Brotha on Baseball

Don’t Fall For It

You may not know Marvin Miller, but he is one of the most important people in the history of baseball. It is unfortunate he was not given his rightful place in the Hall of Fame until after his death in 2012. He was the executive director of the Major League Baseball Players Association (MLBPA) from 1966 until 1982. He is one of the primary architects of the game as we know it. The elimination of the reserve clause, the beginning of free agency, and salary arbitration are all things which occurred during his time the MLBPA.

On the Dingers and K’s podcast last week we had a brief discussion about the initial salvo from MLB ownership in the coming labor negotiations. The simple version of their proposal was a $100 million salary floor combined with a $180 million competitive tax threshold (CBT). The CBT is effectively a salary cap. Major League Baseball is the major sports league in America without one. Americans love to say they are all for capitalism, except when it comes to their favorite teams. In the past 30 years, there have been 12 different franchises that have won the NBA title, 16 different Super Bowl winners, and 17 different World Series champions. This is to illustrate the point that having a salary cap has no bearing whatsoever on competitive balance within a given sports league.

I completely understand fans only want for their team to win. However, a lot of sports fans fail to view a major league baseball team as a workplace environment. Hence the term professional sports. The players naturally want to win, but playing baseball is their job. This means from a business perspective; they are the workers. Meaning they are the same as your local plumber, or warehouse worker. Yes, they earn more money than an average employee, but they are employees, nonetheless. Given the salary cap proposal from the ownership side of the equation, I wonder how many of these same fans would be willing to work for an employer who arbitrarily places a limit on how much their employees can earn.
A salary cap in sports is only designed to guarantee profits for the team owners by limiting the cost of labor (the players). The current NBA salary cap is $112.414 (a hard cap of $143.002) million dollars, the NFL salary cap is $182.5 million dollars. The competitive balance threshold for major league baseball is $210 million. Teams are taxed on the amount they over the tax threshold. The Los Angeles Dodgers are the owners of the largest tax bill, coming in at a $17,217,068 according to Sport Trac. Salary caps are tied to revenues. Owners agree to pay the players a percentage of the league revenue. This is where it gets dicey for players. One must question the incentive of the ownership side to be honest with labor when it comes to this equation.

Team owners in baseball love to cry poor. They have yet to ever have anyone independently audit their books. They are very good a hiding revenue. The hot thing going around in baseball ownership circles is rise of betting. The Chicago Cubs and Washington Nationals recently announced plans for sport books to be in the vicinity of their home ballparks. The clubs have been more than a little opaque when it comes to stating if the revenue from the gaming establishments will be considered baseball-related revenue, or not. It takes a special brand of logic to not see betting on a baseball game in a gaming house connected to the team as not baseball-related revenue. If there is no baseball game, then there isn’t anything to bet on.
Baseball teams are owned by billionaires who can afford to pay the players the millions they earn. Baseball owners are each successful businesspeople, who have the means to purchase their ballclub. If a baseball team is such a losing proposition, they would simply sell the asset, as it is a drain on the rest of their portfolio. For a lot of owners, a salary cap sounds great as it can provide cover for being cheap. The owner can say “I wanted to keep the player, but we could not afford him”, or “The player takes up too much of the salary cap, so we could not put a decent team around him”. In a baseball world with a salary cap I can see Los Angeles Angels owner Arte Moreno coming up with those excuses when talking about Shohei Ohtani or Mike Trout when the day comes for them to find a new place to ply their trade. We have heard these tropes from whichever NFL or NBA executive has seen their star player walk out of the door.

The whole salary cap charade is based upon the fallacy of ownership being focused upon winning. The fans see the players a greedy when they leave for another opportunity, when most of the time it is the same decision any average person would when confronted with the same choice. No one says the owner is greedy for putting profits over winning. The owner feels that extra $10 million is better in his pocket, rather than being spent on that extra starting pitcher. It is a business to the owners, plain and simple. Fans need to treat their favorite team like they would any other company. Fans buy the tickets, jerseys, hot dogs, and watch on television. They have a right to be treated like the paying customers they are. If the service is lousy, so if the team is bad in this case, the ownership should not be given an assurance they will turn a profit based of revenue sharing. The onus needs to be on the team to win. There is the story of Project Wolverine, whereby Derek Jeter was telling potential investors they would see a return. These returns were going to be based on the fact the Miami Marlins would run a very low payroll while receiving revenue sharing. Why should the Los Angeles Dodgers, who are trying to win, be subsidizing the Marlins, who want to turn a profit while leaving to be incidental?

Don’t fall for it fans. The league ownership is using the national baseball media to leak proposals because negotiating in the media works better for them. They will float ideas a trial balloons in order to determine the public sentiment on an issue. Don’t think of baseball players as millionaires, but as labor, and a lot the shenanigans from the ownership side becomes obvious. Feel free to boo a guy for striking out with the bases loaded, but don’t say he is greedy or ungrateful when he makes a business decision any of us would.

Leave a Reply

%d bloggers like this: