Every once in a while I get these ideas that I just know are great. But I am nearly always powerless to enact them. During the past offseason I knew that Orlando Hudson would be a perfect fit for the Twins and could be had for below market value. But I had no means to contact Bill Smith, the Twins GM and, as far as I know, no one had handed over the reins of baseball’s finest franchise to me. Well, Hudson ended up signing late in the free agency period for a base salary of $3.4 million. And the Twins ended up getting the worst offensive production out of their second baseman – and number two hitters – out of any team in the league. The Twins could have had a Gold Glove second baseman and a professional hitter for less than Nick Punto and his AAA talent will make per year for the next two years!
I’ve had some other brilliant ideas as well, but since we don’t have the time or space to print them here, I’ll just share one.
It’s tough to compare the collective bargaining agreements in different sports. They all have strong points and they all have weak points. But there’s something we have to acknowledge: the NFL has it figured out in regards to competition. I know there are still owners who have complaints, namely Ralph Wilson, but it’s apparent that teams from any NFL market can compete for a title with two things: a good personnel guy, and a good coach.
Let’s contrast that model with the one in Major League Baseball. MLB has very soft cappish mechanism that imposes luxury tax at a certain level. This level is completely ignored by teams that play in New York, LA, Chicago, and Boston. In fact, the New York Yankees ignore it to such a degree that over the past offseason they signed not the single best free agent, not the top two, but three of the top deals done over the offseason - CC Sabathia (7 years, $161 mil), A.J. Burnett (5 years, $82.5 mil), and Mark Teixiera (8 years, $180 mil). Any other team would see any one of these contracts as a once in a generation deal.
But this is business as usual for the Yankees who are responsible for the highest single-season salary: the prorated $28 mil Roger Clemens received for his performance-enhanced 2007 effort. This was just one offseason after they signed Alex Rodriguez to a contract that entitled him to $275 million over 10 years, ownership of the Statue of Liberty, and the first right of refusal of the virginity of most of the females in the greater New York City area.
And they don’t have to make the tough decisions other big market teams have to make. A few years back the Phillies felt that they couldn’t handle Bob Abreu’s contract so they unloaded him to - who else - the Yankees. Although I could continue for several pages about the massive contracts they’ve thrown at free agents both failed and successful, I don’t want to turn this into a diatribe about the failure of Brian Cashman, the appropriately named Yankees General Manager. The point is that, for a host of reasons, the Yankees not only able to hang onto their own free agents whenever they want, they’re nearly always able to sign whomever they like during the offseason.
Let me stop here and acknowledge that a competitive Yankees team is good for baseball. The resurgence of the Yankees in the mid 90s coincides with the rise of baseball in general (some might attribute the rise to the rise in the use of PEDs, but that’s not the whole story). But I don’t believe that baseball is only well-served when we see matchups like Yanks-Red Sox, Dodgers-Phillies, or Mets-Cubs. Baseball is better served and more fun to watch when teams from any market have a chance at a championship at least once a decade. Of course front office ineptitude, and yes I’m talking about the Lions and the Raiders, can keep a team out of contention for a long time.
What I’m suggesting is that baseball needs to look to the NFL for guidance in how to achieve this. Fans in Kansas City, Pittsburgh, and Cincinnati need to know that they’re a good GM away from the playoffs. And once they make the playoffs, they shouldn’t have to sell off their best players for prospects and hope to compete again in ten years.
So, besides my lack of power and influence, what is the biggest impediment to this sort of reform? The union ,of course. The idea of setting a maximum amount of money for a team to spend is anathema to union types. It’s just not part of the way they do business. Unions don’t like compromise – especially when money continues to roll in as it is now. Their inability to make concessions contributed to the fall of the American steel industry and they’re seemingly hell-bent on doing the same to the American auto industry. It’s not a criticism of the unions. It’s just not what they do. They’re out for their workers, not the industry in general.
