Why Baseball Doesn't Need a Salary Cap

In the wake of the 27th World Series title for the New York Yankees, baseball fans all over are crying again that the sport needs a salary cap. How dare the Yankees spend their way to victory year after year? How dare baseball allow the poor Royals and Pirates to be little more than AAA teams for their big market competitors in New York, Los Angeles, Boston, and Chicago? Baseball, the argument goes, needs to be more like basketball and football, which have great competitive parity because of their salary caps. Except, that's not really true. There are a number of holes in the "MLB-needs-a-salary-cap" argument, and I hope to point out as many as I can here, but perhaps the most obviously absurd is the "basketball and football have a salary cap, and therefore have parity" argument.

Consider the NBA. Since 1999-2000, there have been 10 winners of the NBA Championship. The following teams have won the NBA Championship:

Los Angeles Lakers - 4 times
San Antonio Spurs - 3 times
Detroit Pistons - once
Miami Heat - once
Boston Celtics - once

The Lakers have also lost the Championship twice, meaning they have represented the Western Conference 6 times in the last 10 years, and as you probably noticed, San Antonio represented the West 3 of the other 4. Parity? I know that the Western Conference in the NBA is considered extremely strong, every year, but that does not mean there is much parity. Conference Championships may be a crude measure, but the larger point holds, I think: the salary cap does not stop the Lakers from being a force almost every year.

Lets look at the NFL, too. Since 2000, again, there have been 9 Super Bowl winners. They are:

New England Patriots - 3 times
Pittsburgh Steelers - 2 times
Indianapolis Colts - once
Baltimore Ravens - once
Tampa Bay Buccaneers - once
New York Giants - once (beat New England)

Even without the numbers, I think it's pretty easy to look back and think about the "good teams" of the last ten years in the NFL. New England has been competitive repeatedly, despite the lack of a salary cap. It is notable, of course, that there have been many good NFL teams that come from small markets (unlike in the NBA, where being a big-market team is, interestingly, almost as important as it is in baseball), but the main point here is that a salary cap does not ensure parity. Consider, in the NFL, the other side of the equation as well. More and more teams are habitually terrible, much like in baseball. The Detroit Lions, for example, have been a laughingstock for almost a decade.

Why is there not, actually, parity in these major sports? The salary cap is almost a non-entity in the equation, and in the NBA, in particular, it actually serves to help large market teams. How is that possible?

Basketball, like baseball, generates a huge portion of its revenue from ticket sales and local TV coverage. That means that, once a large market team gets rolling, it stands to make way more money than a small market team. The Minnesota Timberwolves may be successful for a year or two - and were - but it was unsustainable because there simply aren't enough T-Wolves fans out there to allow the franchise to rake in the dough from advertisers. The Lakers, on the other hand, have an enormous fan base, and their success translates not only into slightly higher ticket sales, but massively higher advertising revenues from local TV coverage.*

*Actually, in basketball, the import of TV money is even greater than in baseball. Baseball stadiums are huge by comparison, and each venue hosts 81 games in a season. Basketball has a shorter season, with fewer games, and much smaller arenas. That means more TV viewers, plus a schedule that emphasizes night and weekend games to ensure fans can watch a much higher percentage of the season than the baseball faithful can.

Why is TV revenue so important in a sport with a salary cap? Because higher revenues means higher profit, which means more money to invest into the team. Because the salary cap restricts the amount of money that can be invested directly into players, that extra money gets invested into facilities, better trainers, superior scouting departments, high-tech gizmos, and - if they happen - shady dealings. The Lakers, because they cannot spend more on their roster than the Thunder can, reap instead the huge advantage of spending more on supporting their roster. In a salary-capped league, this also means that player retention is better: who would want to leave the perks of Lakertown for Oklahoma City, especially when OKC can't pay you any more than the Lakers can, anyway?

In the NFL, this is less of an issue because revenues are more equalized (by virtue of weekly national coverage). Nevertheless, there is an important lesson in the lack of parity there, too, because it shows how important non-player personnel can be. Management - especially general managers and scouts - play a vital role in the success of a baseball team. This is also true of NFL teams, where the Head Coach has tremendous influence on the outcome of a game. Consider the Patriots: are their players so superior to those of other NFL teams, or is their success more a result of Bill Belichick? The analogy with baseball is imperfect, because baseball managers contribute very little to a team's success, but the point is that there are places other than players to spend money.

Were baseball to adopt a salary cap, there would be two major outcomes. The first is that the massive profits that baseball teams enjoy would be directed into the hands of owners, and away from players. Players are an easy target, and we often decry how awful a society must be to pay these whiny 20-somethings millions of dollars to hit a ball with a stick, but that misses the point. A salary cap doesn't change the amount of money that goes into the MLB, it just changes who sees that money at the end of the day. If players can only make so much, owners make that much more, and if there's anything worse than a society that makes millionaires of men who hit balls with sticks, its a society that would rather make billionaires of the men who hire those millionaires.

