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Salary Cap and Major League Baseball


             A salary cap is best defined as a limit that teams can spend on player contracts. There are two types of salary caps a hard cap and a soft cap. A hard cap does not allow a team to exceed the limit for any reason. An example of a league that uses a hard cap is the National Football League. A soft cap has exceptions which allow teams to exceed the cap for certain reasons. The National Basketball Association is a league which has a soft cap. For this paper we will be looking at how a hard salary cap would affect parity in Major League Baseball. There would also be a minimum salary limit. This means that every team in the league would have to keep their payrolls below a certain amount and above a certain amount. By also having a minimum salary teams would not be able to put together a team that essentially cannot compete because payroll was kept low in order to maximize profits. .
             The criticism that the New York Yankees organization hears about every year is that they are essentially buying a championship when they have a payroll that is much higher than anybody's in baseball. The Yankees payroll was 156 million last year compare that to the team with the second highest payroll the Los Angeles Dodgers at 115 million and it is easy to see that the Yankees are able to spend much more money on their team than any other organization. Then compare the Yankees payroll to the lowest 21 team payrolls and the Yankees payroll more than doubles any of these teams. This shows that teams on the high end of payroll have much more money to work with when signing players to play on their teams. However our measure of competitive balance focuses on whether the salary cap would be able to allow all teams, particularly teams with the bottom ten payrolls to be competitive or would it have no affect or would it make the situation that exists worse. To proceed we must introduce our production function.


Essays Related to Salary Cap and Major League Baseball

1. Salary Managment Who Needs It

... much a team can spend. Two sports which have adopted alternate policies are baseball and hockey. Baseball doesn't have any form of salary cap, although it does have a luxury tax on teams spending over the league's set amount (Staudohar 8). Although a salary cap was never implemented in Major League Baseball, there was talk of a cap. League officials and owners predicted that a salary cap would allow lower budget teams to be able to pursue better quality players that were ... usually drawn in by larger income franchises (Staudohar 9). These talks and ideas were greatly considered, but we...

  • Word Count: 993
  • Approx Pages: 4
  • Has Bibliography
  • Grade Level: High School

2. Salary Caps for Sports Leagues

... above. Lemieux is right when he says the sport needs some sort of salary cap. If you look closely at the free-agent signings, there are five or six teams that are driving prices up. The NHL is following the lead of Major League Baseball and creating a two-tier system in which the rich teams collect pennants and fans in the smaller markets simply do penance. The ... salary caps that are in place for the National Basketball Association and the National Football League aren't perfect, but the experience in those leagues has gone a long way toward ... to these issues then inevitably ! in d...

  • Word Count: 3037
  • Approx Pages: 12
  • Grade Level: High School

3. Baseball Salary Cap

... spiral because big market teams have been dominating post-season play. The lack of a salary cap has brought about controversy in major league baseball. The owners, players, and fans seem to disagree about the current state of baseball and what, if anything should be done. The salary cap debate is not a new issue in baseball or in sports. Owners have been playing with the issue for a while, with the ... teams in small markets from having their talented free agents bought up by big market teams, and to equal the revenue gap. The first proposal in 1990, by then Major league baseball commis...

  • Word Count: 1455
  • Approx Pages: 6
  • Has Bibliography
  • Grade Level: High School

4. baseball

... not in favor of a team. COMPARISON BETWEEN PROFESSIONAL SPORTS Why is it that Major League Baseball can lose so much money in cities that teams from the NBA and NFL can thrive in? Some individuals argue it is because of a salary cap and revenue sharing. Major League Baseball has no salary cap and a very poorly organized revenue sharing program. Having a salary cap limits the amount any one franchise can spend on their player salaries, therefore ... providing a more balanced league and better competition. The absence of a salary cap is what allows teams like the New York ... ...

  • Word Count: 3444
  • Approx Pages: 14
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5. Baseball Blues

... 01/31/2000 issue of Sporting News "Let's remember that the union continues to think a salary cap is the work of Satan. (p54)" The latest strike has really stirred things up and could have ended the way baseball is played for years to come. America did not really need baseball fighting each other on how many millions of dollars people should be given, while the ... should be free agents. The way that free agency is set up, is a big factor to the overpaid players in baseball. To be a free agent right now, a player has to already have five years of major league baseball experience. The way...

  • Word Count: 859
  • Approx Pages: 3
  • Grade Level: High School

6. Up, Up, And Away

... and no limit is set. However, the fact that there is a salary cap does not necessarily change the high wages of the players. For example, in 1998 Barry Bonds of the San Francisco Giants signed a two year deal worth $11.5 million dollars. That is 5.75 million dollars a year! In 1997, the salary cap for the NBA was $24.4 million, and the average salary was $2.2 million. In Major League Baseball ... , the average salary was about $1.4 million a year (Turner). All of this money that these players are making just leads to more problems. When a person signs a ... big contract, it immediately b...

  • Word Count: 1355
  • Approx Pages: 5
  • Has Bibliography
  • Grade Level: High School

7. Culture of Athletics - Money and Fans

... World Series Championships throughout their existence (MLB). Since 1985, they have been at the top of the league in team payroll, at one point reaching over $200,000,000 (Graph of the Week). The MLB not having a salary cap has allowed the Yankees to attract and sign multiple big-time players. This organization is capable of affording all these players because they have the ... million more than any other team in the MLB (Statista). They can be considered the largest, most successful corporation in baseball, and it is no coincidence that they attract the most fans. From 2003 to 2008, Yan...

  • Word Count: 975
  • Approx Pages: 4
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  • Grade Level: High School

8. A Guide to the Troubles of Pro

... the economic structure of the game. (Zipay 1) The owners and players cannot get along with each other. The players and owners are like two babies fighting and arguing over a toy. In conclusion, Major League Baseball is plunging like water down a waterfall. To recap, a big problem with these annoying strikes is the owners wanting a salary cap and the players not wanting a salary cap because it would take away from their revenues. Also ... , the players competing for the highest paid athlete is an issue. Until all this madness ends, baseball will continue to get ... ...

  • Word Count: 1955
  • Approx Pages: 8
  • Grade Level: High School

9. Americas pas

... good players they are one of the greatest attributes of the NFL. The salary cap is each teams income on how much that they can spend building up players for their team. In other sports like baseball a team with the most money can't make a dream team that dominates the entire league by offering all the best players more money to play on their team ... there is hitting, fighting, and every now and then a team will run a trick play that could totally backfire or win the game for them. The biggest football game of the year is the Super Bowl. It is said that over billions of people tune in o...

  • Word Count: 673
  • Approx Pages: 3
  • Grade Level: High School

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