Editor’s Column – Does MLB Need a Salary Cap

As spring training begins, the New York Yankees hope fans will put aside the A-Rod steroids controversy and focus on their new offseason acquisitions: CC Sabathia, AJ Burnett, and Mark Teixiera. While the Yankees are thrilled with their 423 million dollar free agent spending spree in a recession, many owners are less thrilled and, recently, grumblings of competitive imbalance have revived the debate about creating an MLB salary cap .

Brewers’ owner Mark Attanasio expressed his concerns with the Yankees’ spending, saying “At the rate the Yankees are going, I’m not sure anyone can compete with them.” While a salary cap system was not discussed at the January owners’ meetings, it appears it will become an issue when the current collective bargaining agreement expires in 2011. “I think there’s a lot of owners who would like to have a salary cap right now,” A’s owner Leo Wolff said. “Parity is what we’re looking for, and the more ways you can get to parity the better.” If parity is what owners want, they should look somewhere else because the adoption of a salary cap system in baseball would hinder parity, not create it.

To effectively address this issue, you have to ask if parity is a legitimate problem in the current system. Critics argue that the answer is obvious: when one team can spend $423 million on three players and other teams spend less than 30 million dollars on their entire team. However, a close look shows that MLB’s current system creates more parity than the salary cap systems in the NFL and NBA. In baseball, there have been nine different championship teams in the last 10 years. In football, there have been seven. In basketball, the salary cap has not created parity, with only five different championship teams in the last decade.

If we look at a larger sample size, the results are even more dramatic. Over the past 30 years, while 20 major league teams won a World Series; only nine teams can call themselves champions in the NBA. The San Antonio Spurs have won three of the last six NBA titles and, before them, the Los Angeles Lakers won three trophies in a row. Before them, the Chicago Bulls won six of eight championships. Three of the greatest dynasties in sports history played in a 16-year period in a league with a salary cap.

If you look at parity among teams making the playoffs, the statistics are even more compelling. The NFL has 12 teams advance to the playoffs and the NBA has 16; the MLB only has eight teams that play in October. The larger playoff field of football and basketball creates the illusion of parity, but is it “real” parity when an 8-8 NFL team with no real shot at the Super Bowl (the San Diego Chargers) can make the playoffs?

MLB has a system in which small market teams can succeed and have succeeded at every level. Last October, the Tampa Bay Rays reached the World Series for the first time, despite having a $51 million payroll, the third lowest payroll in the league and roughly $171 million less than the Yankees. The year before, the low-budget Colorado Rockies won the NL pennant. The perennially low-payroll Florida Marlins have won the Fall Classic more recently than the Yankees.

Billy Beane, general manger of the small-market Oakland A’s, said “superior management could still run circles around taller piles of cash.” Teams fail because of their own stupidity and ill-advised transactions, not because they don’t have the money. What the Rays pulled off was no miracle. It reflected careful investment in player development, key veteran pickups, and, overall, superior management putting together a superior team. It’s no surprise that the horrendously run Pittsburgh Pirates have been the loudest proponents of a salary cap system. It would take a lot more than a salary cap to fix the Pirates. They have failed to make the playoffs in 16 years because of countless poor managerial decisions.

Critics also argue that big-market teams should not have a significant advantage over teams based in small markets. The Yankees’ 8-year championship drought proves that money cannot buy championships. But it can buy being consistently competitive. Is there anything wrong when teams with larger markets and larger fan bases consistently have a chance to win? No one can argue that crowning San Antonio champions while the New York Knicks are stuck in mediocrity is good for the NBA (or at least the business of basketball).

Brewers owner Attanasio said “I would ask, if it’s such a bad idea, what sport doesn’t have a salary cap other than us?” The question Attansio should be asking is whether we want to be stuck with a system like in the NBA? Aside from salary caps being contrary to every basic aspect of a free market, the NBA salary cap system collapses under its own complexity. For one thing, no fan, player, or writer fully understands the intricacies of the system. Teams trade for expiring contracts as often as they trade for help. For years, every NBA team has been working towards 2010, when LeBron James, Chris Bosh, Steve Nash, and Dwyane Wade become free agents. This is because 2010 is the first time in a long time that premier players will be available because the salary cap system locks players like Tim Duncan and Kobe Bryant into one team. When teams want to improve and can’t, the system is flawed even if it looks “fair.”

Right now, baseball is a healthy sport with record attendance and record income. So why fix something when it’s not broken?