This is where the utterly brilliant part comes in. They need not make concessions. What makes the NFL’s CBA work is that although they have a salary cap, they also have a floor of what teams must spend. This keeps small market teams from accepting tens of millions in revenue sharing while spending next to nothing on players.
So what I’m suggesting is a soft cap that allows big market teams to spend whatever they choose to spend, but penalizes them in the form of a luxury tax that goes to small market teams in the form of revenue sharing. But the small market teams should be required to spend a minimum that’s much higher than what they’re currently spending. If they choose not to, they should forfeit the revenue sharing money that would come their way. This way the total amount of money spent on players actually goes up. What changes is the wide differential between what small market teams spend and what big market teams spend. The Yankees are currently spending roughly 5.5 times what the team with the smallest payroll is spending. No one can look at this number and say there isn’t something seriously wrong with this. Even a 2:1 proportion would be far healthier than what we have going on right now.
Under this plan, everyone wins. The players win (more $$), the union wins (more $$, stronger game), the fans win (hope). Well, I guess not everyone. Although spending on players has gone up steadily, the dirty secret is that the owners are now making more than ever. This plan would force tight-fisted, small market owners to spend more by mandate. And middle market, tight-fisted owners would spend more because they would know that they’re oh-so-close to contention and would make an extra signing if it would mean a championship.
So wouldn’t it be easy to get the union on board with a plan that would wrench more money away from the owners? One would think. But who knows. I don’t have any more time to think about this right now. I have to feed the unicorn and have a few drinks with my leprechaun before bed.
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Great post.
ReplyDeleteLOL on the terms of A-Rod's contract.
Interesting post; some intriguting stuff.
ReplyDeleteI do wonder if the recession hitting sports the way it has creates the room for a more creative "grand compromise" with players and owners trying to look at such "win-win" situations. More on my own theory on that below.
I feel like I have to note U.S. auto workers average less in hourly wages than most of their European counterparts, so I'm not sure that criticism is fair, though it doesn't have much to do with sports, either. They already have taken a lot of concessions, including reducing wages greatly for new hires and reducing various benefits for everyone. I think U.S. auto companies have to put out compelling products and they have an unfair disadavantage on paying health care costs that are nationalized in other countries.
As probably the only person who has negotiated union contracts on this blog, I haven't found my union experience that useful to the sports world in thinking of these plans. There really isn't a lot of parallel between negotiations in sports (where players have indivdual salaries negotiated between agents and owners) and typical labor relations situations, where wages are set by the union contract. You can easily make the argument, if an owner is willing to pay a player more than they may be worth, why shouldn't they be allowed to?
Anyway, what do you think of the NBA system? It might be a little complex to summarize but its typically described as a weak cap system with lots of rooms for exceptions, especially for resigning players.
I think the NFL CBA is overly praised. I find it frustrating that there are almost never player for player trades in the NFL. The cap is so hard that it does limit the players earning ability. And it may not be sustainable if talk about 2011 is to be believed.
Finally, do you think it would be possible to create a system with a really heavy revenue sharing tax but no salary cap and a high floor? To me, that always sounded like the ideal compromise -- the union players get to keep the cap out, the owners who want to spend more are still allowed (but they pay a high penalty, so they better really want to win and do it in a sensible way), and the clubs who don't spend anything would be forced to.
Final thought is if a union wants to resist a salary cap in baseball they can make some decent statistical arguments -- for example, the Yankees won a higher percentage of World Series championships before the reserve clause (and high salaries) came about than after that date! And small market teams like the Marlins have been able to compete, though not as consistently. Also, they could say Internet revenue is shared, so revenue sharing over time will flatten out per team spending naturally. Not sure if those arguments feel very strong to a Pirates fan right now though.
In conclusion though, I also hope there is a creative compromise that avoids what I see as problems in the NFL and MLB extremes.
What all does the salary floor cover? Every suggestion that's ever been made has said a floor for the major league payroll. This, I am strongly against. When the Bucs need to rebuild with the kids, I want them to be able to pay as little as they want. I don't want them to have to sign Jeromy Burnitz for $7million a year because the floor dictates they have to.
