SALARY CAP

A hard salary cap will benefit all baseball

Abstract

In this study we try to explore the concept of “Salary Cap” in a holistic context. The main focus of the research is on “Salary Cap” and its relation with “baseball player performance”. The research also analyzes many aspects of “Salary Cap” and tries to gauge its effect on “the investment made by the sports board”. Finally the research describes various factors which are responsible for “Salary Cap” and tries to describe the overall effect of “Salary Cap” on “the overall performance of teams, who are playing baseball.

Table of Contents

Abstractii

A hard salary cap will benefit all baseball1

Introduction1

Discussion2

Conclusion5

References6

A hard salary cap will benefit all baseball

Introduction

As Major League Baseball's post-season draws to a close attention will soon shift to the impending expiration of Major League Baseball's Collective Bargaining Agreement (CBA) in December. Along with talks of playoff expansion, an international draft, and revenue sharing demands for a salary cap will inevitably emerge from all corners. And of course there is the ever-popular rallying cry among fans that a salary cap will lead to better competitive balance and reduce ticket prices - neither of which is accurate. So while the vast majority of the media, owners and baseball fans will insist that a salary cap is necessary to further baseball's best interests, I'll tell you why that conclusion couldn't be further from the truth (Szymanski & Kesenne, 2004).

First, let's address the common misconception that Major League Baseball should have a salary cap so it can be competitive like the NFL. While the NFL is an example of a successful league with a salary cap, the truth is that the NFL's ostensible competitive balance is a function of a number of factors - the least of which is its salary cap. The NFL's parity can be attributed to its relatively short regular season schedule, the availability of 12 postseason berths, a single elimination playoff format, fixed scheduling to benefit weaker teams and a reverse-order draft where players can make a significant impact relatively quickly. Just imagine what Major League Baseball would look like if it implemented policies similar to the NFL's to increase competitive balance. We probably wouldn't be having this discussion right now. The bottom line here is that arguments contending that baseball should have a salary cap simply because the NFL has one are lazy and ill-advised.

Furthermore, lost in this debate is the fact that 9 of the past 10 World Series titles have been won by different clubs - the Boston Red Sox were the only repeat champion winning in 2004 and 2007. Compare that with the fact that either the Patriots or Steelers have claimed 5 of the past 10 Lombardi Trophies. And don't bother mentioning the NBA where 9 of the past 13 championships have been won by either the Lakers or Spurs, and over 75% of NBA titles have belonged to one of four teams - the Lakers, Bulls, Pistons, or Spurs - since the league introduced a salary cap in ...