Upon being reminded that all of the big-ticket free agents this offseason are shockingly — SHOCKINGLY! — going to large-market clubs with larger revenue streams, MLB Commissioner Rob Manfred this week at the Winter Meetings unwittingly admitted that baseball’s economic system is unfair.
Of the four biggest-money sports leagues in the U.S., only MLB doesn’t have any sort of salary cap — leading to a wild payroll disparity between the haves and have-nots that just doesn’t happen particularly in the NFL and NHL and to a degree in the soft-capped, loophole driven NBA.
“Do I deny that Tampa can’t sign a pitcher for $326 million? I don’t deny that; that’s a fact,” Manfred said, per La Velle E. Neal III. “Having said that, I think there are other areas in our system that allow those smaller markets to compete, and I think Tampa and Oakland [are] two good examples. Minnesota [is] another good one who takes advantage of those parts of the system and put very, very competitive teams on the field.”
Presumably, Manfred is referring here primarily to the draft and to MLB’s economic system that keeps young players on limited salaries for six years of team control — three years at or around the minimum, then three years at fixed rates through arbitration.
That certainly does help small market teams (though not so much players who don’t typically hit free agency until their late 20s at the earliest). But guess what?
All of those avenues are ALSO AVAILABLE TO HELP LARGE-MARKET TEAMS.
So the Yankees, who can’t just spend to infinity but certainly have more than twice as much revenue as the Twins to spend on payroll, can afford Gerrit Cole and a bunch of other big ticket guys in part because players like Aaron Judge ($6.4M arbitration in 2020) and Gleyber Torres (likely around the minimum because he’s not to arbitration yet) are also filling huge holes in their lineup.
I’m not saying the Yankees shouldn’t benefit from that part of the system, just as a millionaire shouldn’t have to pay more for a gallon of milk than someone making a small fraction of that.
But it would only be a true evener if fixed-cost young players were available to small-market teams in greater proportion than to large-market teams.
And the Twins? They could technically afford someone like Cole, but it would come at the expense of other things. (This is a rough comparison, but Cole’s $36 million a year annual value is about what Jake Odorizzi, Michael Pineda and Nelson Cruz will make in 2020).
So the Twins (and Rays and A’s) load up on young players and more modestly priced free agents. They work the system, and the did it well last year to the tune of 101 wins (at least until they were steamrolled by they Yankees in the playoffs).
Because baseball doesn’t have a salary cap, the Twins in theory can spend all they want. But the Yankees have more money to spend. They should since, you know, they took in $400 million more in revenue than the Twins in 2018 (that is not a misprint).
They can compete, but only to a degree and against a stacked deck.
Manfred basically spelled out that inequality, even as he was trying to defend how the system works.