After Deadspin was ruined by a bunch of private equity brosephs, a few of the staff writers founded another blog called Defector, who this week wrote what we all already knew, that baseball has a salary cap. The Yankees’ trade of Adam Ottavino solidified that earlier this week, as the team navigated the various paths to staying below $210 million. The CBT threshold isn’t a formal cap, but baseball as an institution acts like it is.
And of course, there isn’t a salary floor. The Pirates, after dealing away Jameson Taillon to those very same Yankees, only have $3 million in committed spending after 2021. Cleveland dealt Francisco Lindor and his $20-odd million dollar salary to the Mets, and are projected to open the season with less than $40 million in payroll. In fact, five of the 30 MLB clubs are projected to begin the 2021 campaign with payrolls under $50 million.
Herein lies the problem that the MLBPA faces, both in 2021 and as the collective bargaining agreement expires in December. The union has fought so hard against a formal salary cap, and yet MLB has collectively treated the CBT threshold as a cap, while letting the bottom end of payroll drop off. Cleveland’s Opening Day payroll is set to be the lowest since the 2012 Astros, and Pittsburgh isn’t far behind on that list. Meanwhile, the upper band of payroll hasn’t grown — teams at the high end were spending more a decade ago, and revenues have exploded since then.
There are a bunch of issues at the core of December’s CBA negotiations, from expanded playoffs to team control to the universal DH. In the end, it’s all a battle over spending, as players try and wrest a higher percentage of those ever-growing revenues. I’ve done a lot of writing about the MLB salary system, how to modify it on the player’s behalf, other models the league can work off of, and the new ways we consume the sport. All that thinking has led me to one inexorable conclusion: MLBPA needs to not just accept, but push for a salary cap and floor system.
December 2021 is perhaps the most important month baseball has ever seen. The league will be coming off two shortened seasons, ownership is already complaining about historic losses — though the only team with public books, admittedly, lost less than MLB would make you believe — and with a de facto salary cap already in place, the union needs to use the concession they’ve already made to their advantage.
The actual mechanics of a floor can vary. The NBA, with a hard cap of 44% of league revenue, plus player pension and benefits, mandates that 90% of the allotted cap space must be spent every single season. So for the 2021 season, with a cap of $109.1 million, every single team must pay at least $98 million in salaries. There are exceptions, and the NBA cap is a soft cap, where going over that $109.1 million carries financial penalties, but the players’ union knows exactly what share of the pie they’re getting.
Contrast this with a hard cap, like in the NFL. The penalties for going over the cap are much harsher, and in the NFL not every contract is guaranteed. The floor also works differently, on a cumulative basis. Teams must spend 89% of their allotted cap money by the end of each five-year CBA life, and cut a check to the NFLPA at the end of the period if they don’t. It’s worth noting that both the NFL and NBA are more financially successful than MLB while working out a guaranteed revenue splitting system.
Meanwhile, the NHL is less successful, but has a cap. The NBA may have smaller roster sizes than baseball, but both the NHL and NFL are either the same size or larger. Building a cap/floor system is possible in baseball, and half of it has been done already! The MLBPA has already ceded the initiative on this issue by allowing ownership the use the CBT threshold as a de facto gap. That genie’s not going back in the bottle.
A cap/floor system doesn’t solve all of baseball’s problems. It doesn’t fix the aging fanbase or cure blackouts, on its own it doesn’t change team control problems or pace of play. But MLB ownership has already implemented a cap, and is just being coy about the language of it. The union can push for a floor to level the financial playing field or continue to operate under the façade of a cap-free game, but only one of those options leads to more money for the whole workforce.