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About Jon
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1) using profanity or any euphemisms for profanity
2) personally attacking other commenters
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4) arguing for the sake of arguing
5) discussing politics
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Salary Schmap
2009-01-09 14:10
by Jon Weisman

At Baseball Prospectus, Shawn Hoffman makes the case that a salary cap would actually harm major league baseball's small-market teams:

Let's say, in some far-off universe, MLB owners and players actually did agree on a salary cap. With it would come the normal provisions: a salary floor at around 75-85 percent of the cap, and a guaranteed percentage of total industry revenues for the players. Since the players have been taking in about 45 percent of revenues the past few years, we'll keep it at that figure (the other three major sports leagues, which are all capped, each pay out over 50 percent).

Using 2008 as an example, the thirty teams took in about $6 billion (not including MLB Advanced Media revenue), for an average of $200 million per team. Forty-five percent of that (the players' share) is $90 million, which we'll use as the midpoint between our floor and cap. If we want to make the floor 75 percent of the cap (a low-end figure, relative to the other leagues), we can use $77 million and $103 million, respectively.

With a $103 million cap, nine teams would have been affected last year, and a total of about $286 million would have had to be skimmed off the top. Since total salaries have to remain at existing levels, the bottom twenty-one teams would have had to take on this burden, which had previously been placed on the Yankees, Red Sox, et al. On the other end, fourteen teams would have been under the payroll floor, by a total of $251 million. Even discounting the Marlins' $22 million payroll, the other thirteen teams would have had to spend an average of $15 million more just to meet the minimum. Some of those teams might be able to afford it; most wouldn't.

Imagine being Frank Coonelly in this situation. Coonelly, the Pirates' team president, has publicly supported a cap. Had our fictional cap/floor arrangement been instituted last year, the Pirates would have needed to increase their Opening Day payroll by $28 million. Not only would the team have taken a big loss, but Neal Huntington's long-term strategy would have been sabotaged, since the team would have had to sign a number of veterans just to meet the minimum payroll.

Now fast forward to 2009. Let's say the Pirates' sales staff runs into major headwinds, with the team struggling and the economy sinking. The team's top line takes a hit, falling $10 million from 2008. The Mets and Yankees, meanwhile, open their new ballparks, and each team increases its local revenue by $50 million. If the twenty-seven other teams are flat, total industry revenues rise by $90 million (not including any appreciation in national media revenue). Forty-five percent of that, of course, goes to the players. So even as the Pirates' purchasing power decreases, the payroll floor actually rises. ...

Not entirely unrelated: Ken Belson looks at the effect of the nation's economic woes in the 1930s on baseball for the New York Times.

Comments (75)
Show/Hide Comments 1-50
2009-01-09 14:17:34
1.   Jim Hitchcock
Hey, I got LAT'd!

Jon & Marty might get a kick out of the story of the downward spiral of the L.A. Weekly over at

To say the least, it really brought some disgruntled(and justifiably so) journalists out of the woodwork.

2009-01-09 14:18:40
2.   Daniel Zappala
Seems like the only way a salary cap makes sense is if all of the revenue is shared.
2009-01-09 14:22:37
3.   Zak
The counter argument to this is that the Pirates may be more inclined to spend the $28 million if the most that another team can spend is about 100 million. Right now, the Pirates have zero motivation to spend the extra $28 million because it does not really help make them any more competitive. But if the playing field is more level, their extra $28 million can be recouped because the team is more competitive (attendance, gear sales, TV rights, etc.).

I am not a proponent of the salary cap, but unless I am reading it wrong, this article actually does not make it seem like a crazy idea.

2009-01-09 14:25:17
4.   trainwreck
Does underdog support Bill Romanowski as Broncos coach? : )
2009-01-09 14:25:34
5.   kinbote
Under the scenario outlined above, would teams be allowed to hand out long-term contracts to youngsters along with upfront bonuses that would go toward the current year's payroll? Or would bonuses be prorated according to the length of the contract?
2009-01-09 14:27:29
6.   Johnson
Responding to 598 in the last thread...

I don't understand what you mean. I was responding to a post suggesting that Miles should pay (presumably "bribe", likely tongue-in-cheek) somebody to sign him.

My point was that Miles has no personal financial stake in whether or not Portland loses the medical waiver, and therefore no reason to bribe somebody to employ him. Clearly he does have personal financial stake in current/future contracts at the NBA level (though that stake might, in terms understandable to people of my means, be like going around in his spare time looking for change on the sidewalk).

2009-01-09 14:28:02
7.   Eric Stephen
My guess it would be prorated over the life of the deal.

I seem to remember Bob Costas in "Fair Ball" years ago advocating such a system so that if a team was under the salary floor one year (say if it had a bunch of young good players like Tampa Bay) as long as it averaged at least the salary floor in payroll over a 2 or 3-year period it would be OK.

2009-01-09 14:29:15
8.   Daniel Zappala
1 Wow.
2009-01-09 14:35:11
9.   jujibee
In the above scenario, would that balance out the powerhouses of baseball?(NY, Boston, LA) I think it would because you don't have a 30 MM player. Development from within the organization becomes more of a focus than free agency. Teams stay together longer (theoretically) because the money doesn't drastically change from free agency going from team A to team B. I think this allows for a fan base to follow a team, rather than transactions of where their favorite players ended up. I think if CC was offered about the same money to play for the Giants, Yankees, Dodgers, Brewers, etc. I think he'd have chosen the Giants hands down. I think with a cap the salary offered to players, especially the special players, doesn't change by hundreds of millions, but rather a few million, and that would help fans to actually follow a team.
2009-01-09 14:37:21
10.   Tripon
Penny signing official, and a few minor moves

2009-01-09 14:37:48
11.   Jim Hitchcock
8 Long read, but I've read Coop for years, and he pulls no punches on this one.
2009-01-09 14:41:05
12.   Penarol1916
9. It seems to me that there is a ton of player movement undertaken in the NBA due to salary cap issues. The NFL is even worse, but with the unguaranteed contracts and constant cutting, it is not a very apt comparison.
2009-01-09 14:55:02
13.   Landonkk
Hoffman's thinking is so flawed that I can't even begin to wrap my ahead around it. He takes a very distinct situation and punches holes in it... like this is the only way a cap can be implemented.

A cap would change the way every franchise conducts business. The goal would shift from how to be profitable despite losing to the more you win, the more you make.

Yes, a cap would need to be phased in and there are numerous obstacles, but the end result would be a net positive for the competitiveness of the league and therefore a plus for the fans.

Without a cap, the league really is turning into the WWF. No, the games aren't scripted, but as teams like the Royals and Pirates struggle to compete, their fans will see that the odds are truly stacked against them and soon one day there won't be Pirate 'fans', or Royals 'fans' and the only reason people will show up is to see their favorite team (the visitng Yankees/Dodgers) play. kinda like when we would all show up to see Macho Man Randy Savage wrestle that hometown, no name chump.

There will always be teams like the Rays who put together highly talented, very cheap teams that compete, but 85 times out of 100, the team with the most money will win it all.

/end rant

2009-01-09 14:55:36
14.   fiddlestick
The salary cap scenario outlined would still drastically favor large market teams. They would have enough money left over after satisfying the min. cap requirements and not exceeding the max to pump a ton of money into player development. Meeting the minimum for the smaller market teams would seem to be at the expense of developing younger players.
2009-01-09 15:02:25
15.   Landonkk
14 That is why it would need to coincide with an even more stringent revenue sharing plan... another reason it will never happen.
2009-01-09 15:07:11
16.   silverwidow
13 Didn't think I'd see a 1980's pro wrestling reference on here.
2009-01-09 15:07:26
17.   Jon Weisman
13 - The free agent era is more than 30 years old. Has the richest team or teams really won 85 percent of the time?

The way I see it - keeping in mind that I was presenting Hoffman's article as a counterpoint, not as the last word - is that the richest teams definitely are going to contend more often, but they don't seem to have a monopoly on winning.

2009-01-09 15:09:11
18.   ChicagoDodger
13 but the end result would be a net positive for the competitiveness of the league and therefore a plus for the fans.

Perhaps this should read "a plus for some of the fans"?

