Sports

What's another million?

In print | January 22, 2009

The New York Yankees raised a lot of eyebrows this winter with a free agent shopping spree for the ages. They locked up two starting pitchers, A.J. Burnett (five years, $82.5 million) and CC Sabathia (seven years, $161 million), and the most sought-after everyday player on the market, first baseman Mark Teixeira (eight years, $180 million). These are three very good players, the latter two in particular being the type of stars that October dreams are made of.

When a team commits over $420 million to three players over an eight-year span, people will take notice. And when the Yankees do anything, people take notice, so these lavish salaries without a doubt brought out calls that Major League Baseball should institute a salary cap.

The argument in favor of a salary cap is quite simple. If you allow all teams to spend only up to a certain, reasonable limit, you will create parity in the sport because you won’t have a team like the Yankees out there, grabbing up the best free agents because they have the most money to throw around. And parity’s good, because then everyone has an equal shot at the World Series, which they can squander or take advantage of as they choose.

And there’s certainly a lot to be said for this line of thinking. After all, despite 2008’s World Series matchup between the penny-pinching Tampa Bay Rays and the middle-of-the-pack-spending Philadelphia Phillies, playoff spots have definitely tilted heavily toward the big spenders over the past decade.

However, I think there’s more to the story. While increased parity is great, there’s another reason team owners all around, big markets and small markets alike, are in favor of a salary cap. Instituting one would serve as a massive redistribution of money from the players to the owners. The costly bidding wars that drive the salaries of players like Teixeira and Sabathia through the roof would be cut off much sooner, and the teams would have a lot more leverage in their negotiations with free agents because their spending would, by rule, be capped.

This may not be very compelling to the average fan. After all, all these guys, players and owners, make so much money either way that it seems inconsequential which group gets the extra millions of dollars. While we would not weep for Mark Teixeira if he were to make $15 million per year instead of $22.5 million, bear in mind that these insane contracts apply to a small portion of the sport’s players. For many players, a Major League career is very short-lived, and while their annual salary during their careers might seem high (ranging from $350,000 to a few million dollars per season for most players), their ability to earn is gone or greatly diminished by the time they’re in their early thirties, so it’s not like the median MLB player is made in the shade and set for life by the time he retires. It is the player who plays out an unremarkable five-year career who could end up suffering most from the salary cap’s redistribution, even though the big-name, big-money players like Teixeira and Sabathia would be most visibly affected. The average player’s career earnings are not outrageous, and it would be regrettable to chip-in to them.

Also, consider the structure of a Major League player’s contract, as outlined by the Basic Agreement between the owners and the players’ union. When a player gets called to the Bigs, his team controls him for the first six years of his career. For the first three, they have the right to pay him the league minimum ($350,000). For the last three, the team has the right to merely offer salary arbitration, and while this will substantially increase the player’s paycheck, it still means that for the first six years of his career, he doesn’t get to determine his salary in a free market. For instance, Teixeira is 28 years old, and he has been a top player in the game for five seasons. However, this winter was his first opportunity to go into a free market and shop his skills around. He was robbed of that chance by the amateur draft when he became a professional (you play for the team that picks you, or you don’t play at all) and during his first six years as a Major Leaguer by the Basic Agreement. We should not lightly obstruct these players’ opportunity to shop around for the best contract they can get, considering that they so seldom get that chance.

The draft, which awards the best amateur talent to the worst teams, coupled with the arrangements created by the Basic Agreement, creates a great deal of parity, so that a team who drafts well and develops players well can compete, regardless of payroll. Those same two institutions greatly hamstring a player’s ability to earn, and while a salary cap would undoubtedly create more parity, it would also cut further into the players’ piece of the MLB revenue pie. The players do make a lot of money, but the owners make a lot more, and we should be wary of routing wealth from the former to the latter, particularly when measures are already in place to allow a well-run team to succeed, even with a small budget.

Josh is a sophomore. He can be reached at jabel1@swarthmore.edu.