Glorious Article by Joe Posnanski on the Yankees advantage

[The_Admiral]

Not as much as watching Jeff Loria trot out the Ten-Cent Nine and pocket the revenue sharing.

[STL FANATIC]

Not as much as watching Jeff Loria trot out the Ten-Cent Nine and pocket the revenue sharing.

And I agree that that's worse than what Steinbrenner does. One, because within the current system there's nothing wrong with what Steinbrenner does. And two, because it's piss-poor form to pocket so much and spend so little if you're going to own a team.

But most guys fall in the middle, pocketing some but still spending a good chunk.

I'll note that I'd like any cap to also come with a floor.

[tp49]

I think that's pretty crummy, too admiral. It's not the issue at hand of course, but it's crummy. We talk about how great Steinbrenner is for putting his money into the club, but he drove his stadium through with public finances. (I see the Yankees listed at 1.1 billion in private financing as well, but it doesn't take that much to build a stadium, so I have no sympathy). The Cardinals (just as an example I know about) footed most of the bill for their stadium and that has certainly played a role in payroll cutbacks for a handful of years.

You mean to tell me the Cardinals didn't drive their stadium through with public finances either? Without going through all the math here (though I did do the math) St. Louis County contributed only roughly 5% less (based on the total stadium cost) then New York City did for the stadium (16.9% in NY versus 12.3% in St. Louis). Considering as well construction costs etc., in New York City are exponentially higher then they are in St. Louis you'd have to expect that even just based on that a stadium will cost more to build there even if you built the exact same parks in both places. Notwithstanding the extra bells and whistles each team wants to place in their park.

The benefit to financing your own stadium is of course that MLB allows the deduction of costs related to the stadium from the amount used to determine how much the team would pay into revenue sharing.

[The_Admiral]

Here are some excerpts from Baseball Between the Numbers, "Does Baseball Need a Salary Cap?", taken from this ESPN excerpt with a little bit transcribed myself. Please buy this book because they're smarter than we are and have a lot of interesting things to say. I'd like to know what you guys think about this angle. I'm pretty much in agreement with most of this.

http://sports.espn.go.com/espn/page2/story?page=betweenthenumbers/salarycap/060405

Arguments about salary caps and revenue sharing always come down to competitive balance. When owners were pushing a cap in the runup to the 2002 labor wars, they made sure to sell it as a means to restore, in Bud Selig's famous words, the fans' "hope and faith" that their team could have a shot at a pennant. "Perhaps 12 of 30 Major League teams have any possibility of reaching postseason play, and fewer still have a realistic hope of winning a pennant," Padres owner John Moores wrote in the Wall Street Journal shortly after his team had, ironically, reached the World Series. "Unless baseball changes the way it does business, it risks seeing its fans drift away, tired of their teams' futility."

Of course, in any given year, most teams won't come close to making the playoffs. A more significant measure is whether poor revenue potential is locking teams out of pennant races for years at a time. The numbers here are less clear: Since the expanded playoffs began in 1995, twenty-two of the thirty big league teams have reached the postseason at least once; two of the remaining eight, the Phillies and Blue Jays, had just met in the final World Series under the old setup. Compare that to baseball's "golden age," when the Phillies once went thirty years without finishing higher than fourth while teams like the St. Louis Browns and Washington Senators rarely even sniffed a pennant race.

That said, the Yankees are one of two teams never to have missed the postseason under the current system (the Braves are the other). If we chart postseason appearances against average team revenue, we find that a little more than half of getting to the postseason is determined by team revenue.

But there's a problem here. High revenue may help lead to the postseason, but postseason appearances increase revenue as well. Not only are playoff tickets a lucrative item, but a winning team typically sees regular-season sales soar. To avoid this dilemma, we can compare postseason appearances not with revenue but with TV market size. Beyond the obvious -- you really don't want to play in the tiniest markets, or in Canada -- the correlation between market size and playoff appearances is extremely weak. What explains the Cardinals' or the Indians' success, or the Phillies' lack of it? Market size accounts for 11 percent of the cause -- meaning anyone who's tempted to place bets on division winners based solely on TV market size is kidding himself.

Regardless of how big a problem you consider competitive balance to be, there's still the question of how it would be affected by a salary cap. As we've seen, a hard cap is an effective way to stop high-revenue teams from spending as much money as they'd like -- and even a soft cap like the luxury tax can hwlp put on the brakes. But what if your team isn't near the cap? You have no reason to spend more on players: if that new left fielder wasn't worth $10 million a year to you before, you're certainly not going to think he is now. In fact, you might now be willing to pay less for him. Since the big spenders over the cap are out of the running, there are fewer teams eligible to bid on his services, meaning you have a better shot at lowballing him on salary. Even if it lowers salaries across the board, a soft cap doesn't eliminate the hierarchy of revenues. The teams that can afford to pay the most in luxury taxes will still have their pick of players.