I hate the idea of a salary cap, because like in the NFL, none of the teams really stand out, and, for me anyway, it makes for very bad football. I am not the slightest bit interested in the NFL these days, because I feel none of the teams are any good.

Now, its true that "good" is a relative term, and mainly just a mtter of opinion, but I used to think that in sports you needed to aspire to be the best. But now, I don't see teams aspiring to be the best, rather, just being competitive, and lets see where the chips fall in the playoffs. For me that is truly uninspiring.

2009-01-09 15:10:47
19.   mwhite06
13 I'm not saying I disagree with you. But 4 years ago you could have plugged in Tigers 'fans' and Devil Ray's 'fans' into your scenario. Yet both teams have since reached the World Series (albeit with rather different strategies.)
2009-01-09 15:12:26
20.   trainwreck
Losing the Royals as a franchise would not bother me at all.
2009-01-09 15:13:50
21.   fiddlestick
15 I still don't understand what's not working about the current system? The top few pay the bottom many a fee to spend tons of money. But good organizations have proved over and over again that you can win if you spend what money you have wisely. Bad teams like the Royals and Pittsburgh shouldn't have any sort of "right" to be on payroll-competitive par with everyone else. Baseball transactions are by far the most compelling when you look at the hoops you have to go through in the NBA and the near non-existant trades of any meaning in football.

If you want real equal footing, sell every team to the Steinbrenners and go single entity ownership like MLS. :D

2009-01-09 15:14:03
22.   Landonkk
17 I guess I was assuming competent management... my bad.

I think that a study of payroll vs. 'winning it all' should be limited to the last 15 years when the media rights of certain teams really helped push them into a league of their own in regards to revenue. I doubt that THE highest payroll won it 85% of the time, but I would bet that the highest 10% of payrolls won it more than 80% of the time. If you will allow me to massage my numbers a little bit.

2009-01-09 15:15:25
23.   regfairfield
It's hard for me to feel sorry for a team that turned Johnny Damon, Jermaine Dye, and Carlos Beltran into Neifi Perez, Mark Teahen, Angel Berroa and John Buck.
2009-01-09 15:21:08
24.   Jon Weisman
22 - I don't know how much massaging you want to do, but the highest 10 percent of payrolls would be the three-richest teams, and 80 percent of the time would mean 12 out of the past 15 years. I'm not trying to be literal, but just establish how close we are to this admittedly arbitrary benchmark.

The last 15 WS winners are:

Yankees (four times)
Red Sox (twice)
White Sox
Marlins (twice)
Blue Jays

2009-01-09 15:23:33
25.   Landonkk
21 Good points. Like ChicagoDodger pointed out, what I think is best is relative. I like the way the NFL is, knowing that every year - every team has a good chance to compete as long as there is good management and coaching in place.

The current MLB system clearly works out great for most owners and the league as a whole puts on a good "show." But there is a certain demographic of fan out there that feels (rightfully so) that they are getting the short end of the stick.

2009-01-09 15:24:59
26.   fiddlestick
23 I'm more impressed with how they turned Alex Gordon into Ty Wigginton
2009-01-09 15:28:43
27.   underdog
4 Nope, for the record I would not support Romanowski as coach other than the pure amusement value. I did admire his gumption and Power Point presentation, however. ;-)

Fortunately they have 7 qualified candidates they've already interviewed, and it's going to be one of those guys. Romanowski can be hired as Anger Management Specialist, though.

2009-01-09 15:30:51
28.   Landonkk
24 "I don't know how much massaging you want to do"

Apparently more than a Swede on the Senior Citizen Marathon Runners Annual Cruise.

2009-01-09 15:33:08
29.   Jon Weisman
28 - LOL
2009-01-09 15:46:09
30.   bhsportsguy
24 If baseball was still following Pre-1968 rules (two playoff participants) or even 1969-1993 (4 playoff participants) rules, the impact of economics would be much bigger.

By adding 100% more participants in the post-season and adding an additional division, you created smallers pools to compete in and by adding the wild card, a team no longer has to win a division to advance and in a lot of cases go and win the World Series.

