Columns

Weinstein ’17: Why MLB Needs a Hard Salary Cap

By
Opinions Columnist
Tuesday, March 31, 2015

Opening Day is next week, but it’s unlikely anyone will be taking me out to the ball game this year. That’s because average ticket prices have increased from $14.94 in 1998 — when a player signed a $100 million contract for the first time — to $27.93 in 2014, adjusted to 2014 dollars. While prices vary greatly throughout the season and between teams, the fact is it’s more expensive to see a live game than it used to be. A family trip to the ballpark can easily run above $100, making major league baseball inaccessible even as a special treat for many families.

Since the 1994 players strike, player salaries and payrolls have increased dramatically. Pitcher Kevin Brown became the first player to sign a nine-figure contract, inking a seven-year, $100 million deal with the Dodgers in 1998. Two years later, Alex Rodriguez signed a 10-year, $252 million contract with the Texas Rangers, making him baseball’s highest paid player until the Miami Marlins committed $325 million to outfielder Giancarlo Stanton over 13 years last November. The league’s average salary has nearly doubled from $2 million in 1998 to $3.8 million last year, adjusted to 2014 dollars, according to ESPN.

As salaries have increased, so too have payrolls. In 1998, the average opening day payroll was $59.5 million in 1998 compared to $115 million in 2014, in 2014 dollars. According to a study by the Harvard Sports Analysis Collective, the Gini coefficient — a tool economists use to measure inequality — of MLB team payrolls has increased since the mid-1990s. Payroll isn’t destiny, but it makes a big difference. Teams like the Rays and Athletics can’t afford the big-ticket free agents commonly found in Yankee or Dodger uniforms.

Some, like Ben McGrath in the New Yorker and Jonathan Mahler in the New York Times, have commented on baseball’s declining importance in American culture, even if the league remains profitable for now. Some see the slow pace of the game as dooming it to irrelevance in the 21st century. More than any other American sport, baseball is self-consciously nostalgic and traditional. You have to grow up with baseball to understand and appreciate it.

In high school, I took my then-girlfriend, an Argentine, to a Chicago Cubs game at Wrigley Field. I loved every minute of it, and she asked to leave in the sixth inning. People watch baseball not just for pitch-and-catch but also for the strategy, the atmosphere and the tradition. The key to keeping baseball relevant is to keep it present in peoples’ lives. A big part of that comes down to ticket prices.

Of course, compared to 2014 average ticket prices of $84.43 for the NFL, $62.18 for the NHL and $53.98 for the NBA, according to league data from statistics company Statista, baseball is much more affordable. But what matters is not just relative affordability but objective affordability.

If baseball is to thrive economically and culturally, it needs to reach a new generation of fans and potential players. Taking kids to professional games is one way of doing that, since baseball fandom is especially dependent on watching live games. Already, the MLB is suffering from the disappearance of one kind of diversity: The percentage of African-American players has declined from about 18 percent in the 1970s and ’80s to less than half that figure today.

Baseball would benefit if the owners agreed to a hard salary cap and lower ticket prices. While this would mean players would have to sacrifice some earnings either now or in the future, it would prevent a cap from transferring revenue from players to owners. MLB players are already some of the world’s highest paid athletes, making much more money with much less injury risk than football players.

An agreement could work something like this: A cap in the $150-220 million range, with steadily lower ticket prices as television revenues continue to increase. It’s important the cap stay high for now, to avoid penalizing teams that have already committed a lot of money to players. But when Giancarlo Stanton’s contract, the longest in baseball, expires in 13 years, the league could move the cap even lower, or just let inflation eat at a solid cap. That way, a greater diversity of fans can enjoy the game and even have a little money left over for peanuts and cracker jacks.

Duncan Weinstein ’17 can be reached at duncan_weinstein@brown.edu.

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  • Tim

    Strong strong strong disagree here.

    Payroll as a percentage of revenue has decreased dramatically since the mid 90s. In fact, right now baseball is the only Big 4 sport with payrolls under 50% of total revenue. With the amount of money in baseball at this point in time, players should actually be making a lot more than they currently are. While I agree that ticket prices are far too high and should be lowered, take it up with team shareholders and MLB officials because the extra money is going into their pockets, not the pockets of players.

    http://battingleadoff.com/2014/04/16/mlb-players-salaries-share-revenues-laying-issues/

  • brandon rambo

    Disagree that a salary cap would lower ticket prices. Never did for the nhl. However, strongly agree baseball needs a cap, or at the very least a luxury tax with some teeth (say $140 million threshold, with a 50% penalty for going over) because it’s what’s best for the sport. Any reasonable person would agree payroll disparity completely unfair. Life is unfair,sports shouldn’t be