Steve Cohen bought the Mets in August 2020 with many owners unsure of what Cohen would do being one of the richest owners in Major League Baseball. In his second season as owner Cohen has spent some money, to say the least, this offseason. This upcoming season the Mets’ estimated payroll is 282 million dollars which right now ranks first in MLB. The next closest is the New York Yankees with a payroll of 230 million dollars. This is significant because it comes down to which owners are willing to pay and others that do not want to spend a dime.
The Current Salary System
The MLB is unique in how they handle its salary system. Leagues like the NBA, NFL, and NHL have hard cap systems that set a limit on how much every team can spend. The MLB has a luxury cap system that is set at 233 million dollars. If teams go over that set threshold, they will be taxed on how many millions of dollars they are over the threshold.
For teams like the Mets, this is not a significant tax because owners like Steve Cohen know that they will make that money back over time. That could be through his other business venture or through the team itself with ticket sales and other avenues. The problem comes with a team like the Milwaukee Brewers that has a good team but owners that do not want to come near the threshold number because of the tax. For a team like the Brewers if they go over that threshold that tax affects them more than an owner like Steve Cohen.
Because of this, the discrepancy between teams that are willing to spend big money on free agency to teams that stay back is becoming more significant than ever. Middle-market teams are being outspent significantly which has started to create a significant imbalance. A team like the Pittsburgh Pirates could have a lot of good young talent which results in them having a few years before their players hit the open market with teams willing to spend big money scooping them up. There should be a solution where middle-market teams could keep their young stars to make the league more competitive.
What Are Some Solutions?
Create a Hard Cap
A hard cap would be the first suggestion many people say to make so that there is more of a competitive balance within the league. By doing this teams would have a set spending limit that would help teams that are not willing to spend too much money in free agency. Also, doing this would allow players to get bigger contracts because teams would be less likely to give long ten-year deals to players.
The downside to having a hard cap is knowing where to set the hard cap limit. Getting a gauge on how much each player is paid on average makes it tricky to set a hard cap. For example, if each player had an average annual of 6 million dollars and there are 26 players on each roster the hard cap would be set to 156 million dollars which is low for any sports league.
Make a Minimum Spending
The next option is to set a minimum spending limit. Many owners look at their baseball team as a business and when fans are not coming through the door the play on the field becomes worse. One way to fix this would be to set a minimum spending limit for each team to reach along with a tax threshold.
As it stands the Orioles have the lowest payroll of 23 million dollars for this upcoming season. This is a significant amount less compared to teams that are in the middle of the pack. Setting a spending limit it opens other options for middle-of-the-road players to get contracts. But it also lets teams in the middle of the pack have a chance to get and resign players looking for bigger contracts. The downside to this method is how these thresholds would be determined. But that can be determined over time by using analytics on teams spending.
There is no perfect way to fix how owners spend their money in free agency. To some, the way it stands now is perfect with multiple teams getting the opportunity to compete each year. According to CBS, between championship appearances and winners the MLB has the most parity out of the four major sports leagues.
If I was the commissioner of baseball, I believe the best method would be to make a minimum spending limit with a maximum threshold. This is because baseball owners have the money to spend on their teams it is just a matter of pushing them a little bit too. A team like the Oakland Athletics trading away all their players and not spending any money on free agents is a terrible look for the league. This method would create more markets for players to go to and add more teams in the hunt for the playoffs each year. Steve Cohen is not going to ruin baseball, but it is going to start an interesting conversation on how baseball’s salary cap system should be managed.
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December 21, 2022 at 11:06 pm
Billionaires ruin everything.
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