2009-01-09 15:49:42
31.   ToyCannon
Best Chinese restaurant in Chatsworth for lunch?
2009-01-09 15:53:49
32.   mwhite06
31 Golden Hunan is in Northridge but not far. Its on Reseda and Devonshire.
2009-01-09 15:58:41
33.   silverwidow
Stephen Strasburg might win the 2011 NL Cy Young.
2009-01-09 15:59:23
34.   ToyCannon
I'm not in favor of a cap. I kind of like how the revenue sharing works, it is fun to watch the Yankee's outspend the Rays by gazillions of dollars, thus requiring them to pay a luxury tax that gets distributed among the teams and watch one of those teams beat them with one of the smallest payrolls in baseball.

Of course if the Yankee's ever get smart then trouble will be brewing. Getting CC and Tex was a good start for them but they replaced Mussina and Giambi which is different then replacing Edin Jackson and Greg Gross/Johnny Gomes with David Price and Pat Burrell. The Rays will have plenty to say in this years race no matter how much money the Yankee's spend.

2009-01-09 15:59:51
35.   silverwidow
33 Although I hope Kershaw beats him out, of course.
2009-01-09 16:00:26
36.   ToyCannon
I remember Mark Prior getting such accolades.
2009-01-09 16:03:37
37.   bhsportsguy
30 Since the Wild Card has been introduced in baseball in 1994, 26 out of 30 teams have made the post-season.

The teams on the outside looking in, Washington/Montreal (sorry about 1994), Pittsburgh, Kansas City and Toronto.

Toronto won the last two World Series prior to the change and Pittsburgh had won a couple of straight divisions with Mr. Bonds just before this time period.

2009-01-09 16:03:50
38.   ToyCannon
Thanks, anything closer to Topanga-Winnetka north of Saticoy? Looking for a hole in the wall.
2009-01-09 16:04:14
39.   Eric Stephen
Stephen Strasburg might win the 2011 NL Cy Young

Someone page The Wolf from Pulp Fiction!

2009-01-09 16:04:30
40.   Ranma
Found within Heyman's daily drivel:

The Giants are in excellent position to outbid the cautious Dodgers if so inclined. San Francisco has an excellent TV situation and has now paid off more than half its debt on its beautiful franchise-owned AT&T Park. Several of the team's deep-pocketed 30 owners could buy and sell Dodgers owner Frank McCourt. The Giants showed they will still spend if they must when they ponied up $18.5 million for aging shortstop Edgar Renteria, but they are still badly in need of offensive juice.

• The Dodgers' most likely replacement for Lowe and Brad Penny may be Randy Wolf.

2009-01-09 16:04:58
41.   bhsportsguy
35 They could or the Yankees could win 35 out of the first 50 games and cruise to the playoffs. Thus is the beauty of baseball.
2009-01-09 16:06:34
42.   underdog
Yep, Heyman and his direct Boras hotline continue to drivel. Anyway, right or wrong, I would think the Dodgers will get one last crack at making a bid on Manny even if someone else steps forward officially. Boras + Manny probably won't pull a Furcal-Atlanta thing. I hope.
2009-01-09 16:08:11
43.   underdog
And on that note, great new post from the Chronicle's Henry Schulman, on the Giants-Manny rumors:

: I am told that Scott Boras is spreading word that the Giants are going to make a big push for Ramirez in the next day or two. The Giants' reaction to that was laughter on the other end of the phone line.

Here are two reasons why I believe the Giants:

1. If they really want to explore a short-term deal for Ramirez, which I believe to be true, it makes no sense for them to force the issue now, five weeks before spring training. It makes a lot of sense to wait until late January, when a player's leverage is weakest.

2. A major-league source has told me that Boras is still seeking "north of" four years and $100 million for Ramirez. Even my sources who have been the most gung-ho on the idea of Manny to the Giants have not indicated an interest in that kind of contract.

2009-01-09 16:08:12
44.   trainwreck
This is the first period of my life where people seem to be completely apathetic towards the Giants here.
2009-01-09 16:12:50
45.   underdog
Whatchu mean? I hate the Giants as much as ever. I just don't buy the Manny rumors. Man, just reading a few comments from their fans on MLBTR made me hate them all over again.
2009-01-09 16:14:31
46.   Jon Weisman
40 - "most likely ... may be"

Whenever I notice myself qualify a qualifier in my writing, I try to make an edit.

