Baseball Salary Cap?

[RedRamage]

Browsing MLB Trade Rumors and they have a story/poll on a Salary Cap in baseball.

Now, I'll readily admit that being a fan of a mid(ish)-market team obviously is influencing my opinion here, but I'm ready for a cap. Seeing the Dodgers just spend and spend and spend and spend and pick up all the big names is frustrating. It doesn't feel like mid and small teams can compete when they don't have the budget to bid along side the major players.

Now, on one had I do think Chris Ilitch could spend more on the Tigers payroll and still make money, but I don't think the Tigers could get anywhere close to $370M and be profitable. 

I'm not opposed to looking at other options beside a hard cap, but I think it needs to have some more teeth if MLB is going to stick with a Luxury Tax model. I think the tax needs to be higher and perhaps based on a percentage of local media revenue from the "offending" club.

[monkeytargets39]

If you have a cap, then they should also have a floor.

 

The thing that has been jumping out at me is the absolute massive advantage the west coast teams have in being able to appeal to the Japanese players—and there are a handful of teams that are basically in line to acquire plus MLB ready talent without having to invest time in developing them.  
 

Clearly I understand why they’d want to go there so I don’t fault them—but mlb maybe needs to take a look at setting up something that levels the playing field in that regard.

In the NBA you have to draft the player in the foreign league in order to get them as opposed to them just signing wherever they please.  Perhaps something like that could work for MLB.  You can use your draft pick on a player in a foreign pro-league and you then have their exclusive rights for maybe like 3 years.  You’d have to pay them X amount times the typical slot price for it—then if that player wants to come to the MLB they can only do it with that team and have to be in that teams organization for their first X amount of years in the league.  If they decide to stay abroad for those 3 years, then they can be drafted again by another team in the next draft.  

Edited January 20 by monkeytargets39

[Motor City Sonics]

There will never be a salary cap in baseball.   The players union will shut the sport down forever before ever caving on that.    They had no shame in getting a World Series cancelled, in fact they were proud of it.    

[Edman85]

9 minutes ago, Motor City Sonics said:

There will never be a salary cap in baseball.   The players union will shut the sport down forever before ever caving on that.    They had no shame in getting a World Series cancelled, in fact they were proud of it.    

Is that true? My understanding is the owners couldn't get their **** together.

[RedRamage]

2 hours ago, monkeytargets39 said:

If you have a cap, then they should also have a floor.

The thing that has been jumping out at me is the absolute massive advantage the west coast teams have in being able to appeal to the Japanese players—and there are a handful of teams that are basically in line to acquire plus MLB ready talent without having to invest time in developing them.  

Clearly I understand why they’d want to go there so I don’t fault them—but mlb maybe needs to take a look at setting up something that levels the playing field in that regard.

I think that a Salary Cap would limit the west coast advantage. Suzuki is a bit of an wild card here because he was considered part of the amateur pool. If players like him show up more often then they might need to tweak the rules there. But if he was "regular" free agent and the Dodgers didn't have infinite money to throw given that they already spent so much of the hypothetical pool last year, then I think it would have been less certain that Suzuki would have gone west coast.

[RedRamage]

2 hours ago, Edman85 said:

Is that true? My understanding is the owners couldn't get their **** together.

I should have linked the MLB Trade Rumor's story in my first post, but here it is now: https://www.mlbtraderumors.com/2025/01/poll-would-you-trade-the-2027-mlb-season-for-a-salary-cap.html

They didn't say anything about the players being proud, but they did mention this:
 

Quote

MLB owners have wanted a salary cap for a long time.  You may recall that was the reason for the 1994 strike, which cost us the World Series that year.  The players did not give in to that demand, though they did allow for the first luxury tax in subsequent years.

 

[HeyAbbott]

On 1/20/2025 at 5:04 PM, RedRamage said:

I should have linked the MLB Trade Rumor's story in my first post, but here it is now: https://www.mlbtraderumors.com/2025/01/poll-would-you-trade-the-2027-mlb-season-for-a-salary-cap.html

They didn't say anything about the players being proud, but they did mention this:
 

 

All of this talk about a salary cap is absurd. Most of the MLB owners are perfectly content to be impersonate the Washington Generals while a handful of teams get to be the Harlem Globetrotters.

