Salary Cap Not "Needed"

According to the MLB owners, the Dodgers are going to win every World Series from now until the end of time.  Never mind the fact that they wouldn't have won last year if Isaiah Kiner-Falefa had bigger feet or that they were down 2-1 against the Padres in 2024 and were thisclose to another Division Series loss that would've likely gotten Dave Roberts fired.  Nope, the Dodgers are the "problem."  That's why the sport "needs" a salary cap.

Also according to the MLB owners, smaller-market teams have no chance of ever being competitive.  Never mind the fact that the Brewers and Rays have the second- and third-best records in baseball or that Cleveland is tied for first in the AL West or that Arizona made the World Series three years ago (after beating the Dodgers in the playoffs).  Nope, only the teams that play in large markets have any shot at making it to the playoffs, let alone the World Series (where they'll apparently just lose to the Dodgers anyway).  That's why the sport "needs" a salary cap.

If you were to believe the owners' stance, it's only a handful of large-market, big-spending teams that are capable of winning.  Meanwhile, the Mets missed the playoffs last season and have been a disaster this year despite having the second-highest payroll.  Fresh off a World Series appearance, the Blue Jays are under .500 with the fourth-highest payroll.  And the Phillies were a mess to start the season until they replaced Rob Thomson with Don Mattingly.  Nope, it's pre-scripted for those teams to be good.  That's why the sport "needs" a salary cap.

Both the owners and the players have presented their initial list of things they'd like to see in the new CBA.  To say they're far apart would be a massive understatement.  They aren't even on the same continent!  Which means there's no way of avoiding what we've all been fearing but also have all accepted we know is coming.  There will be a lockout when the CBA expires in December, and it'll probably be a long one.  All because of the owners' insistence that baseball "needs" a salary cap.  Which it doesn't.

In case you couldn't already tell, I'm completely on the MLBPA's side on this issue.  A salary cap is a non-starter for the players, and they almost certainly won't be budging on that point.  Nor do they have a reason to.  And the owners need to realize that.  Because the harder they push for a salary cap, the harder the players will push back.  So, unless they want the 2027 MLB season to feature as many games as the 2004-05 NHL season did, they need to back off their demand for a salary cap.  Which the players will never agree to.

Nobody is arguing that the economics of baseball aren't broken.  There are far too many teams, primarily in smaller markets, that spend nothing on payroll and make absolutely no effort to be competitive.  Those owners pocketing their luxury tax payouts are a far bigger problem than the big spenders who contribute that luxury tax money.  And the idea that smaller market teams can't compete is a myth.  Just ask Milwaukee, Tampa Bay and Cleveland.  So, no, sorry, a salary cap is not the answer.  Especially since the owners want to use it to solve a problem that they created themselves.

I'll eventually go into the specifics of each side's initial CBA proposal in another post, but the insistence on a salary cap comes down to one thing, and it has nothing to do with competitive balance.  As the players immediately pointed out, they (the owners) don't actually care about that.  They care about money.  Specifically, they care about their franchise values, which lag behind those of the NFL and NBA.  What do the NFL and NBA (and NHL) have in common?  A salary cap!  The owners see it as a way to bring their franchise values up.  That's why they want one so badly.

However, the NFL and NBA would be the first ones to tell you that their systems aren't perfect, either.  The NBA didn't like the "superteam" era and responded by overcorrecting, which created parity, but also made it nearly impossible for teams to retain their own free agents.  And how often do NFL stars have to restructure their contract so that their team can get more cap room?  Worse than that, how many elite players that teams want to keep but can't afford to are "cap casualties" every offseason?

Baseball's structure isn't set up that way.  And, even if the owners were to institute a salary cap, it wouldn't be as easy to implement as they think.  MLB contracts are guaranteed.  NFL contracts aren't.  So, when an NFL team cuts a player, they no longer have to pay that player's salary.  If he was set to make $10 million, that's $10 million in savings for the team.  By signing someone else for $4 million, that's $6 million less in payroll.

With guaranteed contracts in MLB, though, the team would still be on the hook for that salary regardless.  And not to mention the deferred money that will still be owed to some of these players (the deferred contracts are an entirely separate issue).  So, releasing a player who has two years and $15 million left on his contract isn't saving you $7.5 million in each of those years.  You're paying that in addition to the salary of his replacement (assuming he isn't picked up by another team).  Which would only increase the amount the high-payroll teams are spending on salaries (with half of those players not even playing for their team).

On the other end of the spectrum, implementing a salary cap would also mean implementing a salary floor (which I actually am in favor of).  That would mean the lower-spending owners would need to dramatically increase their payrolls basically overnight.  Granted, if you own a Major League Baseball team, you should have the money to be able to do that.  But, shelling out more money for player salaries doesn't necessarily immediately equate to the increased revenue needed to cover them.  So, would they really be able to afford the increased spending?

For any type of salary cap system to work in MLB, it would have to be phased in gradually.  To do it any other way would create chaos.  There would be massive roster turnover across the Major Leagues.  That much is obvious.  But you'd still have long-term commitments to players with guaranteed contracts.  You can't just stop paying those.  The only option teams would have with certain players would be to trade them to a smaller-market club (who'd then be using half of their salary cap on one player).  Which may not even be possible since players with 10 & 5 rights (a 10-year veteran who's been on the same team for five or more years) can veto any trade.

As the players have correctly pointed out, nobody is forcing Steve Cohen to pay Juan Soto $51 million a year for 15 years.  Yes, some teams have more resources than others.  There's no denying that.  But, if a salary cap were put in place, the players are the only ones who'd suffer.  The owners proposed maximum contract lengths in their initial CBA offer, which would obviously reduce the players' earning potential.  A salary cap is just a different way to do the exact same thing.  So, why would the MLBPA have any interest in even entertaining the idea?

The only people who would benefit from a salary cap are the owners.  The players sure wouldn't.  In fact, the players would get screwed.  Which might be part of what the owners want.  With the existing luxury tax system, teams can spend whatever they want, knowing that they'll have to pay a penalty if they go over certain thresholds.  A salary cap would create a fixed maximum amount of money that teams can spend on payroll. 

This year's average payroll is a little over $176 million.  For the sake of this exercise, let's say the salary cap was set at $180 million.  That would be a maximum of $5.4 billion total that can be spent on player salaries across all 30 teams.  This season, the teams with the top 10 payrolls are spending a combined $4.9 billion in player salaries just amongst themselves.  Likewise, say the salary floor was $150 million.  You know how many teams don't even reach that currently?  Thirteen!  Including six that don't even spend $100 million!

What Major League Baseball and the owners are trying to convince everyone is that the only way the game can survive and the only way to prevent the Dodgers from running away with every World Series title is to implement a salary cap.  It's the same argument they made 30 years ago that led to the strike.  It wasn't true in 1994, and it isn't true now.  Can the current economic system be improved?  Yes.  But a salary cap isn't the way to do that.