ReplyDeleteIf a salary floor took into account things like international scouting and signings, player development, and the MLB Draft, I would be much more inclined to support it. However, I also don't want to encourage other teams to spend more money doing this; it's an inefficiency in the system that small market clubs like the Bucs and Twins can exploit.
I feel, as a small market fan, that all my team needs is a good GM to make the playoffs. Our former GM ravaged the minor league system so much that Bucs fans need patience, but after the past two drafts and a third next year, we should start seeing real talent pass through the 'burgh. Having a GM who is allowed to ruin the feeder system for 10 years is really a detriment to winning.
The problem with the NFL system is that there are 32 individual egos and many of these guys are greedy. Jerry Jones is looking for every single way to brand the Cowboys in a way that doesn't require him to pay into the revenue sharing pot. Because of his area, he has more opportunity than someone like Ralph Wilson in Buffalo (which is why he felt forced to make a deal with Toronto). The NFL financial system is becoming more and more like baseball, with the gaps between the "haves" and "have nots" growing to a great degree.
Honestly, and people think I'm crazy when I say this, but I think baseball's economic system is the most fair and most reasonable. In fact, I would support getting rid of revenue sharing, because it actually can be disincentive for a team to win, if they are still making money, which a team like the Bucs have done for years.
Good comments all around. So much to address. I'll try to address Chris George first.
ReplyDeleteThe biggest thing I want to say is that it was tough for me to lay out my entire case in a post that was short and readable. If I write a paper on the subject, no one is going to read it.
It's tough to compare CBAs because there's so much to them. The NBA has a lot going for it. It has a great deal of trades during the offseason. But a majority of them (seemingly)are swaps of big, ugly guaranteed contracts. Teams spend years freeing up cap space with the hope of someday offering a maximum contract (or two) to one of the top free agents out there. It has its virtues but can be extremely frustrating.
I don't mean to set up the NFL as the be-all end-all of CBAs. There are obvious flaws, but they do have it figured out regarding parity.
Chris, your suggestion of no cap with extreme revenue sharing is a good idea, but would the big markets really sign on to that?
As far as the recession hitting sports, I don't have access to total revenue figures, but the secret nobody really seems to know - because nobody is covering it - is that attendance is actually up in baseball. I know there is revenue coming from many sources that may be down (corporate sponsors, luxury boxes, merchandise, concessions) but attendance and overall enthusiasm is up so I don't think the union sees any need to find a new way.
This post wasn't meant as an anti-union screed. Unions have their goals, which are often contrary to the brand as a whole. They have their perspective and I have mine. I want to see good baseball, they want their players to get paid. I am just of the opinion that sometimes what appear to be concessions may actually be a boon to the players.
Josh, your concerns are valid and I actually considered them when I was writing this. I felt like I didn't have the room to clarify in the post.
ReplyDeleteObviously you can't have a straight up spending floor. That would lead to unnecessary spending that would hamper the efforts of small market teams to succeed. My suggestion would be that if a team chooses to spend less than the spending floor, they would forfeit any revenue sharing dollars they would otherwise have earned.
I would also suggest that signing bonuses count toward the spending floor. After all, the worse the team, the better the pick and thus, the more expensive the pick (see the eleventh-hour signing of Strasburg).
I hear what you're saying about the "disincentive to win" part. I would hope that the revenue sharing being dependent on meeting the spending floor would be an incentive to put a competitive team out there.
OK, now to address the statement:
"I feel, as a small market fan, that all my team needs is a good GM to make the playoffs."
This is true. We often use the Marlins as the paradigm case for this. But notice how narrow the window was for them. They had to make moves shipping out the expensive players (Pudge) and those who would be expensive soon (Beckett, Derek Lee,) and they lost others via free agency to teams that could pay more (Pavano, Burnett, Penny).
