Why Major League Baseball Needs a Salary Cap October 10 2013

MLB needs Salary Cap for Good of Game

Major League Baseball appears to have lost its fan appeal. Ticket sales are in the toilet for 2009 and the 2008 World Series saw some of the worst Neilsen ratings in almost a decade. The 2009 MLB post season is set. What do these franchises have in common? Except for the Rockies and Twins, they all have the biggest markets and the heftiest player payrolls in the game. This wouldn't be a problem if '09 was unusual, but these expensive teams usually finish the season with a playoff spot. Last year was the first time the Yankees didn't make the post-season under the new revenue system. What is causing a lull in the popularity and TV viewer-ship of America's pastime? It boils down to a lack of competitive parity and a short post-season. Unlike the MLB system, the NFL institutes a 'hard' salary cap. This forces franchises to stay beneath a predetermined maximum. The cap ensures talent stays relatively uniform across NFL teams regardless of their market size or a team's past success.

So far, the NFL's system appears to be working. The MLB's attempt at creating similar equity has been to institute a luxury tax and revenue sharing system. Baseball's luxury tax rules are so relaxed that deep pocketed Steinbrenner has been fined only twice since it was instituted in 2002. The MLB revenue sharing, where, according to Neil DeMause, "every team in the league gets to keep about 60 cents on every new dollar earned" doesn't provide an equal playing field for wins and losses as much as it ensures an equal revenue stream for a majority of owners. An overly relaxed luxury tax allows players' salaries to stay high - so players like it. Owners see a similar gain in revenue sharing because it lowers their investment risk. We all know how much revenue a successful post-season provides. Since so few MLB teams get a shot at the playoffs, few clubs get a post-season revenue boost. With the same collection of franchises winning year after year - teams with the largest salaries become the same teams to consistently make the playoffs. If you're not in this cycle, you have to create your own magic.

By administering policies that serve owners and players, Major League Baseball creates an ideal environment for high-paying franchises to dominate. The majority of fans are excluded, and eventually these fans lose interest and shift their focus to sporting events with more exciting races. More players and owners would benefit in the long term from a league wide salary cap because it would mean closer post-season races. Closer playoff races would mean more fans for baseball. A salary cap would give more teams a chance to make the MLB post-season. More playoff diversity would allow new markets to flourish, in turn opening up the game to a wider audience. This would benefit the brand of baseball, and we all know the brand of baseball is in desperate need of a makeover.