Discuss the idea of a competitive tax pool in baseball

As much as I have a deep love of baseball, I pay very little attention to the numbers game within. And no, I’m not talking about player statistics; I mean the money spent by teams on player contracts, the revenue generated, and the gross discrepancies that exist in spending by small- and large-market teams. Granted, it could be argued that I’ve never had much of a reason to pay much attention to the issue, given that I live in a large market myself (Los Angeles).

However, this blog post was brought to my attention this morning, and while I’m still absorbing it, the idea of a competitive tax pool makes sense to me on first read. I’d like to hear from the more intelligent baseball minds on the board (comapred to me, this would be all of you, essentially) about why this is or isn’t a good idea.

Really? That’s your first exposure to the giant cesspool of crappy salaries and large-market domination that is Major League Baseball?

As I said, it’s not something that I’ve given much thought to previously. Yes, I’ve been vaguely aware of it, and I’ve heard the bitching about the Yankees for years. But I’ve never sat down and paid any attention to it before.

Any thoughts?

Huh. That’s funny, because I’m pretty sure it’s been talked about here before, although not at the length that the blog post goes.

He’s got some interesting ideas for fixes for the system, although I don’t know what kind of loopholes it would open up after inception.

Is the game better or worse off with only the top 6 or 7 big markets interested and contending? If it is, that’s practically having the other teams feeding talent into those 6 or 7 big markets perpetually. Would competitive balance actually bring a better sport? Would it bring in more money?

I’d like to think it would.

Um…if you’re trying to take a shot at me for missing previous conversations about it, you win. I think this makes the third time now that I’ve said I wasn’t really paying attention to the issue until someone specifically suggested I read the blog post I linked to.

I wasn’t even really thinking about debating whether or not better balance among all MLB teams was a good idea or not – I’ve been operating under the assumption that it would be. I’d like to think that if I tuned to any random MLB game on any given day, I’m going to see close to the same level of baseball being played no matter who I’m watching.

I’m just curious about whether the competitive tax pool provides a good way (or, at least, a better way) of bringing such balance about than luxury taxes, revenue sharing, salaray caps and the like.

I’ve run across a number of suggested ideas for competitive balance in baseball, though I think it’s probably only been in the last five years that some of the diehard baseball free marketers might have started to think there is a problem. (Before, there were many arguments, some good and some not, about how brains beat money, but I think that’s a little harder to argue nowadays as the payrolls go up way beyond some teams’ abilities to reach even for a single year–and a single year generally ain’t enough.)

In any case, revenue sharing and luxury taxes can end up being giveaways to stingy owners who are essentially pocketing the difference. Salary floors are an interesting idea, but they would just likely cause salary inflation.

So, the competitive tax pool seems like an interesting way around those problems, though I could still see it causing inflationary pressure on salaries. You would think the higher payroll teams would stop pushing the bidding too high since if they win they have to pay it AND if they lose they have to pay it, so perhaps it would cause deflationary pressure on salaries.

I don’t think the Yankees have been smart with their money, and allowing them to set a tone for the rest of the sport is kind of a bad idea. They have been able to buy themselves out of trouble and, frankly, though it would benefit my team (Cleveland) to also have the ability to buy themselves out of trouble, I’d like brains to be a bigger component than pocketbooks. The competitive tax pool essentially allows smaller teams to take risks with Yankee money. It’s satisfying, don’t get me wrong, but is it prudent?

Easy there. Put the claws back in, kitten. I seem to remember some chatter on more than a few threads about competitive balance before and how the salaries stack up.

First let me rant:

This sums up my biggest problem with MLB and explains why it has relinquished its #2 position in pro sports to the NBA for me. I am an Indians fan, and the trades they made last season were utter crap. They should have changed their name to the Expos after the moves they made. What good is it that the Indians have been one of the best organizations in the last 15 years at finding and developing young talent if they have to give half of them away? You could make an All Star team of ex-Indians. How can anyone claim that the Yankees and Red Sox have good front offices if they’re rarely punished for their personnel mistakes and can essentially rely on smaller market teams to develop talent for them? If teams like the Indians have to go through this 4-5 year cycle of developing players just to open a 1 to 1 1/2 season window to go for a title, only to be forced to scrap the whole thing if it doesn’t pan out, then why should I care about them through the rebuilding years? At this point, MLB ought to declare itself an 8 team league and get it over with.

As for the “Competitive Balance Payroll Tax,” I think it’s an interesting idea. I still think MLB needs some kind of salary cap. One issue I can see is that since teams like the Yankees can afford to dump free agents that didn’t pan out and continue to pay most or all of their salaries, what would stop them from offering 10-12 year contracts to veterans, with a larger chunk of the salary being paid in the early part of the deal? Even if the player is old and becomes useless for the last 4 or 5 years of the deal the Yankees could still afford it. I think you’d need to impose limits on contract length based on age.

The entire “Tax Pool” idea, which I kinda skimmed through, left me with the same kind of impression. It’s an idea that seems interesting on the surface, but is it a viable, long-term strategy?

You also run the risk of labeling it an “Anti-Yankee Tax”, which it would be. I can’t see the Players’ Union agreeing to limit contracts based on age.

I disagree with you about those trades, since I think they got decent return for players they weren’t going to be able to sign. I don’t think they could do better given the financial constraints they are under. (Losing Victor really hurt. Lee is an outstanding pitcher but, frankly, I never liked him. Not like Victor.)