My point is this: the best case scenario for the Bucs is that a great deal of their prospects that they've been compiling pan out. But by the time they even reach arbitration, they'll have to pick and choose who they want to keep and who they'll have to trade for prospects. If they'll be as good as hoped, they'll command a huge amount of money, even if they're under team control.
Under the current system, the Bucs have the ability to make the playoffs once, maybe twice. But then they'll have to blow it up and start over. The Yankees are able to not only keep their in-house talent but they're able to poach players off of teams like the Bucs.
The Twins realized in the '06 offseason that they couldn't afford to keep Johan Santana. At the time he was asking for money that would equal roughly one third of the Twins roster.
Unfortunately, during the same offseason the Angels offered Torii Hunter the ungodly sum of $90 million to patrol CF for them.
The Twins have been able to stay competitive all decade but have not been able to:
1. keep their own talent
2. make that "one last move" they needed to put them over the top.
Both are frustrating and you'll find that out if things work out for the Pirates.
So the "one last move" has turned into the acquisition of this list of has beens:
Tony Batista, Bret Boone, Livan Hernandez, Rondell White, Jose Offerman, Ruben Sierra, Phil Nevin. It's a list so pitiful that I can't deal with the trauma of continuing.
It's frustrating being so close every year and being unable to add that final part.
There's no doubt in my mind that the Twins would have at least visited the World Series if they had been able to keep both Santana and Torii. If they had been able to add "that one last guy"...gee, who knows.
Josh, your concerns are valid and I actually considered them when I was writing this. I felt like I didn't have the room to clarify in the post.
ReplyDeleteObviously you can't have a straight up spending floor. That would lead to unnecessary spending that would hamper the efforts of small market teams to succeed. My suggestion would be that if a team chooses to spend less than the spending floor, they would forfeit any revenue sharing dollars they would otherwise have earned.
I would also suggest that signing bonuses count toward the spending floor. After all, the worse the team, the better the pick and thus, the more expensive the pick (see the eleventh-hour signing of Strasburg).
I hear what you're saying about the "disincentive to win" part. I would hope that the revenue sharing being dependent on meeting the spending floor would be an incentive to put a competitive team out there.
OK, now to address the statement:
"I feel, as a small market fan, that all my team needs is a good GM to make the playoffs."
This is true. We often use the Marlins as the paradigm case for this. But notice how narrow the window was for them. They had to make moves shipping out the expensive players (Pudge) and those who would be expensive soon (Beckett, Derek Lee,) and they lost others via free agency to teams that could pay more (Pavano, Burnett, Penny).
My point is this: the best case scenario for the Bucs is that a great deal of their prospects that they've been compiling pan out. But by the time they even reach arbitration, they'll have to pick and choose who they want to keep and who they'll have to trade for prospects. If they'll be as good as hoped, they'll command a huge amount of money, even if they're under team control.
Under the current system, the Bucs have the ability to make the playoffs once, maybe twice. But then they'll have to blow it up and start over. The Yankees are able to not only keep their in-house talent but they're able to poach players off of teams like the Bucs.
The Twins realized in the '06 offseason that they couldn't afford to keep Johan Santana. At the time he was asking for money that would equal roughly one third of the Twins roster.
Unfortunately, during the same offseason the Angels offered Torii Hunter the ungodly sum of $90 million to patrol CF for them.
The Twins have been able to stay competitive all decade but have not been able to:
1. keep their own talent
2. make that "one last move" they needed to put them over the top.
Both are frustrating and you'll find that out if things work out for the Pirates.
So the "one last move" has turned into the acquisition of this list of has beens:
Tony Batista, Bret Boone, Livan Hernandez, Rondell White, Jose Offerman, Ruben Sierra, Phil Nevin. It's a list so pitiful that I can't deal with the trauma of continuing.
It's frustrating being so close every year and being unable to add that final part.
There's no doubt in my mind that the Twins would have at least visited the World Series if they had been able to keep both Santana and Torii. If they had been able to add "that one last guy"...gee, who knows.