also be acceptable.

Quote:

Originally Posted by pietasterp


	I think there are valid arguments for a hard salary cap, but in the end, no one can reasonably argue that baseball "needs" one, in the sense that no sport "needs" one.

I'd argue that baseball needs one less than football, basketball, or hockey.

If you can accumulate superior talent than your opposition in football or (especially) basketball, you're going to win almost all the time. In hockey, the disparity in payrolls and talent played a major role (IMO) in the ascendancy of boring hockey during the Dead Puck Era. It was certainly possible for less skilled, low payroll teams to prosper, but only through trapping and superior goaltending.

Baseball's many variables result in the best teams winning only 60% of the time and allow smart but poor teams to compete while still putting an entertaining product on the field. It wouldn't exactly hurt my feelings if MLB adopted a salary cap, but I think it's unnecessary at this time.

# 33 pietasterp @ 01/28/14 11:30 AM

Quote:

Originally Posted by DrJones


	I'd argue that baseball needs one less than football, basketball, or hockey. If you can accumulate superior talent than your opposition in football or (especially) basketball, you're going to win almost all the time. In hockey, the disparity in payrolls and talent played a major role (IMO) in the ascendancy of boring hockey during the Dead Puck Era. It was certainly possible for less skilled, low payroll teams to prosper, but only through trapping and superior goaltending. Baseball's many variables result in the best teams winning only 60% of the time and allow smart but poor teams to compete while still putting an entertaining product on the field. It wouldn't exactly hurt my feelings if MLB adopted a salary cap, but I think it's unnecessary at this time.

I can't argue with anything you said there. All reasonable points. Discussion/internet conceded...

P.S. Edit: Just out of curiosity, how is the 60% figure derived? And what percentage of the time does the "best" (however you want to define that) team win in other sports, for comparison? I would still argue playoff appearances, not titles, are the relevant metric, but nevertheless I'd be interested in how baseball compares. I guess I could also look it up myself....

# 34 DrJones @ 01/28/14 03:17 PM

Quote:

Originally Posted by pietasterp


	I can't argue with anything you said there. All reasonable points. Discussion/internet conceded... P.S. Edit: Just out of curiosity, how is the 60% figure derived? And what percentage of the time does the "best" (however you want to define that) team win in other sports, for comparison? I would still argue playoff appearances, not titles, are the relevant metric, but nevertheless I'd be interested in how baseball compares. I guess I could also look it up myself....

In a typical season, MLB's best team will win about 100 games. 100/162 = 61.7%.

There was a thread a year or so ago (can't remember where) that I came up with how often the best regular season teams in all sports won championships (I was arguing with Money99 about something). I'm not going to dig that up, but I can tell you that since MLB's wild card era began in 1995, only 4 teams who finished with the best record in the Majors went on to win the World Series.

# 35 pietasterp @ 01/28/14 03:35 PM

Quote:

Originally Posted by DrJones


	In a typical season, MLB's best team will win about 100 games. 100/162 = 61.7%. There was a thread a year or so ago (can't remember where) that I came up with how often the best regular season teams in all sports won championships (I was arguing with Money99 about something). I'm not going to dig that up, but I can tell you that since MLB's wild card era began in 1995, only 4 teams who finished with the best record in the Majors went on to win the World Series.

Got it. Fair enough; I vaguely remember that thread I think, and anyway I'll take your word for it.

I still contend that post-season appearances, and not titles, is the better way to measure "success" (in relationship to whether money can buy "success"). Of course there are many ways to measure that, but my suspicion is that there's a direct line between payroll and the post-season in baseball, which is sort of at the crux of this discussion, as post-season appearances are akin to more "shots on goal" so to speak.

Last comment - I think the team with the best regular season record is an interesting way to designate a "best" team, since it's dependent on conference assignment, among other things (not to mention the winning percentage is heavily influenced by the fact that so many games are played in an MLB season), although there may or may not be a correlation there between best regular season record and payroll. I suspect there is.

# 36 feztonio @ 07/05/15 10:23 AM

as a Mets fan (I'm assuming due to your Mets logo in your screen name) does the Yankees way make you more mad, or does the fact that your favorite team is also in New York and conceivably could be spending and earning in the same neighborhood as the Yankees, but the Wilpons insist on carrying themselves and the teams finances as if they were located in Austin TX or Gary IN or some other small / minor league market?

# 37 Chip Douglass @ 07/06/15 05:56 PM

On the other end of the competitive balance spectrum, the Florida/Miami Marlins have been an ATM machine for their entire existence and have won 2 championships.

Baseball has plenty of parity.

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