One thing a salary cap does that I don’t like is it benefits owners at the expense of players. Now, I know that the amount of money the players make is way above most people’s salaries, and it’s hard to think “Gosh, that guy sure is underpaid,” but I don’t really like controlling salaries.

The tax idea could end up as a salary control, of course.

They had Martinez and Lee for another season at affordable salaries. They could have re-signed one to a long term deal. Who did they get back that makes you think “Yeah, can’t miss player right there?” Masterson? Not to mention that even if any of them pan out and achieve anything, they’ll just get dumped.

What would be the point of a bad team signing a good player to an expensive long-term deal? Sounds honestly like spending money for the sake of spending it–which is something the Mets do. :smiley:

I don’t believe in “can’t miss players.” It’s all “can miss.”

Which is why you always trade prospects for known commodities. Of course, it’s hard to do that if you have a small market and/or have to keep salaries down, so you’re forced to do the opposite.

It’s a serious problem when fans of at least half of MLB’s teams realize that their teams really don’t have a legitimate chance to contend…and that, even if they get fortunate and become successful (either through a “lightning in a bottle” season, or by developing a crop of good young players), that success is almost undoubtedly unsustainable.

The current situation means that baseball (from a fan-appeal standpoint) is likely thriving in the large markets…and likely withering away in most of the smaller markets.

I’ve been a Brewers fan for 35 years, and most of the last 20 have been awful. At least we’ve had the past 2 or 3 seasons to smile a little about; fans of teams like the Royals or Pirates haven’t even had that.

Unfortunately, the power wielded by that handful of wealthy teams means that a more balanced playing field is highly unlikely, IMO.

It’s been a subject of intense interest for the last 20 years at least, and being a Pirates fan (inasmuch as I watch baseball at all anymore) it directly affects the small-market teams to the point that it’s hardly worth watching anymore. PNC Park is one of the best stadiums in baseball and the Pirates have a storied history and they can’t draw flies because of nearly two decades of futility. Some of it is management, admittedly, but management can’t make money magically materialize.

The Tigers have an impeding sense of doom. The area has a 50 percent unemployment rate. The teams is trying to cut back financially and Justin Verlanders contract is coming up. How can they keep him? He is the pitching face of the team and he will get offered a boat load of money. He wants to win and get a series ring. The Yankees can practically guarantee one.

See, I just don’t believe this. I think it is far more management than you are willing to admit.

Winning leads to fans, which leads to higher payroll, which leads to winning. Do teams with smaller markets have to compete smarter? Absolutely. Do disastrously bad managerial moves hurt small-market teams much more than large-market teams? Of course. This is why poorly run teams making the same mistakes over and over with the same leadership (Royals, I’m looking at you) are so frustrating, even for non-fans of those teams.

But the idea that a team outside of the largest markets cannot compete is just not borne out by the facts. St. Louis is not by any measure a large market (roughly the size of Pitt, actually) and the Cardinals were probably the second most successful team of the last decade. Minnesota has been very competitive with small payrolls, and the Marlins have one a WS while the Rays went to one.

Put another way, the Royals spent $82 million on payroll last year (how???). The Rockies spent $84 million. I find it hard to explain why one team made the playoffs while the other languished with a 97-loss season other than management.

Practically guarantee one? The Yankees have one exactly as many titles over the last 8 years (certainly the longest contract Verlander could get) as the Florida Marlins have. Hell, the Tigers have been in as many Series over the last six years as the Yankees…

I would argue that competitiveness is not completely broken in MLB. The 2000s were a great decade for competitive balance. Nine different teams won the title. Compare that to the NFL (a bastion of parity we are told) - only 7 different teams won the Super Bowl (and one of them won three times).

ETA: Of course the NBA was even worse - only FIVE different champs over the decade… and that’s with a salary cap.

Bad teams have a habit of perpetuating their own suckiness through boneheaded free agent moves. Why? Jeff Pearlman argues (emphasis added):

7 teams won the Super Bowl in 10 seasons and you think that suggests the NFL doesn’t have parity?

As for the NBA, part of the problem was that you had so many teams like the Knicks stuck with the long term consequences of their free agency blunders that were impossible to get out from under. The NBA also makes it easier for a team to keep its stars and compete for a long period of time (to say nothing of freak occurrences suck as the Lakers getting Pau Gasol for basically nothing).

And I’d argue that it is. There’s a lot more to competitiveness than just who wins the title.

Take the six teams in the three largest markets (New York, Chicago, LA). Add the Boston Red Sox, who represent all of New England and for geographic and historical reasons can afford a mega-payroll. These 7 teams made the playoffs 34 times in 70 tries (48.5%) during the 2000’s.

Take the other 23 teams. They made the playoffs 46 times in 230 tries (20%).

That is a huge, gaping disparity accounted for entirely by market size.

Are there success stories among the 230 small-market seasons? Absolutely. Does management explain why some cities (St. Louis, Minnesota) have more of those success stories than others (Pittsburgh, Kansas City)? Yep. But that doesn’t change the fact that the smaller markets start out at a huge disadvantage. They have to bust their ass and get really lucky to achieve occasionally what the big-market guys achieve year-in and year-out.

If the Mets screw up, they’ll make the playoffs only twice in 10 years. If the Pirates screw up, they’ll have 17 losing seasons in a row.