Posted by: Larry Smith Jr. | January 23, 2010

Marlins Put On Notice and Spend Money

The Union is fed up.

At least that’s what it seems, with last week’s statement from the MLB, MLBPA, and the Marlins coming down and then shortly thereafter watching as the Marlins gave Josh Johnson a four year, $39 million deal and avoiding an arbitration case with Second Baseman Dan Uggla by signing him for next year with a $7.8 million agreement.

Putting aside for a moment whether or not either player is worth the amount they will be paid (in this writer’s opinion the answer is:  Probably on Johnson, probably not on Uggla), the fact that this statement was made and was apparently made with such force that we’ve seen close to immediate action, is wonderful for baseball.

The MLBPA has seemed to receive increasing amounts of scorn and distrust from the general public, in part for its role in fighting drug testing and in part because player salaries have escalated to a point where even players making the league minimum are generally making 3 to 5 times more than even the most well off of fans.  As players have moved from being on par, financially, with their consumers to being on equal footing with the upper class of consumers, to now being far more well off than virtually every consumer, support for their mission and their cause has waned among the public dramatically.

The growing scorn directed at the MLBPA has concealed the fact that owners are still making money hand over fist at a rate many times that of the players, and taken the focus off of this fact.  And as the roar and echoes from the fan base for a salary cap in the face of the Yankees extraordinary spending — Especially following a year in which they win the championship — Ring louder this year than ever before, and seem to increase with each passing year, it would do all parties well to stop and look at the landscape for a moment and see what’s really going on.

Even as someone of the anti-salary cap position, even I both understand and agree that the Yankees are a problem, in terms of how they spend.   The separation between them and the second highest payroll team is gigantic.  For example, in 2009 the Yankees opening day payroll was roughly $201.4m.   The Mets were second at $149.4m.   The difference between the Yankees at #1 and the Mets at #2 is greater than the difference between the Mets at #2 and Seattle at #10.   There were three teams — Pittsburgh, San Diego, and Florida — Whose entire payrolls were less than the difference between the two teams.    2008 tells a similar, if more dramatic story.   The difference between the Yankees $209.1m at #1 and the Tigers $138.3m at #2 was greater than the difference between the Tigers and the Padres, who were 19th in player payroll in 2008.   In 2008, there were 11 entire teams whose payrolls were smaller than just the difference between New York and Detroit.   Clearly, there is a problem there.

However, I would argue that the true problem in the structure in competitive balance is not at the top of the scale, but at the bottom.   Part of my opposition to the salary cap — Beyond the fact that I think it punishes strong organizations and/or decisions by forcing them to constantly create unnecessary turnover, among other things — Is that beyond the Yankees I do not believe that there are any teams that are out of control.   I fail to see how a payroll in the range of $138m, like the ’08 Tigers, or $149m, like the ’09 Mets is dramatically out of hand.   Others may differ in what they consider to be way out of line, but those numbers, while on the high end, don’t seem — relative to owner wealth — To be so outrageous.   Consequently, it seems to be very much self-defeating as a league to essentially create a rule and policy designed to stop one team, when there a few checks and balances in place (luxury tax, three tiered playoff) in order to curb the influence of that one team.

At the bottom of the payroll scale though, things are truly pathetic.   Baseball is the second most popular team sport in America and Bud Selig never passes up an opportunity to talk about how great revenues are for the business, yet in 2009 there were three teams below the NHL (yes, NHL) salary cap and one team (yes, the Florida Marlins) that was below the NHL salary FLOOR.   In 2008, there were five teams under the NHL cap and again, only the Marlins were under the NHL floor.

In the interest of fair and full disclosure, the NFL is a higher revenue league and there were 3 teams over the ’09 NFL cap and 7 over the ’08 NFL cap.   Of course, I would argue that the NFL cap is incredibly low relative to league revenues, especially with the expanded degree of revenue sharing that they have compared to MLB, but for those looking for a counter-argument, there it is.   I would also argue that the MLB is closer to the NFL both in relevance and revenue than it is to the NHL.   Also of note is that the NFL has a larger roster and the NHL has a smaller one.   Further, the NFL has a much more equitable revenue sharing scheme — One that I think the MLB could learn from and is probably their biggest area of opportunity in doing the best job with putting teams on more even ground with regard to the ability to spend on talent.

I am generally of the frame of mind that it really is not acceptable for the owner of a major professional franchise to be unable to support at minimum an $80m payroll.  I’m no businessman, and I am not educated in the minute details of team revenue streams, but I am going to have a hard time buying that just because Pittsburgh isn’t a market the size of New York, they cannot generate enough revenue to field a team that can compete with Colorado (a lower middle revenue team in the mid 70m’s).   Consequently, I’m generally disinclined to feel sorry for teams who aren’t at least in that neighborhood of spending, particularly when they cry poor at the Yankees.   Due to manner in which championships are awarded in major league baseball, there are 25 teams in the league that are not truly in direct competition with the Yankees for most of the season.   To my sensibility, it seems that only the Red Sox, Orioles, Rays, and Blue Jays have a true beef in their extraordinary spending, as they have to compete with it for 162 games, every year.

Having generated many paragraphs to pounding home the point that teams at the lower end of the pay scale absolutely must spend more when there is so much money being made on the game, you can count me in as one who was applauding the union for taking the Florida Marlins — The most egregious of these non-spenders — To task for their frugal ways.   Ironically, they’ve been able to put together competitive winning teams at low costs, which means either they aren’t too poor to compete, or they’re too cheap to put the final pieces on a winning cast.   In any event, this is the first volley in serving notice to the owners of the other cheap franchises in baseball — Clean up your act or quit crying poor.    The competitive balance problems lie primarily at their doorstep, and a twelve-step program to cleaning up your problem needs to have a step one somewhere along the line.

Post-script: I’m not necessarily of the position that spending money automatically leads to victories, and I’m a strong proponent of smart and efficient spending, which often times can lead to lower to medium payrolls.   However, I do think most of the foul crying on spending is almost entirely restricted to the Yankees when most teams don’t directly compete with the Yankees for a playoff spot, and I also think that in order to qualify for sympathy you have to at least put forth a passable effort in your own right.  Too often I think, that is not the case.

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