Are the Yankees Ruining Baseball?

I detest the Yankees and Red Sox as much as any underdog-loving, fair play advocating, home team adoring baseball fan. I adopted the Oakland A's as my team because I appreciate the craft of building a team, not buying one. However, a salary cap is not the panacea small market teams believe; better management, fiscal responsibility and personnel evaluations determine success more than dollars spent.

In the major sports leagues, football operates with a convoluted hard cap that insures parity by penalizing good teams; the NBA operates with a soft cap, meaning a team can go over the cap to sign one of its own players; and baseball operates with a free-spending, no salary cap system benefiting, it seems, the owners with deep pockets who annually attract the top free agents.

The perception is baseball owners buy championships through free agent acquisitions. The truth, however, is less concrete. While quick to criticize the Yankees, small market proponents ignore the New York Mets, a franchise that spends more money per win than any team in baseball, investing hundreds of millions of dollars in average baseball talent over the past decade.

To most outside the Bronx, the Yankees are the Evil Empire, the epitome of every egregious error in sports and capitalism. The Yankee's free-spending boss George Steinbrenner is the scourge of society, scoffing at the plebes and paying the price to insure the Yankees have the optimal opportunity to win the Fall Classic. Recently he quipped that baseball was not a socialistic endeavor and he hopes the commissioner will not increase its revenue-sharing program which penalizes the big spenders by taxing these teams and donating funds to the small market teams.

Operating without a salary cap creates the perception that Steinbrenner buys championships (though none since 2000) by outspending more frugal owners whose franchises reside in smaller markets and are unable to equal the revenue of America's most famous sports franchise. Does perception meet reality? Does a salary cap equal competitive balance in professional sports, or is it a means for owners to control spending and maximize profits? If the salary cap does not create competitive balance, what does?

Salary caps are popular among the public. However, its effect on sports equality is negligible. "A salary cap transfers wealth from labor to management. That's all it does, and that's all it's supposed to do…The salary cap is a popular concept among fans, for as best as I can tell, two reasons, both the result of heavy league and media proselytizing: The idea that a salary cap will lower the costs associated with attending games; the idea that a salary cap will lead to better competitive balance. Neither is true…The price of tickets is not set to recoup costs, but to maximize revenue…Prices are set by teams to maximize revenue, and are based on anticipated demand…To the extent that the salary cap contributes to competitive balance, I would say that it works negatively: it punishes success, forcing well-built, winning teams to shed talent on a near-constant basis…A system that punishes success, rather than rewards it, seems an odd construct for any endeavor," (Sheehan).

Many baseball enthusiasts view the NBA's soft cap as the answer to control the Yankees and other free spending franchises. Fans mistakenly view the NBA as a model organization, complete with competitive balance. However, the big city teams dominate the NBA like no other league. "Some 16.5 million people live in New York, Los Angeles, Chicago or Houston, more than all the people combined who live within the city limits of the 24 other cities that are home to an NBA team. That a team from one of those four cities usually reaches the NBA Finals has helped fortify the league's popularity since 1980…The probability (96 percent) over the past 23 years that a large-market team reaches the NBA Finals is remarkable when considering the percentages in the NFL, NHL and Major League Baseball aren't even close. Baseball has had eight World Series (38 percent) since 1980 that included at least one team from the top four markets," (Rovell).

While the NBA is known for its eras, with the Celtics and Lakers of the eighties, Pistons of the early nineties, Bulls of the late nineties, the Lakers early in this decade and now the Spurs and Pistons, Major League Baseball has the 800 pound gorilla in the Yankees, but no completely dominating franchise as five different teams have won the World Series in the last five seasons. "In the last twenty years, only six franchises have won an NBA title-and five of them either won at least two in a row or went to back-to-back finals. The NBA system also has given us some of the worst teams in modern sports history. Just since 1988, there have been 28 losing streaks by NBA teams of 15 games or longer. In baseball, there have been two. Two. So, when you hear baseball people speaking admiringly of the NBA's 'flat' payroll chart, don't mistake that for a road map to competitive balance. It's been anything but," (Stark).

Professional leagues battle the illusion that the league is unfair or unbalanced, thus eliminating one of the true draws of sports, its unpredictability. The human element, the upsets of March Madness, the tears of joy of the Olympics, the "Golden Goal" in extra time, the walk-off home run draw sports fans. When a perceived in-balance exists, fans become skeptical, believing as many in Sacramento believe, that the league is fixed in favor of the big market NBA teams or that the Yankees have an unfair financial advantage in baseball. These perceptions hurt the game's popularity or galvanize the fans of other teams rejoicing when these teams lose.

The salary cap is one means of limiting payroll to create competitive balance. However, in the NBA's soft cap, has failed to stop Isaiah Thomas and the Knicks, as its payroll nearly triples the salary cap. Salary cap or no salary cap, successful teams boil down to the people in the organization, from a supportive owner, to a skilled front office, to the coaching staff and players. If one link in the chain is broken or defective, whether the GM does a poor job or the star player gets injured, the organization falters. And, this is the beauty of sports and competition: the unknown, the thrill of victory and the agony of defeat.

So, everything is copasetic in Major League Baseball, right? Yes and no. A salary cap probably would not ensure competitive balance, though baseball's need for more players (25-man roster vs. 12-man roster) creates a compelling argument. Since a top team needs five solid starting pitchers, along with eight position players and a couple key relievers, surviving and thriving on a budget is more difficult than in the NBA.

The biggest positive created by the salary cap is labor peace. Rarely does an NBA player hold out (Vince Carter and Alonzo Mourning in Toronto the exceptions); rarely does an NBA draft pick refuse to sign (Steve Francis in 1999). In MLB, the draft is filled with posturing and maneuvering because some teams will not pay the same signing bonus as a rich team. Therefore, it is more difficult to sign a player, and others demand more money because of what another player gets from a different team. There is nothing to say that the 1st pick must get a higher bonus than the 12th pick; therefore, agents and players make it known how much they expect, and low budget teams pass on players so they do not endure a J.D. Drew-like episode.

Unlike in basketball, where the soft cap protects the team's rights to retain its own free agents, baseball players are available on an open market for the highest bidder. Without the maximum individual salary, a team theoretically could outbid all other teams for whomever the rich franchise chooses. While expenses prevent even the Yankees from employing this strategy, the bidding on the open market excludes the small market teams.

The salary cap, in these cases, could balance things, but some teams would balk at spending all its available money. If baseball started a salary cap at around $70 million, similar to the Phillies who have the 15th highest payroll in the league, Tampa Bay would not automatically spend an extra $50 million/per year to improve. Likewise, if MLB instituted a soft cap, the Yankees would consistently feature a bloated payroll, meaning the cap would offer few differences than the current system.

Beyond signing draft picks, the one area where the soft cap would help is re-signing free agents in low budget markets. Oakland may not have retained all its free agents (Foulke, Tejada, Giambi, Damon, etc), but with a maximum individual contract, Oakland may have re-signed Tejada because Baltimore would not have been able to outbid the maximum offer if Oakland was willing to give Tejada a max deal.

The cap is not the panacea some seek; however, a cap in baseball would create the perception of balance (and perception is more important than reality). Championships, however, rely on the human element, the front office's decision-making and the players' ability. To correct baseball's ills, the salary cap is not the answer; teams like Pittsburgh, Kansas City, Milwaukee, etc need better personnel, from the top of the organization down. People make the organization, not money or history or anything else.