2009-01-09 16:16:59
47.   Kevin Lewis

The new Giants for me have become the Padres, but now I don't know who to dislike.

2009-01-09 16:18:26
48.   trainwreck
I mean, all the Giants fans I know seem to no longer care about the team.
2009-01-09 16:21:08
49.   trainwreck
I meant here as in the Bay Area, not DT.
2009-01-09 16:22:47
50.   bhsportsguy
48 More people in the Bay Area care about Drew Gordon than Giant Baseball.
Show/Hide Comments 51-100
2009-01-09 16:23:38
51.   LogikReader
44 49

It's kind of surprising... as if the new ballpark has turned SF into a fairweather baseball town.

I can relate too: one of my friends is a Giants fan who could care less about the team. Hard to explain... maybe they just like football more?

2009-01-09 16:23:45
52.   trainwreck
Some of my cousins in the south bay even know who he is!
2009-01-09 16:23:50
53.   underdog
48 - Ah, I thought you meant here as in DT. Hrm, yeah, could be temporary, as soon as the team is more competitive they'll hop back on the bandwagon and return to acting like they're God's Gift to Baseball.


Meanwhile, why is it that the middling American remake of My Sassy Girl is now out on DVD and yet there's no decent non-import DVD for the Korean original? Lots of questionable imports. Stupid DVD distribution system...

2009-01-09 16:39:19
54.   Megaballs
Today a friend said he heard on ESPN that Dodgers put the same 2 year $45 mil offer for Manny on the table with a 72 hour window. They'd then move on to Adam Dunn. We then found NO substantiation anywhere and wonder where he heard it.

But my initial response was "good, its time"
Once Dunn's gone, then what?

2009-01-09 16:40:20
55.   CanuckDodger
52 -- Hey, Trainwreck, I got a great Canadian series to recommend to you. A drama called Durham County. Watched the first season of six episodes a few days ago. Thought it was fantastic. The DVD is available from but I am sure it can be downloaded from the torrents.
2009-01-09 16:40:52
56.   trainwreck
Sweet. I will check it out.
2009-01-09 16:44:53
57.   El Lay Dave
32 That's funny - I tried that place when I moved to Northridge and never returned. The place I find myself in most often around there is Mandarin Deli (Reseda and Prairie).

38 Tough area. Yang Chow, which I wouldn't term a hole-in-the-wall exactly, is pretty good, Topanga, just N of Victory. The West SF Valley is definitely NOT like the SG Valley.

2009-01-09 16:49:03
58.   JimBilly4
2 Yes, the whole point of a salary cap (which Hoffman appears to studiously ignore) is the sharing of revenue. The Pirates would be forced to spend $28 million more, but they would receive $28 million more as well. The Steinbrenners would pay just as much money to baseball players as before, only now they only get to keep $103 million of it to pay for their own players. The big market teams hate Salary caps: Their costs remain the same, but they lose most of their competitive advantage. They will still have some, as they were surely be some sort of luxury tax system that a rich team could swallow more easily than a poor team, but whatever.

Look, the number one reason for team success is a well run organization. The number two reason is luck. But number three is money and it is far from inconsequential. Of course we can all point to examples of poor teams succeeding and rich teams failing, but we do not have a even playing field. It is harder for a poor team and easier for a rich team: the Yankees can make mistake after mistake and be back in the playoffs almost every year. Is that fair?

Of course that is not the question baseball asks itself. That question is: What makes us the most money? And maybe having the Yankees, Red Sox, Dodgers, etc. having an edge is better for their bottom line. Certainly they like the way the World Series viewership looks...

2009-01-09 16:49:45
59.   Marty
If your in Chatsworth, either get the idea of Chinese out of your mind or go to Yang Chow or PF Changs.
2009-01-09 16:50:09
60.   dodger fan in hong kong
A New Year greating from Hong Kong.

Some of you say that this is the best site on earth. Not sure if that's true, but I certainly spend far more time on this than any other sites. I would therefore like to provide what (token) support I can to help Jon.

