In the Best Interests of Baseball?

With the advent of free agency in the mid 1970's, the owners of Major League Baseball teams found themselves having to share a bigger piece of their wealth with the players that put on the show. After the 1979 season, starting pitcher Nolan Ryan became the first player to earn a million dollars per year. Just six years earlier, Hank Aaron was baseball's top earner at $200,000. Minimum salary as of the last collective bargain agreement is $325,000 per year.


Since then, the average major leaguer makes about $2.3 million. Player salaries rose exponentially throughout the 1980's and 90's, reaching their peak when the Texas Rangers signed shortstop Alex Rodriguez to a 10-year, $252 million contract before the 2001 season. That same year, owners claimed their teams were operating on a deficit due to the lucrative contracts that they themselves handed out. Essentially, they said they needed to be saved from themselves.

In 2002, team owners and the players' union agreed to a new collective bargaining agreement that implemented a luxury tax on teams whose player payrolls exceed a certain threshold. It also expanded a revenue sharing program that was put in place in 1997. These are supposed to restore competitive balance in baseball (read: "We want the Yankees to lose and stop taking our players"). In other words, the purpose is to curb free-spending and give small market teams a boost by giving them more spending money.

The CBA failed on all fronts. Big market teams are still posting record-breaking payrolls, and the same teams that showed no promise five years ago are still dead-last with no forseeable end. This is due of course to the flawed system. The best example of this is with the Florida Marlins. In 2005, the Marlins received $31 million in revenue sharing while posting a player payroll of $56.3 million. This year they are expected to receive even more in revenue sharing, but their payrolls stands at $15.9 million. In other words, the 14 teams that put money into the revenue sharing fund are paying the Marlins' salary in full, with plenty more to spare.

However, the Marlins aren't the prime example of revenue sharing being abused; they're expected to be competitive down the road, and entering today are in a virtual tie for second place (albeit with a losing record) in the NL East. The biggest offenders are the Pirates and Brewers, two teams who haven't had a winning season in ages.

The problem with revenue sharing as it stands is that it's flawed on many fronts, including the very definition of big market and small market. If the Yankees suddenly decide that they want to rebuild and trade away their big contracts as the Marlins did last season, they could be considered a small market team (well, not really; they rake in $50 million in TV revenues from the YES Network alone). Even without the use of payroll as a definition for market size, the system is off-balance. The Boston Red Sox are considered a big market team, nothing wrong with that. The Greater Boston metro area has a population of roughly 5.8 million. The Florida Marlins are considered a small market team despite being located in the South Florida metro area, population: about 5.4 million.

Here is a great article written in 2002 by Keith Woolner that points out the many inherent flaws of the CBA and proposes remedies. The chances of this program being approved by either side of the bargaining table are pretty remote, but it's like the New York lottery: "Hey, you never know."