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MLB Salary Cap

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Should MLB have a salary cap?Usually after a big market team such as the New York Yankees or the Boston Red Sox wins a World Series, a discussion arises amongst many baseball analysts, which is, should the MLB institute a salary cap. The answer to this discussion is: yes, MLB needs to institute a salary cap in order to increase revenue taken in by small market teams and also to give teams that are out of the playoff race before the season begins a chance to compete for a championship.

Over the past twenty years, the NFL, NBA and NHL all have instituted a salary cap. This move by the other three major pro leagues has allowed for an equal level playing field. A salary cap has allowed teams, whether they are in a big market such as New York, Los Angeles or a small market city such as Pittsburgh or Cleveland, to compete for a championship.

The same situation in baseball was seen in the NHL earlier this decade. The NHL was accustomed to seeing the Detroit Red Wings, the hockey version of the New York Yankees, rolling out their checkbook to sign any player they wanted. This lead to a huge competitive disadvantage, because at the end of the season, it was the same teams competing for the Stanley Cup, while other teams were basically holding down the fort at the bottom of the standings. After the NHL missed a season due to a lockout earlier this decade, a salary cap was enforced. It brought down the teams accustomed to "buying championships" to having to build via the draft, and it allowed teams that were cellar dwellers, such as the Tampa Bay Lightning, to compete and even win a Stanley Cup.

Another example is the NFL. Since the year 2000, over 85 percent of the teams in the league have made the playoffs at least once.

If baseball were to institute a salary cap, more teams, such as the Kansas City Royals and the Cincinnati Reds, would have a chance to compete for a playoff spot rather than scouting for the upcoming draft. A salary cap would also force big market teams to actually build a team through the draft and not via free agency. The direct result of a salary cap would be more competition across the league, which would then lead to increased revenue. If more teams are competing for the playoffs, then attendance would increase all over the league, which means more money in the pockets of owners.

A salary cap would also protect teams with large payrolls that have made mistakes with big financial commitments that did not pan out. For example, the Detroit Tigers went through a stretch of fifteen plus years of not making the playoffs, and when they did in 2006, owner Mike Illitch decided to increase the payroll to where it is the fifth highest payroll in all of baseball because he sensed a championship run which did not happen. As a result of bad financial commitments, the Tigers are now stuck with high salary players that are way past their prime or have been injury plagued. The Tigers are now forced to break up their young nucleus to clear up payroll. In a salary cap world in which contracts are not guaranteed, teams would be able to cut loose players past their prime taking up essential cap space without sacrificing their future.  

A salary cap in baseball makes too much sense, but the problem is that, like most sports, baseball too is ratings-driven. The MLB needs big market teams to compete for championships so television ratings can increase. If a salary cap is instituted, it will lead to more competition amongst teams, meaning more small market teams would have a chance to win a championship, something baseball may not be able to afford in a bad economy.

Author of this article: Ali Maki
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