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Under The Big Straw Hat - No. 9: Does Baseball Need A Salary Cap?

Given all the recent player movement in baseball, reader jtr5708 asked my opinion of a salary cap for baseball. Here are my thoughts.

There are three important steps that can be taken to level the playing field in baseball regarding salaries and payroll. A salary cap is not one. Here is what I think needs to be done.

1) Teams should be required to achieve a spending "floor" on player development and player salaries. There should be a minimum amount of money required to be paid for player development and salaries negotiated by the union and Major League Baseball. It should not be acceptable to allow clubs to have a payroll that includes a majority of first year or entry salary level players. The player salaries and the player development portions of the "floor" should be separate figures. Since my requirement calls for the figure of the "floor" to be negotiated, it likely will not happen. Such a "floor" would mean that money is being spent on drafting and developing players. It would mean that sufficient dollars are being spent on payroll. Players wouldn't automatically be removed from a team by release or trade just because they are becoming too expensive or because they are in their "walk" (free agent eligibility) year. The mechanisms of such a "floor" could be managed and administered by the same trained financial personnel currently in place on most clubs. A realistic "salary floor" must account for seasoned veterans as well as younger players.

2) The first year player draft should have a fixed slotting salary system. An unproven player would be paid according to his draft position. Currently in America teachers are paid on a salary scale. Such a salary structure is fair to existing players and to the teams drafting an unproven commodity. Salaries in subsequent years would be negotiated by the players with their respective teams. There must be a place in baseball for rewarding performance. Such reward is currently watered down in the existing salary structure.

3) Guaranteed contracts in terms longer than 3 years should be prohibited. Much of the disparity in our existing salary structure stems from long term contracts that have proven unworthy. Yes, it should be a "buyer beware" business, but there are times baseball owners have to be protected from themselves. The case of the lengthy, guaranteed contract is one of those times. Such a limit on contract length does not mean a player's salary will be suppressed. If the player is worthy, another team can sign him following that three year deal. Or, his own team can re-sign him for up to another three years.

I make no mention of a salary "cap" because I believe a player should be able to earn as much as possible without constraint over the life of one's career. A fixed slotting salary system allows the player to begin a career in a lucrative industry that will pay for performance. All careers have injury issues-yes, even teachers. This provision does, indeed, help return baseball to paying for performance rather than one's potential or longevity in a career.

It is certainly not the players fault that their union has become among the strongest, if not the strongest in the world. In order to obtain that status, the Players Association had to be enabled in more than one way. Baseball went from total control of an individual's career to a complete constraint upon salary flexibility and any semblance of equity with salary arbitration. There has to be a moderate medium.

It is not free agency that has inflated player salaries. Rather, it is player's eligibility for arbitration that has caused inflation.
Arbitration eligible players are judged by comparable years of service compared to other players as well as performance.

The player movement we have just observed with so many minor league players being moved for major league talent is just the next step of a current waive in baseball. Teams are getting younger, bringing players up to the big leagues sooner and
shedding salaries of older players sooner than ever. That probably isn't what the Player's Association wants to happen, but it is a natural leveling of the financial playing field for mid to low market revenue teams.

These ideas are drastic in some people's eyes. However, I believe the sport is at a crossroads. Teams in low to mid market financial situations must have hope of playing in the post season. However, It isn't a salary cap that will get them there. But some creative changes to the salary structure certainly wouldn't help.

Those are my thoughts. I'd be interested in learning about yours. Comment below or email me at [email protected]