Not surprising, the MLB has been in a death spiral for decades. Their problems are entirely political. Two teams (and I don't know why this article mentions the Dodgers, they're not even in the top 10 in terms of revenue) make the majority of the sport's money, and even among them one is far larger than the other. The entire sport revolves around the Yankees and, to a lesser extent, the Red Sox.
Those teams' considerations are given undue weight when determining league policy and have been for what in the sports world would be considered an eternity. This has led to a league designed to keep the Yankees winning and the Sox picking up their crumbs, which might seem great to the 25% of baseball fans who love one of those teams but alienates the rest.
Pittsburgh may be gaining $39m a year from revenue sharing, but they're losing a ton compared to what they'd make in a well-run league. If the MLB really believed that a rising tide lifts all boats they'd implement a salary cap and be done with it. The cap (along with revenue sharing) is the biggest reason for the NFL's parity, which in turn has driven the league's success. Whoever your favorite NFL team is, there's a very good chance they've been Super Bowl contenders in your lifetime. Most baseball fans cannot experience this.
For whatever reason, maybe because it was the scrappy upstart and it had to outfox it's larger competitor, the NFL owners have come together in a way that no other sport has to dethrone America's former pastime. If the MLB wishes to compete going forward they're simply going to have to adapt their business practices to align the incentives of the team owners (making money) with that of the fans (winning) and there's no proven way to do this other than a salary cap.
That does seem like a direction to go that might work, but I'm not sure it's the only possible way to run a successful league. That's essentially the "socialist" way of running a league, from the perspective of the league itself as an ecosystem: central planning, redistribution of income, limits on competition between teams (mainly on salary competition). The goal is to make an egalitarian society of teams where everyone has an equal playing field, unsullied by capitalist considerations, and nobody can "buy" success due to being richer, because that's more interesting for fans.
Europe's soccer leagues have gone in the exact opposite, hypercapitalist direction, though, where teams bid huge amounts for players, compete vigorously for media contracts, any tycoon can pour as much of their own money as they want into a team (just like, in the US, they can pour money into election campaigns and whatnot), and so on. In some leagues, teams can actually even "fail" if they fail to compete well enough (in the sporting sense), being relegated to lower leagues if they don't win enough, and replaced by the top teams from the lower leagues, who get to move up. That model also seems massively successful as a sport.
Well, I can't say it's the only possible solution, but of the many that have been tried, it's the one that works best, and it's the sole reason the NFL has achieved such dominance.
Socialism works great for small groups, such as 32 team owners. FWIW, NFL teams don't share all revenue. They still compete on ticket and merchandise sales. They also get bonuses for winning. Some teams profit much more than others, so it's still very capitalist.
In the end what the NFL realized that the MLB didn't (and the NBA did but couldn't enforce for political reasons) is that what fans love is parity. A league with parity will eventually eclipse one without, every time.
Parity only comes from a salary cap. Otherwise the teams that make the most (without true socialism, some teams will always have far more revenue than others) will simply buy the best players, as the Yankees do, leading to a self-perpetuating dynasty.
You might be able to get there with incentive structures instead, allocating large enough amounts of money to winning teams and fining perpetually losing teams, but I'm always leery of that as incentives can be gamed. A salary cap is quick, easy, effective, and unless a team flagrantly violates it by funneling money to a player under the table (which is rare since not many NFL owners want to risk their ownership) totally enforced.
@mattmaroon a salary cap has worked in football, but the CBAs and relative strengths of players unions are very different between the sports. It wouldn't work in baseball (read my post above).
Worth repeating the Gammons quote: "In those 30 years, 20 different teams have won World Series titles, and it would likely be 21 without the 1994 strike that cost the sport’s best team -- the Montreal Expos -- a chance to win it all. In those 30 years, 14 different teams have won the Super Bowl, 13 have won the Stanley Cup, nine have won the NBA championship."
The same is probably true of 'soccer', especiall the English Premier League which is essentially a tower of debt at the upper end because only more borrowing (or billionaires buying clubs) can support the titles and growth that helps service the existing debt.
Of course, the EPL situation is made more complicated by the divisions and relegation possibility. There are probably plenty of fans - especially outside the big 4 - who would be happy to cycle through the top and bottom of the Premier League, but a cycle of relegation is not attractive. In fact, I wonder how a salary cap could be managed across different divisions, although it would probably still be better than the same clubs bouncing up and down most years.
