At 2:08 PM Eastern time on Monday, news broke that all-star first baseman Matt Olson was going to be traded from the Oakland Athletics to the Atlanta Braves, despite being under team control for the next two seasons. Less than two hours later, all-star outfielder Jesse Winker was traded from the Cincinnati Reds to the Seattle Mariners, once again with two years of team control remaining. Both Oakland and Cincinnati were competitive ballclubs in 2021, as both teams finished above .500 and less than 10 games out from a wild card spot. But, the small-market teams did not want to pay their star players and they were shopped off to teams that were willing to spend to contend.
Baseball has always been a sport dictated by the big spending of dominant big-market franchises. In the late 1990s and early 2000s, the Yankees outspent other teams, aiding in their dominance on the field. In more recent years, the Dodgers have flexed their financial might in maintaining the league’s highest payroll and consistently advancing to late rounds of the postseason.
Yet, there have also always been small-market franchises that choose not to pay star players, and allow big-market franchises to use their money to allure these players to their team. As evidenced by the Olson trade, the Oakland A’s are one of these teams. In 2014, the A’s traded Josh Donaldson coming off an all-star season because he was due for a raise in arbitration. The next season, Donaldson won MVP. Last year, the A’s chose not to re-sign Marcus Semien, and he finished third in MVP voting in the 2021 season.
Now, one might assume that the A’s are forced to give away their star players because they simply cannot afford to keep them. That is not necessarily true. While the A’s do bring in less revenue than other baseball teams, owner John Fischer maintains a net worth of $2.6 billion. His net worth has not led to spending, as the team consistently ranks in the bottom-10 in team payroll and still maintains a payroll under $100 million. By claiming the team is too poor to spend, Fischer can maintain a profitable business venture while fan interest and team success suffers. When Fischer bought the A’s, they were worth $180 million. Now, they are worth $1.1 billion, even though Fischer has barely invested in the success of the franchise.
The irony in all of this is that the A’s are seen as a franchise at a disadvantage compared to the rest of the league, and an entire film was made dedicated to their savvy spending in the face of this unfair situation. Contrary to what Moneyball suggests, the A’s and other small-market teams can often afford to spend, but their owners choose not to.
Forcing Teams to Spend
In a sport with no salary cap, it may seem silly that teams need incentives to spend. Yet, since baseball franchises are often profitable for owners regardless of whether the franchise has success, some owners choose to spend frugally, maintain a low payroll, and profit, even if their team is consistently missing the playoffs. Owners want their franchises to have success, as that will increase the value of the franchise and bring more revenue. But, as franchises like the A’s and Rays have managed to have success with lower payrolls, owners do not always see spending as a necessary component to ensuring their teams have success.
Unfortunately, after a three-month-long lockout, there are still limited incentives for owners to spend in the new Collective Bargaining Agreement. The only anti-tanking measures put into place were a draft lottery, but only the bottom-6 teams are expected to be included in this lottery, so the worst teams are still guaranteed a top-6 pick.
The simple solution to this problem that was missed was the implementation of a salary floor or a minimum salary that teams are required to reach each year. By making owners spend a minimum amount of money on their teams, owners that are not willing to spend on their teams will be forced to sell. The inclusion of potential tax penalties for teams failing to meet this floor would also be a strong incentive, as owners would be forced to pay more money by not spending than they would be handing out contracts.
In August, a salary floor was proposed by MLB. However, the floor was set at a minimum of $100 million, and the proposal also included a reduction in the luxury tax threshold to $180 million from $210 million. Given the way the luxury threshold acts as a cap on spending for many owners, it was obvious that the players could not accept this proposal. Despite this, given the fact that players were able to negotiate for a $20 million increase in the luxury tax in the new CBA, they likely could have gotten rid of or lessened the reduction in the luxury tax during negotiations.
Regardless, if the first few days of free agency after the lockout are any indication, the next five years will create even more small-market teams choosing not to spend on their rosters. The Cincinnati Reds and Oakland Athletics should both be trying to build off of near playoff appearances, and instead, they are trading franchise stars to cut payroll. That spells consequence for the league since teams will still attempt to tank and win with low payrolls. It is bad for the players, as numerous teams will still be unwilling to hand out large contracts. Most of all, it is unfair for the fans of small-market teams, who deserve to see their teams doing everything they can to win a World Series championship.
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