The second result of a salary cap would be a redirection of the resources of a team like the Yankees into other markets. Already the Yankees enjoy a tremendous advantage in amateur development, facilities, training staff, and foreign scouting. Imagine if they could spend only $100 million on player salaries, and could re-direct that extra $100 million they'd be saving towards their minor league teams and foreign scouting departments. Imagine the clubhouse they could build for their players. Imagine the vast competitive advantage they would enjoy in almost every other aspect of the game. It's impossible to know just how a salary cap would actually work, but if the NBA is any indication, a salary cap would not keep the Yankees from enjoying the same kind of dynastic power that they already do, and that the Lakers enjoy in the NBA.

Of course, the Yankees already are a perennial power - along with their huge-market cohorts, the Boston Red Sox, the Los Angeles Dodgers, and the Los Angeles Angels (of Anaheim, I'm told) - which is what has everybody so up in arms. The illusion of parity in baseball is really just the parity of the playoffs. A seven game series is too short to determine the superior team in baseball, where a superior team may win 55% of the time (compared to, say, in the NBA, where the superior team wins 70% of the time). The Yankees and Phillies could have played their recent World Series 100 times, and the Yankees may have won 60 of them. Now add in two more rounds of the playoffs, including a 5 game long series at the start (which increases the odds for an inferior team). It's no wonder the Yankees hadn't won the World Series since 2000. But remember that they made the playoffs every year in between but one.

This, it seems, is the problem that gets everyone so worked up, the problem that a salary cap would, in theory, fix. But whether parity is even desirable or not is an important question that many sports fans forget to ask. While a competitive game is certainly fun, how much would College Football fans enjoy the sport if UNLV and Mississippi State had as good a chance to win the National Championship every year as USC, Florida, or Ohio State? I would argue that - because of graduation - College Football has more parity than almost any other major sport in this country, and yet it is the lack of parity sport wide (or the parity, you might say, at the fairly large upper tier) that makes the sport so engaging. That and the allegiance every alumnus has to his respective alma mater. But TCU graduates still like watching the National Championship, even if they never expect to get there.

Of course, we expect better of baseball, where every team is supposed to "have a chance." This isn't top-heavy European soccer, after all, where the top leagues are dominated by a small handful of elite teams, and the rest fight to avoid relegation. Baseball is about hope and justice and the American way, and stuff, right? Except it's not, really. Baseball is largely about money - at least on the National scale - and it is good money for the league if the Yankees are competitive each and every year. So let them be! Baseball, for the true fan, isn't about World Series victories anyway. It's about summer afternoons at the stadium, rooting for the home team whether they are 60-30 or 30-60, up by four runs or down by eight. It's about a hot dog and a beer in the bleachers, a heckler insulting himself more than the opposition, the drama of the pitcher and the batter, and the wonderful statistics all of that produces. It's about arguing with the guy in the row behind you who you've never met whether Seth Smith is better than Brad Hawpe (he is), and whether the Rockies are a better pitching team than hitting (they are), and whether Clint Barmes sucks, despite all his home runs (he does).

Baseball is too long a haul, each season, to be about championships. The Yankees fans for whom a season without a World Series is a failure are missing out on something. There can be tremendous joy in watching your team exit in the first round of the playoffs, simply because it was a good season. There can be tremendous joy in finishing last, too (just look at the '93 Rockies). I don't mean to deny that there is frustration in losing, and I wouldn't suggest that you want your team to be a failure, but real baseball fans show up in Cincinnati and Pittsburgh and Kansas City every year even though they know their teams aren't any good. Why? Because they want to watch baseball, pure and simple. Wins and losses be damned. Baseball is the closest sport to poety there is, and poetry is as much about losers as it is winners anyway, if not more so.*

*Consider this Tennyson poem, for example. Or anything Greek.

If there is something wrong with baseball - with the Yankees and the Red Sox - then a salary cap is a terrible solution. I don't know what the 'solution,' is, but I do know that it has to address, not the output of the Yankees, but the intake. Creative, intelligent people will always know how to use their superior resources - should they have them - to their advantage, and no amount of restricting that resource usage will stop the Yankees. Eliminating the resource advantage? Sure, but how are you going to do that? And do you want to anyway? On some level, I was glad the Yankees won the World Series this year; there's something right about it. Let them win five more in the next decade, let them be champions, and be desperate and incredulous when they aren't. Just let me watch baseball, and I'll be happy.