The top Premier League clubs have low interest loans from their owners, like Manchester City or Chelsea, or they have debt brought on by the owners to cover acquisition costs. It's harder at the bottom, clubs like Fulham or Stoke have low incomes. Here's a link with more details:
http://www.independent.co.uk/sport/football/premier-league/t...
La Liga top clubs, Barcelona and Real Madrid have huge amounts of debt and keep on borrowing money every year for their shopping sprees.
Relegation makes a big difference because it means that aiming to minimise spending is not a viable strategy; the potential to be profitably run in lower divisions is much lower. Likewise, because the debts incurred by risky spending to try and beat the top teams (all with huge global merchandising incomes or a sugar daddy) also have resulted in financial crises, you have the curious outcome of most of the division aiming to be somewhere in mid-table.
Death spiral? MLB revenue was $6.6 billion in 2009. It was $7.6 for the NFL. According to this (outdated) article, MLB was actually growing sales at a better rate than the NFL over the past decade or so: http://money.cnn.com/2007/10/25/commentary/sportsbiz/index.h...
The recession seems to have hit both leagues pretty hard.
The MLBPA is the strongest union in professional sports, and there's no way that they'll allow a salary cap. After what happened with the last player's strike, I don't think the owners would be willing to take another strike.
The MLB still has some competitive balance issues, but they're getting better. And I'd bet that a perfectly competitive league would actually generate less revenue than a league with a team like the Yankees. You have to give it to them, they fill up the house wherever they go.
The NFL takes 12 out of 32 teams (0.375) to the playoffs, versus the 8 out of 30 (0.267) the MLB carries. That's already four more potential slots for a playoff team, including one more wildcard per league.
Yes, the Yankees have gone to far and away more World Series competitions and acquired more titles than any other team. They're also, historically (and I'm talking a history that spans a time greater than the entire NFL), the most competitive and storied team in baseball. That means talent and money naturally flow to it.
I would also point out that, since 2000, the Giants, Diamondbacks, Red Sox, White Sox, Rockies, Cardinals, Rays, Tigers, Angels, Mets, and Phillies have all gone to the World Series in addition to the Yanks. This year, the Twins, Giants, Reds, and Rangers(!!) are all expected to make the postseason with minimal difficulty. There is competitive balance, and introducing the shenanigans of a salary cap isn't the way to go in my opinion.
Giants I wouldn't be so sure about. They don't even HOLD the wild card right now. Plus the Rockies are surging in one of their wonderful late season runs.
The NBA has a salary cap but that hasn't stopped a handful of teams from dominating while the others see a 2-year spurt of success followed by a drop into mediocrity.
A large part of the problem in the NBA is that most team managers do a crappy job of building a team (and the fact that expansion has diluted the talent pool).
The only teams that see continuous success are those that either have stellar management or have a huge market + a management unit that doesn't actively shoot themselves in the foot.
A salary cap is a good start but it won't be enough. Cheap team owners like those the Pirates have will always be reluctant to shell out money in order to advance the team.
guaranteed contracts (which is magnified by poor management). A team can be crippled for 5 years by a bad contract, something that cant happen in other leagues. The talent pool isn't the issue. The talent has gotten better over the years.
The talent pool isn't the issue. The talent has gotten better over the years.
I meant dilution of talent caused by league expansion. There are more teams now and so, the chance of each team loading up with multiple good players becomes smaller.
(A certain South-Florida based team not withstanding)
I agree with guaranteed contracts. It's harmful to the team, especially when the team is run by numbskulls.
Well I believe the purpose of the softcap was (at least partially) to allow players to stay with a single team. I'm not sure how well it works though. Is player migration because of salary an issue in the NFL/NHL?
To obtain parity you want players moving to obtain higher salaries. That's how it works in the NFL to a large extent. It's why it's hard for a team to remain dominant for more than a few years, and why there's nobody doing there what the Lakers are now doing in the NBA.
Now that we've dismissed the economic concerns, let's look at the other stuff.
Parity: baseball has much more parity than any of the other major sports in the USA. From a Peter Gammons article in 2009:
"In those 30 years, 20 different teams have won World Series titles, and it would likely be 21 without the 1994 strike that cost the sport’s best team -- the Montreal Expos -- a chance to win it all. In those 30 years, 14 different teams have won the Super Bowl, 13 have won the Stanley Cup, nine have won the NBA championship."
