A Salary Cap For MLB?

A week or so ago, there was an article in the NY Times that made this argument:

• MLB should never have a salary cap, and the union should never allow it because it would denigrate the legacy of Curt Flood.

Nevertheless, I plan to suggest here that the upcoming CBA negotiations between MLB and the MLBPA should consider a new structure that includes a salary cap.  I do not think that denigrates the legacy of Curt Flood; the fact that his refusal to be traded away as a piece of chattel property led directly and exclusively to the free agency that exists in all major US sports cannot be changed.  No one else can ever claim that central position on the current status quo.  And just as baseball specifically – – and pro sports in the US more broadly – – needed to evolve from the model that existed in the 1960s and 1970s, so too can there be room for evolution from the current MLB model.

In terms of a financially successful sporting entity in the US, one needs to look no further than the NFL.  It has a salary cap; owners make a ton of money and players earn a ton of money.  The reason those statements are both true is that the NFL earns 2 tons of money and it is shared.  One could also use the NBA as an example of a sports entity where a salary cap exists and both owners and players reap benefits.  So, what sort of model might make sense for MLB and why?

Every NFL fan knows about “the cap” and “cap room” and the ceiling on player salaries that exists for every team.  What many do not know is that the NFL’s CBA also includes a “salary floor”.  It is an amount of money that every team MUST spend on player salaries, and it is there to prevent a team owner from taking the shared revenue money and pocketing most of it.  The salary floor is also a way to add to the competitive balance of the league and competitive balance is usually a positive contributor to total revenue.

The NFL’s salary floor is not a fixed number as is “the cap”.  For reasons that I cannot explain, the negotiators arrived at a formula for figuring out the teams’ salary floors:

• Every team must spend at least 89% of the seasonal salary caps on player salaries over a four-year rolling period.
• For the NFL’s fiscal  years 2020 – 2024, the total salary cap was $870.9M so the salary floor for those four years had to be in excess of $775.1M for each team.
• The NFLPA gets to audit the books regarding salaries and if a team were to fall short of spending for the floor, it must make up the difference in cash to the union who then distributes the money to players who were on the team roster during the years of the “under-spending”.

It may not be exactly accurate for every team; but for the most part, NFL teams have to pay the players on their rosters in 2025 less than a total of $279.2M and more than $$248.5M.  That is a very narrow window as compared to the disparity of player salary expenditures by MLB teams according to these figures for salaries committed to players on the 26-man rosters at Spotrac.com:

• Mets – – $298.0M
• Phillies – – $248.7M
• Dodgers – – $245.5M
• versus
• Nats – – $37.9M
• Marlins – – $36.7M
• A’s – – $31.4M

A salary cap and a salary floor would probably benefit MLB as an enterprise – – providing that the owners do as NFL owners do and share a significant chunk of total league revenue – – and a greater number of players will benefit as well because lots of “low-spending” teams will need to open up their wallets significantly.

The MLB average salary expenditure for the 26-man rosters at the moment is $115.0M  thirteen of the thirty MLB teams are above that average and seventeen teams are below it.  If as a starting point, one says that the average salary cost per team should not go up or down, and that there would need to be a 10-15% gap between the cap number and the floor number, that would mean the putative 2025 figure would be:

• Cap is approximately $121.9M
• Floor is approximately $108.1M

With the floor as stated above, fifteen teams – – half of MLB – – would need to increase their expenditure on player salaries.  Obviously, that sort of team disruption cannot be condoned meaning that there would have to be a ramping up period to achieve better salary equity across the league.  [Aside:  By the way, some of the more penurious owners may not want to spend in such a narrow window and might choose to sell their franchise to the delight of their fans.  Just saying …]

I do not think this sort of contemplation tarnishes Curt Flood’s legacy, nor does it do anything to negate his confrontation of baseball and its “reserve clause”.  To the contrary, what he did was to set in motion the change that happened to MLB in the 1970s which generated the economic conditions that exist today which can be optimized once again.  Thomas Edison invented the light bulb; the fact that we use LED bulbs today does not change that fact nor does it demean Edison and his work.

Finally, these words from Curt Flood succinctly summarize the basis of his fight with MLB:

“I’m a human being I’m not a piece of property. I am not a consignment of goods.”

But don’t get me wrong, I love sports………