The news media today, not just the sports media, are all over the Ray Rice wife-beating case, trying desperately to make it sound like it is somehow political, and that one side or other actually comes down on Rice's side on this. This is even though there is no "right" side -- he is grotesquely and criminally wrong for assaulting his wife, and she is morally blind in asking the world to leave their marriage alone, forgetting that the absence of severe punishment to her husband would give a generation of young fans the idea that women are disposable chattel and striking them might some time be justified.
So moving on to the elder sport, I'm taking a moment to write on a topic that would seem better covered in 2009 or even earlier: the economic disparity in Major League Baseball (MLB) is pathetic, unfixable, and needs to be properly adjusted to ensure long-lasting competitive balance.
This is a topic that rears its head much more often in years in which the New York Yankees commit close to a half-billion in guaranteed salaries, buying out most or all of the quality available free agents in the marketplace. They did that in 2009 and effectively bought a world championship, the only one of this Century. They also did that in 2014, and are apparently not going to sniff the playoffs. That does not make my argument any less relevant.
Since the mid 1990s, one team has led the league in salary commitments every year but one (1998), and if you've read this far you know they play in the Bronx. During the first decade of the 21st Century (the "Naughties"), not only did they lead every year, but with payrolls around $180-200 million, they often led the 2nd-place payroll by so much that the gap between New York and Payroll #2 was bigger than a dozen teams' whole payrolls. That the Dodgers have now caught up with the Yankees in payroll for 2014 only means there are two behemoths where once there was one. It does not void the argument.
Why is this the case? It is the simple confluence of several factors: the Yankees' enormous revenue advantage due to their location and ownership of their own network; the lack of a specific salary cap in MLB (mildly but inadequately offset by the "luxury tax"); and the philosophical distinction between MLB and, say, the NFL, the latter regarding itself as a league with common goals of success while the former maintains economic separation between its teams.
At the risk of putting up a strawman, the argument against doing anything about this generally includes points like:
(1) The owners of even the small-market teams are billionaires; they should step up and compete for free agents like the Yankees do
(2) The Yankees don't win the Series every year, shoot, they aren't even going to the playoffs this year
(3) The small-market owners just pocket the luxury tax/revenue-sharing funds rather than spending them on players.
(4) Etc., etc., etc. Just read a Yankee fan comments section; it'll all be there.
I want to address the first three up there pretty quickly, even though the disposition of those arguments is actually fairly subtle. Well, #2 isn't very subtle -- getting to the World Series requires navigation through a challenging playoff system, and winning it yet a further round. The true test of long-term success is not how many rings you win, but how often you put yourself in position to do so by making the playoffs. Once you get to the playoffs, as Oakland GM Billy Beane argues, it's a crap-shoot. The sample size just isn't large enough; not enough games to make, sustain or deny an argument.
OK, there is a subtle part of #2. A team with a virtually unlimited payroll budget ends up with long, expensive contracts committed to players who historically don't finish them well. One risk of that approach is that periodically a set of such players will age simultaneously, leaving the team vulnerable if it does not maintain its farm system well (q.v. the 2014 Yankees) and provide replacements. Those longer contracts can only start when the player is a free agent, which is normally at around age 29-30, meaning that injury and age-based decline becomes a risk before the contract is halfway done. An unlimited payroll budget is great, but it does take intelligent planning and not a reactive nature.
The "owners are billionaires" path (#1) is hard to explain to some people, because most fans fail to distinguish the books of the team organization-cum-corporation from the wallet of the owner. Carl Pohlad, the expansively wealthy late owner of the Minnesota Twins, was constantly berated for not diving into the free-agent marketplace, despite owning a team in the mid-to-small market revenue scope. "Why", fans would ask, "doesn't he dip into that massive bankroll he's got ...?".
I can only answer this way. Imagine you owned 100 shares of GM stock. GM decides it needs to build a plant in Bug Tussle, Arkansas, and sends you a bill for $3,665.54 as your share of the cost of the plant. You are, after all, a shared owner and need to share the costs of the company, right? OK, that's not going to happen, but you get the point. GM can't build that plant unless its own revenues and profitability allow the expense. Likewise, a Minnesota baseball team that takes in $200 million in a season cannot devote $180 million of it to player salaries alone and still pay the stadium, the staff, the operating costs, the minor leagues, etc. To ask owners -- well, to expect owners to fund player salaries from their pockets is to betray a sorry understanding of the workings of contemporary business.
The #3 argument is different in that it's more an outcome. Why do we think the small-market owners are not spending on free agents? Look, it is patently obvious that a handful of teams -- two now, 4-5 at times, but that's out of 30 -- are able to bid the price of free agents up to where only that handful of teams can create a roster with even one such player, let alone five or more. Moreover, the risk created by a small-market team investing 25% or more of its maximum player budget in one free agent is immense -- injury, blocking minor league players at that position, etc.
For $40-60 million, you can build a team based on predominantly farm-sourced players (Miami is doing that for less), trading 2nd or 3rd-year arbitration players to replenish the farm system. How often is such a team going to be in a position where using the luxury tax funds will bring in that one missing talent from the free agent marketplace?
Suppose the Marlins were almost there for 2014, but just needed a second baseman. Are you suggesting that they should have paid the ultimate market value for the top second baseman free agent available, Robinson Cano? Cano signed for $240 million for ten years. The Marlins' payroll for 2014 is $47 million; adding Cano would have made $24 million of a $71 million payroll committed to one player of 25. Does it make economic sense either for the team to take its revenue-sharing funds and put it all on one player? Does it make sense for the owner to put his own money into such a signing?
Let me give you two options. Teams can succeed because of competent organizations making smart drafting choices, smart trades, wise allocation of funds and free agent signings. Teams can also succeed by papering their payroll with unlimited funding such that they can't help but luck into a bunch of bought players far better than the average at their position. The former is the National Football League. With its salary cap, there is economic parity -- the only way to succeed is competence, and the same teams that are consistently successful -- New England, Denver, Seattle, San Francisco -- do so with excellence in their organization. The latter is Major League Baseball, replete with economic bullying, where those who make the playoffs consistently -- New York, Boston, LA, Anaheim -- are those with the revenues to bully the smaller clubs in stocking rosters; where the small markets succeed only periodically when a couple adjacent seasons of drafting come together in an excellent team that cannot be held together.
I couldn't care less if a salary cap in baseball meant that the largest teams made absurd profits. Baseball needs a system where competence, not revenues, drives success. That cannot come soon enough, and in a year where all that doesn't seem to be playing out as I described, it's just as valid.
Copyright 2014 by Robert Sutton
No comments:
Post a Comment