Yes, the Yankees recent dominance is tiresome to everyone who doesn't worship satan. But the Mets aren't exactly doing well, even with #2 revenue numbers.
Finally, you simply state that baseball should implement a salary cap, like it's easy to do. The MLB players association is one of the strongest unions in the world. There's no way they could implement a cap. And, as a rabid consumer of advanced baseball analysis, I don't think the evidence suggests that they should.
I'm sorry if my reply seems harsh -- I'm not venting at you. Rather, I'm venting at ESPN and nearly every sportscaster that seems to have 3 very incorrect presumptions: 1) baseball is in decline because 2) there's no parity and 3) no salary cap.
The only way to fix this is for Pirates fans to stop going to the game. As a Pittsburgh fan and living there for a summer I am pretty confident in saying Pittsburgher's will never quit going.
Only tangentially related, but should be of interest to most HNers:
If you haven't read _Money Ball_ (http://tinyurl.com/28ryy4b) you really should. It's the story of how a coach and a stats guy hacked major league baseball; they took one of the poorest, losing-est teams in the league (Oakland A's) and turned them into serious winners. I found it well written, informative, and quite a pageturner...and I don't even /like/ baseball.
Not serious winners, marginal winners. IE they made the playoffs every year and got promptly defeated. There's a big difference.
While every hacker loves to believe that scrappy upstarts with data will conquer the good old boys every time, the reality of baseball seems to be the opposite. Sabermetrics just hasn't delivered. (It was a great book though).
22 comments
[ 6.2 ms ] story [ 70.5 ms ] threadThose teams' considerations are given undue weight when determining league policy and have been for what in the sports world would be considered an eternity. This has led to a league designed to keep the Yankees winning and the Sox picking up their crumbs, which might seem great to the 25% of baseball fans who love one of those teams but alienates the rest.
Pittsburgh may be gaining $39m a year from revenue sharing, but they're losing a ton compared to what they'd make in a well-run league. If the MLB really believed that a rising tide lifts all boats they'd implement a salary cap and be done with it. The cap (along with revenue sharing) is the biggest reason for the NFL's parity, which in turn has driven the league's success. Whoever your favorite NFL team is, there's a very good chance they've been Super Bowl contenders in your lifetime. Most baseball fans cannot experience this.
For whatever reason, maybe because it was the scrappy upstart and it had to outfox it's larger competitor, the NFL owners have come together in a way that no other sport has to dethrone America's former pastime. If the MLB wishes to compete going forward they're simply going to have to adapt their business practices to align the incentives of the team owners (making money) with that of the fans (winning) and there's no proven way to do this other than a salary cap.
Europe's soccer leagues have gone in the exact opposite, hypercapitalist direction, though, where teams bid huge amounts for players, compete vigorously for media contracts, any tycoon can pour as much of their own money as they want into a team (just like, in the US, they can pour money into election campaigns and whatnot), and so on. In some leagues, teams can actually even "fail" if they fail to compete well enough (in the sporting sense), being relegated to lower leagues if they don't win enough, and replaced by the top teams from the lower leagues, who get to move up. That model also seems massively successful as a sport.
Socialism works great for small groups, such as 32 team owners. FWIW, NFL teams don't share all revenue. They still compete on ticket and merchandise sales. They also get bonuses for winning. Some teams profit much more than others, so it's still very capitalist.
In the end what the NFL realized that the MLB didn't (and the NBA did but couldn't enforce for political reasons) is that what fans love is parity. A league with parity will eventually eclipse one without, every time.
Parity only comes from a salary cap. Otherwise the teams that make the most (without true socialism, some teams will always have far more revenue than others) will simply buy the best players, as the Yankees do, leading to a self-perpetuating dynasty.
You might be able to get there with incentive structures instead, allocating large enough amounts of money to winning teams and fining perpetually losing teams, but I'm always leery of that as incentives can be gamed. A salary cap is quick, easy, effective, and unless a team flagrantly violates it by funneling money to a player under the table (which is rare since not many NFL owners want to risk their ownership) totally enforced.
Worth repeating the Gammons quote: "In those 30 years, 20 different teams have won World Series titles, and it would likely be 21 without the 1994 strike that cost the sport’s best team -- the Montreal Expos -- a chance to win it all. In those 30 years, 14 different teams have won the Super Bowl, 13 have won the Stanley Cup, nine have won the NBA championship."