There are only two ways, then, that a spending cap could conceivably improve baseball's balance. One, if the big-spending teams were brought somewhat down to earth, it might increase the number of teams in ocontention and thus increase the number of teams willing to invest in high-priced talent to get them over the hump. It's a bit early to tell if there's any evidence of this happening since 2002, but if so, the impact is minimal. In any case, it would still do nothing to promote spending among second-division teams.

The other possibility is that if you depress salaries far enough, you eventually get to the point where no teams are priced out of the market for any player -- even the Kansas City Royals could fit Barry Bonds into their budget at $100,000 a year. Of course, long before you arrived at that point, you'd have Don Fehr lead a picket line around your house.

The usual union-friendly suggestion for forcing lower-echelon teams to spend on payroll is a "salary floor," a minimum team payroll to match the maximum imposed by a cap. The NBA and NHL currently have salary floors in place. While this would certainly encourage spending, it might not be the kind of spending you want. It's arguably more effective for rebuilding baseball teams to throw money into scouting and player development in the short team, then inevest in payroll only when they have players worth spending on. Any system that would encourage irrational spending sprees such as the Devil Rays' run a few years ago wouldn't be helping matters.

There are plenty of ways to encourage competitive balance that have nothing to do with revenue. The player compensation draft for free agent losses, the one memorable for making Tom Seaver White Sox property, was one short-lived mechanism, as was the never-adopted suggestion that all foreign players be subject to the draft, preventing wealthy teams from grabbing the best Latin American talent with big signing bonuses. For that matter, if "hope and faith" for every team is the goal, you could give a 20-game head start to any team stuck in a below-average media market. Or you could pick teams by lot and hand the trophy to the first name out of the hat. But at a certain point, this sort of balance defeats the purpose.

This is why as many fans hate the salary cap as yearn for it. The more complex the arrangement you devise to level the playing field, the more it feels like the winners are those who can game the system. Ultimately, baseball requires as many losers as winners. Short of having four or five World Series a year, some teams are bound to go for generations without winning the big prize. "Hope and faith" is a nice idea and a great public relations slogan, but the cure shouldn't be worse than the disease.

[STL FANATIC]

I think that's pretty crummy, too admiral. It's not the issue at hand of course, but it's crummy. We talk about how great Steinbrenner is for putting his money into the club, but he drove his stadium through with public finances. (I see the Yankees listed at 1.1 billion in private financing as well, but it doesn't take that much to build a stadium, so I have no sympathy). The Cardinals (just as an example I know about) footed most of the bill for their stadium and that has certainly played a role in payroll cutbacks for a handful of years.

You mean to tell me the Cardinals didn't drive their stadium through with public finances either? Without going through all the math here (though I did do the math) St. Louis County contributed only roughly 5% less (based on the total stadium cost) then New York City did for the stadium (16.9% in NY versus 12.3% in St. Louis). Considering as well construction costs etc., in New York City are exponentially higher then they are in St. Louis you'd have to expect that even just based on that a stadium will cost more to build there even if you built the exact same parks in both places. Notwithstanding the extra bells and whistles each team wants to place in their park.

The benefit to financing your own stadium is of course that MLB allows the deduction of costs related to the stadium from the amount used to determine how much the team would pay into revenue sharing.

Where are you pulling your numbers?

But that said, I'm willing to admit I may be wrong and don't know the whole story about how these finances worked. It's a very minor part of argument...in fact, not really at all, just a side note.

[STL FANATIC]

Reading the excerpt hasn't convinced me of anything so far Admiral. I am interested in the book however.

[The_Admiral]

What don't you agree with?

Unless there's been a second edition since I bought it (late '06), the stats stop at the 2005 season, but the essays are still good. I particularly enjoy "How Much Does Coors Field Really Matter?" and "Why Doesn't Billy Beane's Work in the Playoffs?" The nice thing about essays from the BP guys is that they genuinely seem to ask a question they don't know the answer to and then arrive at a conclusion, whereas most sportswriting only asks questions rhetorically.

[STL FANATIC]

I disagree with their conclusion. They didn't PROVE the "cure was worse than the disease" they simply made some arguments and drew that conclusion. I've made other arguments and drawn a different one.

You don't see many NHL and NBA teams going on spending sprees just to meet the floor. You see stupid signings of course, but those teams are generally jumping well beyond the floor.