[chasfh]

The Washington Generals made money.

[RedRamage]

Just watched this video by Trevor May: 

 

The TL;DW (Too Long; Didn't Watch) version: Free Agency seems to have issues. The problem, from a players perspective: Teams have control for a LONG time... players are taught that Free Agency, which may not come until way late in a player's career, is the one time to get that big contract so they need to maximize that one deal. They may never get another shot. Because of this players are unlikely to resign before free agency and other things (like team, city, family, friends, etc) become less important than the big payday.

May suggestion one possible solution (while admitting it's just an idea, it may not work): Reduce the time it takes to get to free agency. If players see that they have a shot at two (or more) big deals, there may be less driving force to maximize that Free Agency contract. They may be more willing to re-sign with a team even before free agency.

Obviously this would make owners unhappy, so the combined with this May suggests limiting Free Agency contract to a maximum of 5 years. This would mean that even if you were paying a player $25M a year, the full contract value would only be $125M. This would slow down the huge ballooning contracts of many hundreds of millions without limiting AAV per year and, presumable, not price smaller market teams out as much.

Summary over.

Not being someone who's hugely well versed in baseball front office stuff, I'm curious what people think of this. Personally the limiting Free Agency contracts to just 5 years doesn't seem like a big enough benefit to the owners to make them willing to shorten team control. I also question how much that will help small market teams. I fear that it would just make the bigger markets willing to pay crazy AAV knowing that their only taking on 5 years liability so if the contract ends up being a dud they're not chained to it for 8, 10, or more years.

 

[KL2]

1 hour ago, RedRamage said:

Just watched this video by Trevor May: 

 

The TL;DW (Too Long; Didn't Watch) version: Free Agency seems to have issues. The problem, from a players perspective: Teams have control for a LONG time... players are taught that Free Agency, which may not come until way late in a player's career, is the one time to get that big contract so they need to maximize that one deal. They may never get another shot. Because of this players are unlikely to resign before free agency and other things (like team, city, family, friends, etc) become less important than the big payday.

May suggestion one possible solution (while admitting it's just an idea, it may not work): Reduce the time it takes to get to free agency. If players see that they have a shot at two (or more) big deals, there may be less driving force to maximize that Free Agency contract. They may be more willing to re-sign with a team even before free agency.

Obviously this would make owners unhappy, so the combined with this May suggests limiting Free Agency contract to a maximum of 5 years. This would mean that even if you were paying a player $25M a year, the full contract value would only be $125M. This would slow down the huge ballooning contracts of many hundreds of millions without limiting AAV per year and, presumable, not price smaller market teams out as much.

Summary over.

Not being someone who's hugely well versed in baseball front office stuff, I'm curious what people think of this. Personally the limiting Free Agency contracts to just 5 years doesn't seem like a big enough benefit to the owners to make them willing to shorten team control. I also question how much that will help small market teams. I fear that it would just make the bigger markets willing to pay crazy AAV knowing that their only taking on 5 years liability so if the contract ends up being a dud they're not chained to it for 8, 10, or more years.

 

Small market teams aren't gonna vote for that. Could you imagine pittsburgh agreeing to just lets say three years of team control of Skeens?

[gehringer_2]

1 hour ago, RedRamage said:

Just watched this video by Trevor May: 

 

The TL;DW (Too Long; Didn't Watch) version: Free Agency seems to have issues. The problem, from a players perspective: Teams have control for a LONG time... players are taught that Free Agency, which may not come until way late in a player's career, is the one time to get that big contract so they need to maximize that one deal. They may never get another shot. Because of this players are unlikely to resign before free agency and other things (like team, city, family, friends, etc) become less important than the big payday.

May suggestion one possible solution (while admitting it's just an idea, it may not work): Reduce the time it takes to get to free agency. If players see that they have a shot at two (or more) big deals, there may be less driving force to maximize that Free Agency contract. They may be more willing to re-sign with a team even before free agency.

Obviously this would make owners unhappy, so the combined with this May suggests limiting Free Agency contract to a maximum of 5 years. This would mean that even if you were paying a player $25M a year, the full contract value would only be $125M. This would slow down the huge ballooning contracts of many hundreds of millions without limiting AAV per year and, presumable, not price smaller market teams out as much.

