The most common argument in recent years in Major League Baseball (MLB) has been regarding the lack of a salary cap in the league. There is currently not a salary cap in the MLB, nor has there ever been, despite how many teams would benefit from it. The MLB is aware of what kind of positive effect a cap would have on the league, but the MLB Players’ Association (MLBPA) will forever be against it due the ability star players have in receiving some of the biggest contracts in the history of professional sports. The debate has been taking place for years, but many believe that there will never be a salary cap established in the league due to the agreement between the MLB and MLBPA made in the 1994 Collective Bargaining Agreement (CBA) that ended the strike of players in the 1994 season. Despite this, the debate will remain one that is constantly analyzed, since the MLB is the only professional sports league in America without a salary cap. Some argue for the establishment of a salary cap by using data from other leagues that do use the idea of a cap, or by using the opinions provided by executives around Major League Baseball. That said, the counterargument is also argued intensely, especially by the few franchises around the MLB that significantly benefit from the league’s lack of a ceiling. Due to the number of teams that are placed at a disadvantage due to free spending in the MLB compared to the amount that actually benefit, it is clear that it is time for a salary cap in Major League Baseball. 

A salary cap is something that prevents teams from spending an outrageous amount of money in player salaries. Many professional sports leagues in America have one, and Major League Baseball is the only one that does not. Many ask why the MLB still does not have one, as the benefits of a salary cap can be seen in the other leagues around America. The reason for this is that, while most owners in the MLB are all for a cap, most players are strongly against it as it would most likely lower all their levels of pay. The MLB is unable to just say sorry to the players and establish one anyways, as it and the MLBPA came to an agreement after the players’ strike in 1994. The owners eventually folded in the agreement and did not implement a hard cap, but it did restructure certain areas of player salaries and free agency. The agreement is over 20 years old, and more agreements have been made since between the two parties but none involving a salary cap. 

 The Major League Baseball season in 1994 ended abruptly on August 12, as the MLB players decided to go on strike in protest of the 1990 Collective Bargaining Agreement (Corcoran). The strike lasted 232 days, which was the longest work stoppage in any professional sport at the time, and caused over 900 games, the entire postseason, and the World Series to be cancelled. Most of the owners of the MLB had been striving to implement a salary cap in the league for years, and as their efforts failed some owners even began to collude against free agents to try and minimize spending in the 1985-87 seasons. The owners’ collusion was discovered, and this resulted in an immediate growth in player salaries, which caused a sudden and clear gap between teams located in large markets versus those playing in small markets. Revenue-sharing became rather obvious to all at this time, but the owners and commissioners were adamant on including a salary cap into any new revenue-sharing proposal, “and it was that issue on which neither side would budge in 1994,” (Corcoran). The 1990 CBA was set to expire in December of 1994, so the players decided that early August was a good time to go on strike so an agreement could be made by then, and the players also hoped the date would help them be able to get back on the field for the late regular season in September. The players went on strike expecting it to end the same way each of the seven previous work stoppages in the MLB had ended, with the owners caving first and giving in to the players’ wants. But, this particular situation took a different path. 

The owners of the MLB surprised the players and the MLBPA in 1994, by forming a unity between almost every owner in the MLB. The tables hypothetically turned against the players when it was discovered that many of the MLB’s owners were in agreement that they would rather cancel the rest of the 1994 season and the entire 1995 season before they would agree to continuing without a salary cap in the MLB. In late December of 1994, the owners declared in impasse in the negotiations and did actually establish a salary cap (which never went into active effect), as well as other major changes to the game when it came to salaries and free agency. Soon after the calendar flipped to 1995, the MLB’s owners announced games would be played with players from the minor leagues and non-union Independent leagues. 

Spring training exhibition games were played by the replacement players in 1995, to which the MLBPA of course did not support. The players got the National Labor Relations Board (NLRB) involved, and the NLRB found the salary cap implemented in 1994 to be illegally imposed. The salary cap was retracted by the owners in February, but the players still did not return from strike. After the owners hired these new players for the exhibitions, the NLRB filed for injunction against the owners for unfair labor practices. This injunction was approved by US District Judge and future Supreme Court judge Sonia Sotomayor on March 31 of 1995, and the players returned to the game less than a month later on April 25, 2995 (Corcoran). 

The reason many are in favor of a salary cap in Major League Baseball is because of the significant advantage that wealthier teams have over those that play in smaller markets. Regardless of a team’s success, the market the franchise is located in is very influential over their ability to spend in large amounts. Since there is no salary cap, teams can spend as much as they please on star players, so teams in bigger markets tend to have a more powerful roster because they can go after the bigger players. 

When referring to “big market teams” that take advantage of their higher level of revenue, the New York Yankees are normally the top team to call out. An example of the Yankees partaking in big spending is their signing of star power hitter Mark Texiera in 2009. The Yankees gave the slugger a deal of 8 years, worth $180 million, one of the largest contracts in Major League history at the time and currently the 18th largest in MLB history (Bloom). This contract was made even more significant as it came soon after the club had signed ace pitcher CC Sabathia to a 7-year deal worth $161 million. The two contracts totaled over $340 million, which is higher than many teams are able spend on their entire roster. Soon after the signings, Barry Bloom of MLB.com reached out to the owner of the Milwaukee Brewers, Mark Attanasio, to ask him for his opinion on the signings and the lack of a salary cap in the MLB. Attanasio replied with, “At the rate the Yankees are going, I’m not sure anyone can compete with them. Frankly, the sport might need a salary cap.” The Yankees are not in the wrong with their high level of spending, as it is perfectly acceptable in the current system. There is a threshold on player spending, not a cap, and exceeding the threshold only results in higher taxes, which the large market teams are obviously able to pay along with their large contracts. Attanasio addressed this by saying, “[The tax] doesn’t seem to stop them. But I do not blame the Yankees, I blame the system. The Yankees are playing within the rules of the system… You can’t blame the team so you have to change the system… I’m sure they’re working within their economics.” Along with Attanasio, Crane Kenney, a chairman for the Chicago Cubs, also agrees that the system must change: “I have no problem with what they’ve done. They’ve done it within the confines of our agreement… they’ve got a $1.3 billion stadium coming online. They were probably relying on Wall Street to fill a lot of those seats.” The statements from Attanasio and Kenney make it clear that while some teams are clearly at a major advantage over others, they are playing fair within an unfair system that must be fixed with the establishment of a salary cap (Bloom). 

