The case against a salary cap in baseball

News item: John Henry renews his call for what he describes as an "enlightened" version of a salary cap in baseball.

We hear the argument for a cap in baseball quite frequently, usually around times when the Yankees have spent a lot of money. Allow me to say, then, that I disagree with both the owner of my favorite baseball team and the editor of this very publication and suggest that a salary cap is really not going to fix much of anything.

Now, before you all come after me with pitchforks, understand something: I'm not suggesting the current system is perfect, or even great. Far from it. The disparity between baseball's "haves" and "have nots" is truly unfortunate. I certainly don't want to sound like I'm suggesting the "market" will regulate itself, because we all know how well that works out. And I'm honestly not sure I can come up with much by way of an alternative; I simply don't have the economic chops. It's exhilirating to watch young teams come together like last year's Rays, but it's equally depressing to know that at some point they may have to break up the band. 

But a salary cap doesn't really solve this problem. In fact, it makes it even more likely that the Rays would have to trade, say, Carl Crawford in order to get under the cap and avoid the luxury tax penalty. If you don't believe me, look at the NBA, where the Suns were prepared to trade Amar'e Stoudemire, a 26-year-old big man who's made the All-NBA team two years ago, simply because of the cap implications. The Portland Blazers are likely getting better offers for teams hoping to acquire Raef LaFrentz, a broken-down veteran who is likely to never play another NBA game, than the package the Hornets nearly received for Tyson Chandler, another 26-year-old who just a year ago was a key piece on a team that came within a game of the Western Conference Finals, simply because LaFrentz's contract is expiring and insured, meaning teams will get that much more cap space to play with this season and next. The Knicks already blew up their team for the next two years to improve their cap situation in order to sign free agents two summers from now. With a restrictive cap in place in baseball, something entirely similar to this could happen - perhaps not to these ridiculous extremes, but a situation where, say, the World-Champion Phillies have to trade Cole Hamels because he's due a pay raise and they already have a large percentage of their cap room committed to Howard, Utley, Lidge, and Rollins seems like it could be plausible enough. 

If the goal of a salary cap is to create parity, then in the NBA and the NFL, at least, it ain't working so hot. Were the NBA season to end today, the eight playoff teams in the Eastern Conference would be Boston, Cleveland, Orlando, Atlanta, Detroit, Philadelphia, Miami, and Milwaukee. That's six of the eight playoff teams from last year, and one of those two won a title two seasons ago. In the Western Conference, seven of eight current playoff teams appeared last year with Portland the only new additions. And seven of eight Western teams were repeaters from the year previous as well. The NBA has only seen six seven different teams win a title since the 90s - the Bulls, Rockets, Lakers, Spurs, Pistons, Heat, and Celtics.

Ah, but it's the NFL with true parity, no? Well, no. ESPN's Jayson Stark makes this argument quite a bit. The short form is this: in the last eight years 13 different teams have gone to the World Series, while only 12 have gone to the Super Bowl. 43% of teams have made the playoffs in MLB, while only 37.5% have in the NFL. What others see as parity, I personally see as small-sample-size-related aberrations. But that's just me. The point is that for all the talk of parity in the NFL, baseball is the league that can lay a true stake to the claim. 

All of the arguments from a fan's perspective concern the idea that a team like the Yankees is able to just sign whoever when they become free agents. If free-agent spending on its own automatically equalled wins, then obviously we'd be talking about the Yankees as winners of eleven consecutive World Series. But that's maybe a bit facile, and disingenuous, since they did make the playoffs most of those years and but for a few breaks conceivably could have won a few more. Here's a different spin on that argument, then: the team with the second-most wins in our current decade? That'd be those perennially cash-strapped Oakland A's, whose success in spite of limited resources became the inspiration for a book you may have heard of. Given that we're all coming around to Billy Beane's notion that the playoffs are more or less random chance, then, we can conclude that the A's, who've averaged roughly $50 million in payroll over the last ten years, have in at least four of the last ten years had roughly the same shot at a World Series title as the Yankees, who've outspent them by more than three to one in the same time span.

We need look no further than last year to see that the correlation between a high payroll and winning is not as ironclad as people seem to think. Last year the Rays won the AL East with a fairly small payroll, and they don't look like they're going anywhere for a while. The Red Sox, in fact, for the first time in many year, did not have the second-highest opening-day payroll. All three teams who came in higher than the Sox failed to make the playoffs, and one - the Detroit Tigers - finished in last place. We also had our first-ever "100/100" team - the Seattle Mariners, who spent $100 million on salaries while finishing with more than 100 losses. (Salary figures from Cot's, in case you were wondering.) 

The truth is that spending on player contracts - be it players acquired via free agency, trade, or development - is not the sole solution to a team's losing ways. The Yankees - as well as the Red Sox, Angels, Cubs, Phillies, White Sox, and others - have succeeded over the past few years not just because they've spent so much money, but because they've spent it smartly in many cases. These teams have a lot of salary tied up, but it's tied up in their best players (for the most part - you can probably argue against a few guys on each team, but whatever). Teams get in trouble when they assign inappropriate values to players. The Mariners have had money to spend the last few years; they've used that money on guys like Carlos Silva, Jeff Weaver, Jarrod Washburn, Richie Sexson, Kenji Johjima, Miguel Batista, Jose Guillen... you get the idea. The Royals have found themselves in possession of the occasional wad of cash, but since they're the Royals and not a desirable destination for free agents, they've been forced to overpay; it worked out with Gil Meche, but much less so with, uh, Jose Guillen again. There are many more examples out there. A salary cap is not going to solve this. It might save some teams from themselves, I suppose, but it will not automatically turn bad GMs into a throng of Beanes, Epstein, and Friedmans. Success will continue to follow teams who draft well, trade well, and utilize all aspects of baseball operations to their advantage, cap or no.

What the cap will do is punish teams who have a glut of young talent mature all at once - the aforementioned "Amar'e/Chandler scenario." It will probably lead to stricter rules that tie salaries to draft slots, like the NBA and NFL, so kiss the days of the Red Sox drafting the likes of Lars Anderson and Ryan Westmoreland good-bye. Also, it will lead to the kind of situation where, say, the Nationals sign Teixeira, but then have no cap room left over to form an actual team around him, so he sulks while Wily Mo Peña and Josh Willingham strike out while he's at first base - call it the "Baron Davis on the Clippers" scenario.

While I'm knocking down arguments, I've also noticed that people with little understanding of the situation often point out that a cap is useless without a floor, because teams like the Marlins and the Twins would have no incentive to spend. What these people fail to understand is that in the other three major sports where a cap is present there is also a floor. There is no way this would not be the case in baseball. So calm down with that argument.

Before everyone thinks I'm getting a little too right-winged on the issue, let's consider the real motivation here: John Henry is a smart man, and we assume that he recognizes that his Red Sox do benefit from the current system. So why is he calling for the cap? It's certainly not out of some altruistic nobility towards the common fan. The Red Sox would not "pass the savings on to you." Tickets, memorabilia, and concessions would likely still cost the same, and that cost would continue to be high. Perhaps the team would re-invest that money into the other areas of baseball operations - scouting, player development, the medical/training staff, etc. - but they already spend a lot on those areas to begin with. So my guess is that Henry and the other owners are more interested in more money for their own pockets. And Henry did pretty well for himself last year, at that. So think about that when forming counter-arguments.