July 12, 2002
More competitive balance and salary cap stuff

Jeff Cooper has published his promised response to my most recent post about competitive balance in baseball.

Jeff focuses on the period since 1995, when baseball signed its last Collective Bargaining Agreement, and came to the conclusion that baseball does indeed have less competitive balance than the NFL. He suggests that the revenue sharing in the NFL as well as its salary cap have helped it to enable more teams to truly compete for playoff spots than in baseball during the comparable timespan.

I don't deny that the rapid increase in average salary in MLB has made it very difficult for small market teams to compete, though it should be noted that when MLB talks about "small markets", they often include places like Houston and Philadelphia, while lumping Seattle and Cleveland as "large market". If you can wrap your mind around that, you're more limber than I am.

What I do dispute is the following:

  1. The NFL model has led to greater competitive balance

  2. The NFL model would be an appropriate one for baseball to adopt

  3. A salary cap would help small market teams to compete better

  4. Competitive balance is in itself a good thing

In order:
  1. Joe Sheehan has put forth the best argument regarding the NFL's competitive balance: It's mostly perception based on a small number of games and a large number of playoff spots (12 for the NFL versus 6 for MLB). In many years, a 6-8 team still has a shot at the NFL playoffs, whereas a 60-80 MLB team is probably 20 games out. The NFL has an unbalanced schedule that rewards weaker teams, so it's not unusual for a 6-10 or 7-9 team to make no significant changes and win a wild card with a 9-7 or 10-6 record the next year.

    If you allow 12 teams (6 from each league) to the MLB playoffs, you add Toronto, Minnesota, Anaheim, and Montreal to Jeff's chart. As the yearly standings show, many years any club over .500 would be in contention. Isn't that how it is in football?

  2. In the same Baseball Prospectus article linked above, Sheehan also discusses how the NFL, with its national TV revenue, operates on a completely different financial model than MLB. For one thing, there's no such thing as a "small market" in the NFL since everyone gets 1/32nd of the TV money, and even if there were it has no effect on competitiveness, as teams have been willing to move from LA to St. Louis and Oakland as well as from Houston to Memphis.

  3. Back in the golden days of the reserve clause, when salaries were entirely dependent on what the owners wanted to pay, there was essentially no competitive balance as I showed back in May. From 1921 to 1964, the Yankees won 29 pennants, while the Cardinals, Giants, and Dodgers combined to win 30. Of the other teams, only Detroit (6) and the Cubs (5) won more than three pennants over this time frame. It's true that there were only two playoff spots per year during this time, but there were also only 16 teams and no such thing as free agency. Having the ultimate salary cap in place was no help to the majority of teams.

    In this article, Joe Sheehan discusses salary caps in much more detail. The Baseball Prospectus has been all over this issue for months now.

  4. In baseball, we talk about "competitive balance" as a good thing. In football, the supposed model for competitive balance, we talk about "parity", usually in a negative fashion. In the 1995 to 2001 time period that Jeff discusses, there are usually one or two really good teams in the NFL and a whole lot of mediocre ones that will compete for the playoffs but have no real chance of getting to (much less winning) the Super Bowl. This is directly attributable to their hard salary cap. To quote Sheehan one more time:

    To the extent that the salary cap contributes to competitive balance, I would say that it works negatively: it punishes success, forcing well-built, winning teams to shed talent on a near-constant basis. It also makes it virtually impossible to trade, increasing the impact of a single catastrophic event in a league where teams cannot make adjustments on the fly. A system that punishes success, rather than rewards it, seems an odd construct for any endeavor, and it's one I have difficulty supporting.

    Even in the era of free agency, a well-built baseball team can be competitive for years because they are not forced to make personnel decisions based on an artificial construct. The Yankees can continue to employ players that they developed in their farm system like Mariano Rivera and Bernie Williams because they won't be prohibited from paying them market value when they acheive free agent eligibility. Not to get all Sam the Eagle on you here, but shouldn't hard work and success be rewarded in America?

It's true that teams make deals to dump salary, and it's true that teams let star players go because they can't pay them what they're worth. As the Mariners and A's have shown, this need not be a death sentence. Smart teams make moves to dump overpriced players for prospects, knowing full well that like the Mariners, Astros, Braves, Cardinals, and Indians of the 90s and the A's, Twins, and Reds of today, every team that has invested wisely in their product has been successful.

One final word: Bud Selig and the owners have spent the years since 1995 denigrating their product in order to get people to believe that a device whose only purpose is to limit their costs is good for the game. The first thing they did after the exhilarating and uplifting World Series of 2001 was to announce that they wanted to kill two franchises, one of which is seven games in first place and the other of which has just traded for two All Stars because they think they can win the NL wild card this year. If they had spent this time talking about all of the wonderful, exciting, unique, and historic things that have happened in baseball instead, would you still feel the same way about the state of the game and its finances?

Posted by Charles Kuffner on July 12, 2002 to Baseball

I think a salary cap would be good for the mlb becuase it would make it more compettive. For example say the Yankees they have all these great players why cause they pay them gobs of money and how could you pass that up no one could. so what im sayin is if we put a salary cap on you couldnt give the players as money cause of the cap.

Posted by: Philip on January 19, 2006 10:34 AM