Time for a salary cap?

added 1/22/2009 by Scott Barzilla

I remember parts of 1995 as if they were yesterday. I remember going to a replacement game at the Ballpark in Arlington. That's wasn't a fun day. Yet, I also remember having seats right behind the Astros dugout in their exhibition game against the Rangers later on that spring. In particular, I remember seeing pinch hitter and utility infielder Dave Magadan in an Astros uniform.

For those in the younger audience, Magadan burst on the scene as one of those "Future Stars" you got on Topps baseball cards in the 1980s. He was a glorified singles hitter that played first and third base. Naturally, unless you hit .350, you aren't going to make it as a singles hitter at first. So, Magadan settled down as a good utility infielder for those two positions. While he never hit .350, you could count on him to hit around .300. He became of victim of the 1994 work stoppage.

Fastforward fourteen years and you see the same thing happening. Except, now you have guys better than Dave Magadan still waiting around for employment. Middle market teams are scraping up their nickels and dimes to fill out their bench while the Yankees get the top three free agents of the off-season. A lot of fans are crying foul, but this has been going on for years. Still, it doesn't change the fact that many fans are crying for a salary cap. The odds are long and the issues intricate, but it does deserve some form of conversation.

The owners talked about it before, but the union never bought in. The luxury tax eventually became the best compromise. So, now the Yankees spend an extra chunk of money beyond the 200 plus million they spend on salaries. The luxury tax obviously doesn't deter them and it can be argued that the recipients aren't using it the help their ballclubs either. So, some within management are arguing for a salary cap and salary floor. The proposal has the added benefit of at least being more palatable to the union.

The proposal is not that outrageous considering that the NFL and NBA use this structure as well. The problem is that baseball works differently than football and basketball. Player development is much more important and there are folks that argue that the weaker teams may be spending their money there. You can certainly argue that the Florida Marlins, Minnesota Twins, and Tampa Bay Rays are benefitting from their investment in the farm system. Forcing them to increase their payroll may actually make them worse instead of getting better because it may defray money away from player development.

Of course, the additional dilemma is that many of the small market teams struggle to get free agents to go their way. So, they will have to overpay mediocre players to reach the salary floor. While this concern is legitimate, it will likely be temporary as traditional losers in the NBA and NFL have found out.

For the union the question is really quite simple. Do you service the superstars or the rank and file? The NFL and NBA players have managed to negotiate a certain percentage of revenues to be allocated for the cap. I'm sure the union can do the same and so they will get their salary growth. The problem for them is that it will ultimately restrict the higher end contracts. If the cap is 150 million (let's say) then the Yankees cannot afford to sign 20 million per year players at will.

Yet, if you install a floor (say 50 million) then you will actually see the total amount of money spent on players rise. So, while the superstars won't see the spiraling salaries, the middle class will actually benefit. So, who's in charge of Donald Fehr? Is it Alex Rodriguez or Wandy Rodriguez? It's easy to say Arod, but there are a lot more Wandy's out there than Arods.

Whether they know it or not, the players have it worse this off-season than they would under such a plan. Currently, you still have a handful of organizations that spend well under 50 million, but only the Yankees are spending on top. So, you have a large group of high profile free agents that will go from baseball's best (in terms of salaries) to the middle class. The middle class may have to settle for veteran minimums or non roster invitations. Whether it's collusion or not, it's really helping the owners. If the players go through a similar off-season in 2010 then you might see some say yes to a salary cap if it includes a salary floor.