There was a debate yesterday between Landon Evanson of Bugs and Cranks and Brandon Warne of about every baseball site you can imagine. The news that precipitated that debate was that of Jeremy Guthrie signing a large deal with the Kansas City Royals. All right, it wasn’t really a debate, it was an offhand comment by Landon that Brandon responded to. Basically, Landon Evanson wanted a salary cap, Brandon Warne didn’t care for one. Looking at the NBA and NFL, I can see why a salary cap seems like a good idea. Practically, however, there is no way a salary cap would work in Major League baseball. I have three reasons why this is so.
1) It’s un-American. Capitalism is based on meritocracy. You need to produce a supply that there is a demand for. For example, the ability to throw strikes is a supply that is in demand. Someone like Jeremy Guthrie will make as much money as the market will support. Capping how much money something can earn based on their skill or quantity flies in the face of capitalism. The other thing about the supply vs. demand and the overall market is that teams like the Yankees or Red Sox only spend as much as they need to. It’s the lower revenue teams that set the market by how much they want to spend on the lesser players in the league. The Yankees weren’t going to sign Jeremy Guthrie. Not many other teams were going to sign Guthrie. This is on the Royals for signing him for as much as they did. They set the market.
2) We’ve tried this before. It goes with the previous point that artificially lowering the earning potential of players being un-American and anti-capitalism. The MLBPA agrees. We’ve actually been over this before.
3) Major League Baseball is more similar to the NHL than it is to the NFL or NBA: In order to instill a salary cap, one of the concessions that the Players and wealthy owners insisted upon was a salary floor so that players could continue to see income on par with what they were familiar with. In turn, this proved absolutely ruinous for lower revenue teams. It’s not a long stretch to assume that the MLBPA would ask for the same. The lower revenue teams, like the Rays and Marlins, now forced into expenditures, would fall deeper into debt. While the salary cap would seek to create a more balanced league competitively, it would truly only benefit the wealthy teams financially.
So while it may be fun to talk about a salary cap and what it could do for the league, it probably wouldn’t work out all that well for Major League Baseball.