I will continue what I started last year. Email me at hsu dot hubert at bcg dot com, let me know your donation to the site, and I will match up to $300 in total.

Go Dodgers, and sign Manny already!

2009-01-09 16:51:19
61.   CanuckDodger
56 -- There is some Durham County stuff on YouTube. Google "YouTube Durham County Series Promo" for a trailer, and I recommend doing the same for "Durham County Opening Theme." The opening theme sets the atmosphere brilliantly.
2009-01-09 16:51:31
62.   Megaballs
Why not a 2 year $24mil offer to Ben Sheets? He's an ace when healthy, has no history of arm issues and apparently no legit offers 6 weeks before pitchers report.

I guess Ned is playin poker really well this time. But eventually you gotta show your hand.

2009-01-09 16:54:39
63.   trainwreck
Already found streaming feeds of it. : )
2009-01-09 17:01:11
64.   El Lay Dave
57 --> 59 I feel completely validated now that my recommendation aligns with Marty's!
2009-01-09 17:05:35
65.   Gen3Blue
Now I have been against a salary cap, because I foresee most systems being unwieldy and creating a night-mare of deals like the NBA. But I must admit there were times in the lat 10 years when I thought tax cuts and deregulation would be great for the economy, so I should probably be ignored, or used as the opposite of correct( I can't quite say "right" here) policy.
2009-01-09 17:05:40
66.   Disabled List
As the above example illustrates, there can be no salary cap without even distribution of revenue.

I think it's very sad that the Twins had to sell a player like Johan Santana for next-to-nothing, and the parade of stars out of Oakland. I'm not sure if a salary cap or increased luxury tax is the answer, but some system should be put in place so that teams don't have to come to those types of decisions. If a player wants to leave, fine. But his original team always ought to have the means to make him a competitive offer.

2009-01-09 17:07:45
67.   Fallout
I'm afraid that any deal with Manny is worth the number of years signed -1.
2009-01-09 17:09:09
68.   Marty
64 Well, I wasn't really recommending them. Just, if you HAVE to get Chinese, they do a decent Americanized version.
2009-01-09 17:12:07
69.   Eric Stephen
One could make an argument that the Twins would have been better off in both the short and long-term by keeping Johan last season.

Johan was set to make $13.25m last season. The Twins signed Livan Hernandez for $5m to take his place, so at the very most they saved $8.25m. I think they also signed a couple other veterany types that contributed little, which would cut into that $8.25m.

With Johan, they likely would have made the playoffs, and would have gained more in postseason profit than it would have cost monetarily to keep him. Then, factor in that the package they received from the Mets was pretty crappy, and you have a situation where you are probably better off, or at least not much worse off, with the two draft picks the Twins would have received in the 2009 draft.

2009-01-09 17:13:17
70.   underdog
I'm going to see if we (GreenCine) can get Durham County, even though it's only available in Canada (but at least same region DVD). See if we can get a decent price for it. Heard great things.


I hope the pressure Boras re Manny thing works. As I keep saying, even though they may now be just false rumors, if Manny did somehow later end up signing with the Giants I'm going to be upset. I still prefer him to Dunn.

2009-01-09 17:15:06
71.   Disabled List
69 Yeah, but what kind of contract would FA Johan Santana have commanded on the market this offseason? It would probably be at least as much as the one Sabathia got. And there's no way the Twins would be able to get anywhere near it.
2009-01-09 17:30:44
72.   CanuckDodger
If you are buying for GreenCine, you should check out the Canadian series Intelligence (Season One) DVD. has it, and quite a bit of information you can read up on.
2009-01-09 17:43:41
73.   El Lay Dave
68 Yes, given the constraints that about the best one can do, but you went on the record, which is good enough for me! Do you have a suggestion for Northridge? I really can't justify driving all the way out to the SG Valley every time I want Chinese.
2009-01-09 17:48:56
74.   Jon Weisman
2009-01-09 17:49:17
75.   ToyCannon
57 59
That is funny. My web designer is leaving because he loves to eat, and has been unable to find anything in Chatsworth to satisfy him. He's Chinese so I thought for his going away lunch I'd find him a good place. Evidently it is a fools errand and he has made a good decision. He is from Alhambra and is spoiled.

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