Summary over.

Not being someone who's hugely well versed in baseball front office stuff, I'm curious what people think of this. Personally the limiting Free Agency contracts to just 5 years doesn't seem like a big enough benefit to the owners to make them willing to shorten team control. I also question how much that will help small market teams. I fear that it would just make the bigger markets willing to pay crazy AAV knowing that their only taking on 5 years liability so if the contract ends up being a dud they're not chained to it for 8, 10, or more years.

 

the people left out in the calculation are the fans. I'm 100% for a system that pays players more when they are actually producing, but the one thing I want even more than that is some kind of 1st refusal system that allows teams a better chance at retaining their players and building fan bases and brings back a higher proportion of one-team careers among the best players.

Edited Tuesday at 04:16 PM by gehringer_2

[GalagaGuy]

I think there absolutely needs to be a salary cap.  What would make sense to me is for MLB to figure out the financials, especially the profit sharing aspects, and then determine a floor.  Once you know how much money the small market teams can spend without losing money year after year, add maybe 75 million and call that the cap.  

[oblong]

2 minutes ago, GalagaGuy said:

I think there absolutely needs to be a salary cap.  What would make sense to me is for MLB to figure out the financials, especially the profit sharing aspects, and then determine a floor.  Once you know how much money the small market teams can spend without losing money year after year, add maybe 75 million and call that the cap.  

I think MLB would love that.

The MLBPA?  Not so much.

 

[gehringer_2]

11 minutes ago, oblong said:

I think MLB would love that.

The MLBPA?  Not so much.

 

MLPBA is a very weird union. It seems the dynamic is that every player's ego keeps telling him that next year he's going to break through as the next Ohtani, so they keep accepting deals that only protect the prerogatives of the superstars while 80% of them toil at the league minimum. 

[gehringer_2]

Semi-Serious question: If you institute a salary cap without normalizing team revenue across the league (which ain't gonna happen), what will be the outcome of the Yankess and the Dodgers etc having hundreds of millions of dollars in excess profits compared to the other teams? I'm not sure what it is, but I'm sure some of the outcomes will be in some way bad (e.g. complete domination of scouting and development tech, filching and stashing every good executive  - sort of like the Yankees did with players in the reserve era, financial distress of the poor teams as their capital appreciation potential collapsed.....). Would/could any of these things happen? Would it be worse than allowing the rich teams to keep spending more on players or not? That is the question.

Edited Tuesday at 04:46 PM by gehringer_2

[GalagaGuy]

40 minutes ago, oblong said:

I think MLB would love that.

The MLBPA?  Not so much.

 

Throwing some numbers out there, let's say there's a cap of 200 million and a floor of 125 million next year.  That would actually result in more money being paid to the players than what we saw this past season.  

[IdahoBert]

52 minutes ago, GalagaGuy said:

I think there absolutely needs to be a salary cap.  What would make sense to me is for MLB to figure out the financials, especially the profit sharing aspects, and then determine a floor.  Once you know how much money the small market teams can spend without losing money year after year, add maybe 75 million and call that the cap.  

That seems rational, and I’m not sure if either the players or the team owners would agree to it. I think both are likely to say something to the effect of…

[Edman85]

Salary caps don't redistribute talent.

Salary caps suppress salaries and decrease expenses for owners.

The luxury tax is a soft cap and has gotten more severe with every CBA. Has it helped parity? I would submit it hasn't. What has helped are things like the competitive balance draft picks.

[gehringer_2]

3 minutes ago, Edman85 said:

The luxury tax is a soft cap and has gotten more severe with every CBA. Has it helped parity? 

I'd guess part of thing is that an owner in Pittsburgh or KC can't commit to long term contract based on LT transfer payments because you have no idea from year to year how much, if any, it's going to be. There is nothing that says tomorrow Cohen decides he's going to try to build through his farm system and stop splurging on FA's and suddenly LT payments start shrinking across the league. Not to mention that the $ being moved still aren't enough to make a big impact once they are divided up by the number of recipients.