Major League Baseball is the only professional sports league in America without a salary cap. This makes them unique from other leagues, such as the National Basketball Association (NBA). One of the NBA’s franchises is the Miami Heat, who are based in Miami, Florida where there are no income tax laws (FindLaw). This is significant, as in 2011 the Heat became basically the Yankees of the NBA based on their spending. The Heat signed all-star small forward Lebron James that year to a significant contract, as well as signing another all-star in Chris Bosh and resigning their star Dwyane Wade. Each of these three contracts given out by the Heat were incredibly pricey, and many wondered how they could sign all three stars. The lack of income tax in Florida made the team able to offer the players contracts of less money than what was being offered to the stars from other teams. Lebron James toyed with offers from many teams other than the Heat, such as the Chicago Bulls and Los Angeles Clippers. While the other teams offered him more money, he decided to sign with the Heat to avoid the income tax he would have to pay if he signed with the other teams. Signing with Chicago would have costed Lebron $3 million in income taxes, and Los Angeles would have caused him to have to pay over $10 million in income taxes. Taking advantage of the income tax laws gave Miami an advantage over the other teams so they could offer less and stay within the salary cap, and Florida teams are not the only ones that would be able to similarly benefit if a salary cap was enacted in Major League Baseball (Engler).

There are seven states in the country that do not collect income tax: Florida, Alaska, Nevada, South Dakota, Texas, Washington, and Wyoming (FindLaw). Of those states, Major League Baseball has franchises in three of them, and five teams total throughout those three states. Of the five teams, the Miami Marlins are the only one considered to be in a large market, and they showed off their ability to spend by signing Giancarlo Stanton to the biggest contract in MLB history of $325 million over 10 years. If a salary cap were ever established in the MLB, the Marlins, along with the Texas Rangers, Houston Astros, Seattle Mariners, and Tampa Bay Rays would be able to benefit similarly to how the Miami Heat did when signing their “Big Three.” This would be the only kind of spending advantage available to Major League teams under a salary cap, as every team in the league would be capped at the same amount, but players signing with these teams would get the absolute most out of their contracts instead of paying income taxes, giving the contracts maximum value. If the MLB ever did establish a salary cap, it is possible that they would include a clause to lower spending abilities for these franchises to even the playing field. Even if a clause were not implemented, a salary cap would make the league much more even than its current status, and the size of the market a franchise plays in would not affect its ability to freely dish out large sums of money. 

While many are in favor of a salary cap in Major League Baseball, there are of course many that are very content with the league the way it is and are very against a cap. An article posted to Fox Sports titled Why a Salary Cap is No Solution, many alternatives are given that would possibly help even the competition in the MLB, as well as ideas on why salary caps are not as effective as some believe them to be. The article claims that it is not a salary cap that is needed, but rather a restructure of the MLB’s revenue-sharing model. It states that a higher percentage of net local revenues must be shared, and not necessarily used towards player salaries but rather recruiting academies around the world, higher quality scouting staffs, and higher quality minor league instruction. While it is true that a higher portion of revenue sharing could be spent on these things and positively affect the league, it is still inevitable that the larger market teams will be able to spend more on the results of what the shared revenue went to. Even if the Yankees share twice the amount of revenue than any other team, they are still in the heart of the biggest market in America. As the improved talent enters the league, the Yankees would still be able to pay the new players a good amount more, and as more money is spent on better players, the team will begin to make more off merchandise, ticket sales, and overall direct revenue from the fanbase so they can become closer to the new star players. 

Something that the Fox Sports article also states is that a hard cap would simply be “transferring wealth from millionaires (players) to billionaires (the owners),” (foxsports). This is not completely true. While a salary cap would inevitably lead to a good deal of savings that the owners would be able to collect, the argument is not because anyone is getting too wealthy. The argument regarding a salary cap in the MLB is simply to even the competition between teams. From the perspective of one that loves the game of baseball, I do not really care how rich any franchises owner is or how rich any player is. I enjoy following the mega deals handed out by clubs these days, and a hard cap would prevent that from continuing, but it would nearly completely even the playing field between every Major League team, leading to better competition in what actually matters, the game itself. I would much rather see intense late inning games or stressful playoff races than I would Alex Rodriguez receive the second and third highest contracts in Major League history. While a hard cap would take some wealth away from players and give it directly to owners, that is no issue. The players and owners are all wealthy, to the extent their wealth reaches is irrelevant to me. A salary cap in baseball would cause the competition in the game to become significantly more even, which is something hopefully every baseball fan wants to see. 

It is commonly said by many that Major League Baseball’s owners will never come to an agreement with the Major League Baseball Players’ Association regarding a salary cap, and that the league will never see one. Thus, the debate may live on forever. That said, there are major changes that must be seen in the MLB, and a salary cap would take care of many problems in the league. The lack of competition that some teams bring can be seen in every professional sports league, regardless of if the league has a salary cap or not. But the MLB provides a lower amount of competition league wide compared to the NBA and the National Football League, two leagues with salary caps. With the establishment of a salary cap, Major League Baseball would see much tighter competition, which is something any true fan of the game would love to see.
