Do We Need a Major League Baseball Salary Cap?

Do baseball players make too much money?

Major League Baseball Salary Cap

In case you’ve missed it, baseball players make ALOT of money. Major League Baseball salary cap virtually doesn’t exist. It’s what makes baseball baseball in some ways. It’s what made “baseball money” a thing. But is it too much? How much is enough?

7 years / $217,000,000

 6 years / $195,000,000

13 years / $325,000,000

7 years / $215,000,000

These are some of the notably sizable contracts organizations have signed players for. I left the names out because the names don’t really matter, for reasons I’ll get to later. But if you couldn’t figure it out, in order they belong to David Price, Zack Greinke, Giancarlo Stanton, and Clayton Kershaw.

The Dodgers broke records this year for the money they spent on players. Their payroll came to about $298 million. But they’re not the only organization that broke financial records. Major League Baseball broke more records for revenue growth in 2015, growing by over $500 million. This brings their 2016 projections to $9.5 billion.

So why are the names not relevant? Because unfortunately in the big picture of billions of dollars, these contracts don’t represent people. They represent assets in the form of human beings. It’s illogical to say that baseball players make too much, just like it can be illogical to say that the mortgage on your rental property costs too much. If you’re renting out your property and it’s bringing in more revenue than it’s costing, that’s called profit. A property in Los Angeles is worth well more than that same exact property in Denver. You can’t say it costs too much if it’s making money. Supply & demand. The market determines price & worth. With MLB being at $9.5 billion and teams reaching billion dollar valuations, I promise you these execs aren’t stupid. If they’re paying Zack Greinke $200 million, they’re set to make way more than that.

But cops and paramedics only make “blah blah” and they save lives. Stop with that argument. Enroll in an economics class next semester. Which do you think is harder to find, people than can perform CPR or people that can finish an MLB season with an ERA never rising above 2.0? Obvious answer here. I’m not trying to disrespect the work of paramedics, but you have to understand what people get paid for.

So what’s the basis for people saying “baseball players make too much money?”

The major discrepancy here is that some teams spend $298 million, and others are at $80 million. You’d think this would make for a pretty unlevel playing field, right? Certainly there are advantages of being able to spend big, but it’s not as big as you’d think. We all know baseball is a unique game. If the NBA had one team spending $300 million vs another spending $80 million, the higher payroll team would win 95 times out of 100. Baseball is a different story. You don’t need to look any further than this season, watching the Houston Astros with their miniscule payroll vs the big spending Yankees throughout the regular season and in the AL Wild Card game.

I don’t think we’ll see a Major League Baseball salary cap introduced anytime soon. Welcome to the new world of “baseball money.”