Of course, the EPL situation is made more complicated by the divisions and relegation possibility. There are probably plenty of fans - especially outside the big 4 - who would be happy to cycle through the top and bottom of the Premier League, but a cycle of relegation is not attractive. In fact, I wonder how a salary cap could be managed across different divisions, although it would probably still be better than the same clubs bouncing up and down most years.
La Liga top clubs, Barcelona and Real Madrid have huge amounts of debt and keep on borrowing money every year for their shopping sprees.
The recession seems to have hit both leagues pretty hard.
The MLBPA is the strongest union in professional sports, and there's no way that they'll allow a salary cap. After what happened with the last player's strike, I don't think the owners would be willing to take another strike.
The MLB still has some competitive balance issues, but they're getting better. And I'd bet that a perfectly competitive league would actually generate less revenue than a league with a team like the Yankees. You have to give it to them, they fill up the house wherever they go.
Yes, the Yankees have gone to far and away more World Series competitions and acquired more titles than any other team. They're also, historically (and I'm talking a history that spans a time greater than the entire NFL), the most competitive and storied team in baseball. That means talent and money naturally flow to it.
I would also point out that, since 2000, the Giants, Diamondbacks, Red Sox, White Sox, Rockies, Cardinals, Rays, Tigers, Angels, Mets, and Phillies have all gone to the World Series in addition to the Yanks. This year, the Twins, Giants, Reds, and Rangers(!!) are all expected to make the postseason with minimal difficulty. There is competitive balance, and introducing the shenanigans of a salary cap isn't the way to go in my opinion.
A large part of the problem in the NBA is that most team managers do a crappy job of building a team (and the fact that expansion has diluted the talent pool).
The only teams that see continuous success are those that either have stellar management or have a huge market + a management unit that doesn't actively shoot themselves in the foot.
A salary cap is a good start but it won't be enough. Cheap team owners like those the Pirates have will always be reluctant to shell out money in order to advance the team.
guaranteed contracts (which is magnified by poor management). A team can be crippled for 5 years by a bad contract, something that cant happen in other leagues. The talent pool isn't the issue. The talent has gotten better over the years.
I meant dilution of talent caused by league expansion. There are more teams now and so, the chance of each team loading up with multiple good players becomes smaller. (A certain South-Florida based team not withstanding)
I agree with guaranteed contracts. It's harmful to the team, especially when the team is run by numbskulls.
1) MLB has been increasingly profitable for 10+ years now. Economically, there is nothing wrong with the game.
2) The Dodgers are 4th in club value, and 4th in revenue. Not sure where your numbers are from. http://www.forbes.com/lists/2010/33/baseball-valuations-10_T...
Now that we've dismissed the economic concerns, let's look at the other stuff.
Parity: baseball has much more parity than any of the other major sports in the USA. From a Peter Gammons article in 2009: "In those 30 years, 20 different teams have won World Series titles, and it would likely be 21 without the 1994 strike that cost the sport’s best team -- the Montreal Expos -- a chance to win it all. In those 30 years, 14 different teams have won the Super Bowl, 13 have won the Stanley Cup, nine have won the NBA championship."
Yes, the Yankees recent dominance is tiresome to everyone who doesn't worship satan. But the Mets aren't exactly doing well, even with #2 revenue numbers.
Finally, you simply state that baseball should implement a salary cap, like it's easy to do. The MLB players association is one of the strongest unions in the world. There's no way they could implement a cap. And, as a rabid consumer of advanced baseball analysis, I don't think the evidence suggests that they should.
I'm sorry if my reply seems harsh -- I'm not venting at you. Rather, I'm venting at ESPN and nearly every sportscaster that seems to have 3 very incorrect presumptions: 1) baseball is in decline because 2) there's no parity and 3) no salary cap.
All three are dead wrong.
If you haven't read _Money Ball_ (http://tinyurl.com/28ryy4b) you really should. It's the story of how a coach and a stats guy hacked major league baseball; they took one of the poorest, losing-est teams in the league (Oakland A's) and turned them into serious winners. I found it well written, informative, and quite a pageturner...and I don't even /like/ baseball.
While every hacker loves to believe that scrappy upstarts with data will conquer the good old boys every time, the reality of baseball seems to be the opposite. Sabermetrics just hasn't delivered. (It was a great book though).
http://www.sabernomics.com/sabernomics/index.php/2010/08/rev...