[chasfh]

16 minutes ago, GalagaGuy said:

Throwing some numbers out there, let's say there's a cap of 200 million and a floor of 125 million next year.  That would actually result in more money being paid to the players than what we saw this past season.  

I agree that there should not be a cap without a floor, because that would have the effect of restraining salaries at the top end without incentivizing spending by teams at the bottom. IOW, it would hamper five, maybe ten teams tops, and wouldn't affect any of the others, many of whom are only too happy to spend nothing, field a perennial loser, and rack up guaranteed profits and skyrocketing franchise value.

I do believe the ceiling and floor should be a lot closer than your example. I believe the NBA essentially requires teams to spend anywhere from a max amount of payroll to 90% of that max amount. That sounds good to me in principle. Teams should be made to spend competitively among one another to remove the natural advantage big markets have. When it comes right down to it, Pittsburgh and Colorado and Kansas Citty should have the same chance to sign top tier free agents as New York and Los Angeles and Chicago do.

It's true that big markets generate more revenue, so, there should also be more revenue sharing among teams, including of local broadcast and maybe even some degree of gameday revenue.

Of course, to make this work, the books of every team must be open, not necessary to us the fans, but at least to some independent commission appointed to oversee the whole thing.

And as I spool this out in writing, I can easily see how this does not have a ghost of a chance of ever happening.

 

[RedRamage]

1 hour ago, gehringer_2 said:

the people left out in the calculation are the fans. I'm 100% for a system that pays players more when they are actually producing, but the one thing I want even more than that is some kind of 1st refusal system that allows teams a better chance at retaining their players and building fan bases and brings back a higher proportion of one-team careers among the best players.

I thought about something like that too, but I'm not sure how it would work that would actually help smaller market teams compete. (This of course assumes a smaller market team where ownership actually wants to compete, not just make a profit and call it good enough.) Let's say the Twins have a player going up for free agency. The Dodgers or Yankees can just through a huge number at said player. If the Twins have the right to match that offer, that doesn't mean they'd have the ability to match it.

Maybe some sort of "restricted" free agency where players are able to negotiate with other teams but the current team is allow to match but if they elect not too they get some sort of bonus? Actually... is might be nice if the new team has to pay a set fee to the old team for a restricted free agent, but again this assumes a small market team that's trying to compete. There'd have to be some salary floor in this situation to make sure the owner isn't just pocketing the fee.

[RedRamage]

13 minutes ago, chasfh said:

It's true that big markets generate more revenue, so, there should also be more revenue sharing among teams, including of local broadcast and maybe even some degree of gameday revenue.

Of course, to make this work, the books of every team must be open, not necessary to us the fans, but at least to some independent commission appointed to oversee the whole thing.

And as I spool this out in writing, I can easily see how this does not have a ghost of a chance of ever happening.

I agree with everything here, include, unfortunately, the last part. 

Salary Cap/Floor ultimately benefits the owners, and as @gehringer_2 pointed out, teams could find ways to overpay for other things (coaches, facilities, scouting, developing, etc.) to gain and advantage there if they're just capped on player salary. 

I think a big part of what makes the NFL successful is that a HUGE portion of team revenue comes from TV rights, and those rights are shared across the board. And in my opinion there's good reasoning for this. No one is paying to get the YES Network, for example, to watch the Yankees take batting practice or run fielding drills. They're paying to watch the Yankees play other teams, so should not the other teams get some of that revenue? 

But getting sharing like that will be very, very hard to get the owners to all agree too and you're right that it will require open accounting.

[gehringer_2]

16 minutes ago, RedRamage said:

Let's say the Twins have a player going up for free agency. The Dodgers or Yankees can just through a huge number at said player. If the Twins have the right to match that offer, that doesn't mean they'd have the ability to match it.

IDK, In the abstract this is true, but I think in reality the ability to match does in general depress offers, though of course it won't in every case,  and it does save teams risking bidding against themselves at the front end of the process. 

[KL2]

1 hour ago, GalagaGuy said:

Throwing some numbers out there, let's say there's a cap of 200 million and a floor of 125 million next year.  That would actually result in more money being paid to the players than what we saw this past season.  

Agents and players dont care about the Austin Romies of the world getting more money