Another Cold War?
It's getting down to crunch time in the labor negotiations and another work stoppage seems more and more likely with each outrageous and inflammatory comment by Player Union Rep Donald Fehr and Owner's Rep Robert Manfred. The worst part about this whole episode is that it's not about players versus owners; it's all about George Steinbrenner versus Jeffery Loria. Everyone else is caught in the middle.
It's not specifically about those two, but the type of ownership each represents. Steinbrenner, for all his bluster, does everything he can to make the Yankees a winning organization. He explores every marketing possibility, he spends money lavishly to make sure he gets lots of quality people around him and throughout his organization, and takes pride in the continuing success in the organization. True, he has a huge market to work with, but it can not be said that he has simply rested on his laurels.
Loria, on the other hand, does nothing to promote his team and in fact does plenty to alienate his market. He does nothing to promote competence within the organization, instead actively breeds crony-ism at all levels of management. He cuts payroll at every opportunity and the only time he's ever taken on salary was to extort a greater share of the ownership pie from his minority partners. In two cities, he has yet to do one thing to positively influence the direction of his organization.
And as a reward, he wants George Steinbrenner's money.
THAT is what this whole "labor negotiation" is all about.
Look, no one wants a salary cap. The only thing caps do is create more jobs for salary cap consultants. We have a decade of NBA and NFL history as proof. And caps do not create competitive balance. The NBA had a cap in place for the last 10 years and two teams have dominated the game: Chicago and LA, largely on the strength of 2 players each. The NFL has had a cap, but because serious, season-changing injuries occur so frequently and because there are so few games in a season, it wouldn't matter what labor system is in place: any team could win. The Patriots victory in last year's SuperBowl is proof. At no position do they have one of the top 10 players in the game and at many positions they have some of the worst starters, yet they won it all. Injuries to the AFC elite teams allowed them to get into the playoffs, and luck, divine providence and faith got them the rest of the way.
So is a luxury tax, or as owner's negotiator Rob Manfred calls it, a "competitive balance tax", the answer? There are two major problems with the luxury tax. The first is that they don't stop teams from spending money. Baseball has had a luxury tax since the last work stoppage and yet team payrolls continue to escalate. The NBA instituted a luxury tax yet several teams surpassed it and even with their restrictive contract policies, NBA players are still signing record contracts.
The second is that they don't really help competitive balance. The Portland Trailblazers outspent everyone last year, yet were no where near the NBA finals. There have been numerous teams in baseball spend gobs of money only to be looking from the outside in at the playoff participants. On the flip side, the teams that supposedly benefit from the tax don't always spend the money they get (see Loria, Jeffery - Montreal Expos or Pohlad, Carl - Minnesota Twins). In fact, it's become an all-too familiar practice for the tax beneficiaries to simply pocket the extra dough instead of spending it on their team. And the luxury tax system itself makes it so easy to do so.
The tax is assessed after the season is complete. How does that help a team compete? The season is over. The time to add players is while your team is having a career year, not after it. What incentive is there to put the money back into the team after a surprising effort falls short? None, really. In fact, more often than not, adding a couple "key free agents" to team that was led by unexpected career years ends up as good money chased after bad. The Red Sox recent payroll history is a perfect example of this, adding numerous expensive mid-level talents (Jose Offerman, Dustin Hermanson, John Burkett, etc) after getting 'breakthrough years' from their own mid-level talents (Troy O'Leary, Trot Nixon, Carl Everett, etc).
In the end, the luxury tax destroys competitive balance because the majority of the teams end up as either an ongoing firesale (in an effort to maximize luxury tax income) or over-budgeted, under-talented contender wannabes. It penalizes teams that develop their markets and use money wisely and rewards those who are simply miserly.
Can Bud Selig be believed when he says that if things remain the status quo, that half the teams in the league will go bankrupt? Well, considering his long history of misrepresenting the facts, that's highly unlikely. In fact, just about everything he's said regarding baseball this past year has been proven untrue. His statements about the finances of the game have been totally refuted by Forbes magazine and the Twins and Expos "inability to compete" has been refuted in the standings.
Even his smallest of comments have been proven untrue. In a recent interview, he was given an opportunity to describe how much baseball means to him. He reminisced at length about the great moments in the game that he remembers first hand. One of which was that he remembered listening to Bobby Thomson Shot Heard Round the World that ended the 1951 playoff between the Brooklyn Dodgers and the New York Giants. He said he remembered listening to it on his little black and gold transistor radio. Too bad transistor radios weren't available to the public until 1954.
Look, if the owners don't know how to spend their money, that's their problem. In one of the most ironic moments of this whole season, Texas Rangers owner Tom Hicks vociferously complained to a reporter about cost-containment, saying if the players don't take this deal, he and the other owners will push for a hard salary cap. The irony is that he is the one who gave out a record breaking $252 million contract to Alex Rodriguez, which incited much of the recent explosion in salaries, and then signed Chan Ho Park, who everyone knew struggled outside of his old home park of Chavez Ravine for another $65 million, which is one of the worst contracts in baseball right now. The cherry on top of this irony sundae was that he was complaining about player salaries calling from his yacht off the California coast. Yeah, that ARod thing put him in the poor house, didn't it. Yet despite spending all that money, the Rangers still aren't out of the basement of the AL West.
So what would work? Here's my solution to save baseball:
Move the Montreal Expos to DC. Move the Florida Marlins to Orlando. Move the Tampa Bay Devil Rays to New York City. New York can handle 3 teams (at least) and the Yankees AL market could use some dilution, if only to make things interesting.
At a defined point in the offseason (January 1?) all teams to report their actual fixed income for the upcoming year - local and national TV contract, season ticket sales, etc - and each team submit half of that to a central fund, from which 30 equal parts will be divided and distributed among all the teams. Teams would still get all their own income from walk-up sales, concessions, parking, etc.
Lastly, make the big leagues more like fantasy baseball. Change the free agent bidding process from a secret closed bid process to an open one. All free agent bids must be submitted to the commissioner and be made public knowledge to the owners and players. All bids are final and legally binding, so no bidding just to keep a player off some other team. No one gets caught in a vapor (implied) bidding war and everyone knows who's overspending on whom. Eventually, each player will get the contract he deserves and the owners will have their cost containment, if only to avoid public humiliation.
Of course, given their current choice for leadership, the latter doesn't seem to be much of a concern.