Baseball: A Beacon for Capitalism

While the rest of the country has started leaning towards social programs to help redistribute wealth one sports league has stuck with capitalism.

The National Basketball Association, the National Football League and the National Hockey League all have salary caps that don’t allow team to spend more than a set amount to fill out the team’s roster. However, in the MLB there is no such cap.

It has been said many times that “baseball is as American as apple pie.” So it only makes sense that it would be the last sport trying to stay true to the economic system the founding fathers ingrained in the United State’s fabric.

Something just as American is either hating or loving the New York Yankees, the “evil empire” as sports talk show hosts have dubbed the big spending “Bronx Bombers.” A hate that is growing so strong fans are clamoring for a salary cap in baseball because it is a common believe that the lower payroll teams can’t compete.

Until recently there was no rule whatsoever to limit the money or to try to encourage equality between teams’ payrolls. But in 2003 the MLB set a salary threshold, which meant that a team whose salary was above the threshold had to pay a tax. The tax is only on the amount of money that is over the threshold, not the entire salary.

The tax threshold for the 2010 season was set at 170 million dollars, which was eclipsed by only two teams, the New York Yankees and the Boston Red Sox. In the first eight seasons with the luxury tax only fourteen times has it been eclipsed and only four different organizations have eclipsed the threshold; the Yankees all eight years, the Red Sox five years, the Los Angeles Angels and the Detroit Tigers each did it once. 

However, according to a New York Times study, since the institution of the luxury tax only once has the highest payroll (2009 Yankees) won the World Series. And only two other times has a team above the threshold won the World Series (Red Sox in 2004 and 2007). Overall the average payroll rank of World Series champions from 2003-2011 is 9.6.

The fact of the matter is the Yankees, Red Sox and other big market teams make more money than the other teams so they should be able to spend it however they choose. In order to even out the salary difference that is 143 million dollars teams like the Yankees would have to give money to the other teams, basically pay the competition to beat them.

In an era when teams in the middle of the pack payroll-wise have won seven of the last eleven titles that complaints just don’t hold water. Yes, the Yankees and others are always good, but they should be. Their fans have a higher demand for greatness from their team and are willing to spend the necessary money to support a large payroll, this is supply and demand at its finest.