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February 19, 2004

A Modest Proposal
by Larry Mahnken

How can you root for the Yankees? It's like rooting for United States Steel.
-Jimmy Little

It's really easy to hate the Yankees, and it's really easy to understand why. It's not just that the Yankees win, but the fact that they consider anything short of winning the World Series a failure. It's the fact that they can spend $60 million more than any other team and still turn a profit, and they have no qualms about spending that money. Is anything ever enough for the Yankees? What do they need to stop trying to get better, the best player at every position?

I think I can safely say that the answer to that is yes. And nothing short of that will ever be "enough" for the Yankees.

But that's pretty much how every team thinks. The difference between the Yankees and every other team is that the Yankees think they can actually get the best player at every position--and if given the opportunity, it's possible that they could have the best player at every position. And that above all other reasons is why people hate the Yankees.

There is, without a doubt, an unfairness in economics of baseball. The Yankees have certainly been well-run, but they also have access to a market twice as large as the MLB average. The economic imbalance needs to be corrected; doing so is in the best interest of the teams, the players, and the fans.

But what John Henry said yesterday was totally out of line. It was classless, whiny, and self-serving.
Henry, whose team failed to obtain Rodriguez from Texas in December, said in an e-mail response to reporters Wednesday that he is changing his mind on whether the sport needs a salary cap "to deal with a team that has gone so insanely far beyond the resources of all the other teams."


"One thing is certain the status quo will not be preserved," Henry wrote.

"There must be a way to cap what a team can spend without hurting player compensation ... without taking away from the players what they have rightfully earned in the past through negotiation and in creating tremendous value. There is a simple mechanism that could right a system woefully out of whack."


"Baseball doesn't have an answer for the Yankees," Henry said. "Revenue sharing can only accomplish so much. At some point it becomes confiscation. It has not and it will not solve what is a very obvious problem."
Henry is calling for a specific rule change to greatly lessen his primary rival's means of improving itself. But he's openly opposed to increased revenue sharing, which would take money out of his pocket, and put it into the pockets of some of his other rivals. But at the same time he calls for a system that doesn't lessen player compensation, despite revenue sharing being the only way that the Yankees' spending could be lessened without negatively impacting player compensation.

Unless, of course, he's talking about taking all of the Yankees' revenues from over the cap number and distributing it evenly to the players. But, I doubt that. More likely, he's trying to make it sound like he's trying to screw the Yankees, not the players. And maybe that's the case, but regardless of his intentions, he's calling for a rule change that screws the players.

John Henry, of course, owes a great debt to Commissioner Bud Selig, who rigged the sale of the Red Sox so Henry and his partners could get it, and has acted in a manner favorable to the Red Sox on a number of occasions, perhaps to the point of impropriety. Henry's email is one of the first shots fired in the battle over the next CBA, when the owners will, once again, try to get the players to agree to a salary cap. And once again, they will try to sell it to the public under the guise of competitive balance.

I cannot make this clear enough:

Salary caps do not promote competitive balance. The purpose of a salary cap is to cap salaries, and nothing more.

The NFL's salary cap has not created parity, free agency has (as well as many structural differences from baseball that cannot be imitated). The NFL's cap has promoted roster turnover, which keeps any team from staying good for very long, even if they don't win anything in particular. It's a very frustrating type of parity for most fans.

The NBA's salary cap has not created parity--only seven franchises have won titles in the last 24 years. Quite the opposite of the NFL, it's largely inhibited player movement, though the sport's lack of parity can also be attributed to structural differences, like the ability of one player to completely dominate the sport, and carry his team all alone.

What a salary cap would do in baseball is bring the Yankees back to the pack, but it would do nothing to make the Brewers, Pirates and Tigers better, or even make it easier for them to contend for a title. It penalizes the Yankees with no other outcome that penalizing the Yankees.

And it takes money out of the pockets of the players--which in and of itself sounds good to most fans--but it puts that money into the pockets of the owners, who are less deserving of it. Which is, of course, why John Henry and the other owners want a salary cap--because they want to make more money without having to actually earn it.

A salary cap doesn't do what it's proponents claim it will do, and it results in an unfair transfer of money from players to billionaire owners who have even less need for it.

If one says they are for a salary cap, I will vehemently disagree with them. But if someone says they are for promoting competitive balance, then they are on my side. Nothing could be more American than the ideal that all teams are created equal, and that they are endowed with inalienable right to compete for a championship. Not necessarily win a championship, of course--that's taking it too far (would you like a system in which your team won once every 30 years?)--but certainly compete on a level playing field.

And how do you level that playing field? By making the incentive to win the same for every team; by rewarding every franchise on an equal scale when they run their franchise well.

Revenues shouldn't be directly linked to wins, they should be linked to a team's ability to make people spend money on them. The best way to do that is, of course, by winning ballgames, but you can also generate revenue by promoting the team agressively and intelligently, by seeking endorsements and partnerships, and innovating. The Yankees have done all those things, but they also play in New York. No matter how much or how little money they make, they should have to share some of it with others, because they have the advantage of playing in New York. Alternately, the Brewers play in Milwaukee, and no matter how much or how little they make, they should recieve revenue from the larger market teams, because they are at a disadvantage by playing in Milwaukee.

I'm not even remotely smart enough to figure out exactly how that should work, but that's the basic premise that revenue sharing should start with. The current revenue sharing plan, on the other hand, rewards failure and penalizes success. The more money you make, the more money you have to pay for revenue sharing; while making less money garners you a bigger check. The system is such a joke that during the late 90's the Indians, playing in one of baseball's smallest markets, were paying into revenue sharing, while the Phillies, playing in one of the largest markets, were taking out of it.

The incentive becomes to spend as little as possible on payroll, so that if you win, you make a huge profit from your revenues, but if you lose and don't generate very much money, you get a fat check from the Yankees to put you in the black.

It's why the Expos failed, and when they're gone, another team will exploit that system, and another, and another, and another. If nothing is ever done about it, there will always be a lower class in baseball that never tries to compete, and regardless of how competitive the upper class is, that's simply unfair.