Today, former Washington National Bryce Harper agreed to a $330 million, 13 year contract with the Philadelphia Phillies. This is not only the biggest contract in baseball history, but the largest in the history of sports in North America. So good for Bryce Harper right? But bad for the future of baseball.
It’s the second year in a row that the free agency market has been slow. Many stars are still left unsigned, like Dallas Keuchel and Craig Kimbrel, and it wasn’t until the start of spring training that Manny Machado and Harper were signed. These aren’t ordinary baseball players, but the some of the best players in the league.
So what’s the problem? Is it that teams have money and don’t want to spend it? Or is it “much ado about nothing” as Rob Manfred, the Commissioner of Baseball said less than 10 days ago? The problem isn’t nothing and it isn’t rooted in teams not wanting to spend money, but with the owners and organizations who used to spend too much money.
Major League Baseball is the only major sport in the United States without a salary cap and because of that, it’s caused a huge obstacle for baseball that I’m not sure how they can overcome it. For the past 15 some years large market teams have been spending more and more money to get the best players on their team (that would be New York, Los Angeles, Boston, etc). Every year the teams with the largest revenue are dishing out hundreds of millions of dollars for the best players–raising the expectations of new free agents.
When the large market teams started hiking up their payroll, small/medium sized teams like the Kansas City Royals and the Houston Astros had to find another way to compete. They rebuilt their franchises by signing younger talent and developing stars through their farm systems. It took years to accomplish this but guess what? The Royals went to the World Series in 2014 and won in 2015, and the Astros won in 2017. After years of below .500 records.
Now large market teams see the value in doing the same. The Yankees no longer want to pay millions and millions of dollars for players when they can rebuild. And players expectations for what they are worth (rightfully so based on past years) aren’t lowered because these teams don’t want to pay it.
The fix? A salary cap put in place 20 years ago…if that had happened, contracts wouldn’t have grown to such an exorbitant scale, players wouldn’t have expected to be paid as much based on the previous trends and more teams would be able to compete on an even playing field.
For now? Commissioner Manfred needs to admit there’s a problem and work with Tony Clark, the head of the Major League Baseball Players Association to find a fix. Otherwise baseball in looking at a player strike in 2021.
I'm Calling it Shea 
Its never going to come from the owners, or Manfred – they’ll never let it happen. The players will strike in 2021 to get a cap & guarantee a percentage of the revenue (which will be at an all-time high at that point once gambling is legal in more states…MLB already has the deal in place w/ MGM). But its not really about contracts getting too big…they deserve to get even bigger. As baseball starts bringing in more money, owners should be forced to reward the players who are responsible for the games growth!
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How does betting help the team get revenue though? The states will make money from that not the teams. The revenue piece is interesting but small marketing team will never be able to compete with the larger markets if there’s a guaranteed percent of revenue. Every player will want to go to NYC, Boston, LA where the revenue is the largest.
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Well everyone should want to play in pinstripes…
The answer to that large vs small market disparity though won’t just be a cap, but also a salary floor. Small market teams would benefit more from floor, in addition to a cap (this is what the NBA and NFL does). You must pay a certain percentage of revenue, and if you pay under it, teams have to cut a check for the difference between that and the floor to all the players on your roster. So you either pay for a decent roster or you pay extra for nothing. Interesting stuff on this: https://blogs.fangraphs.com/mlb-players-ought-to-fight-for-a-payroll-floor/
And the largest slice of the gambling revenue pie will definitely go to the states. The MLB & the owners know this, and I’d be shocked if their deal doesn’t include an integrity fee of .25 – 1%. Most of the gambling revenue will come from increased fan engagement though via media rights & increased ticket/merchandise sales.
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