MLB’s new streaming deal with Apple is why the Major League Baseball Players Association needs to scrap its entire bargaining strategy and go for a salary cap.
By proposing that the threshold for MLB’s competitive balance tax range from $238-$263 million, the union is asking to leave money on the table. Rather than snap this deal up immediately, which would enrich them greatly over the course of the next collective bargaining agreement, the owners instead came out on Tuesday and showed the players exactly why – even though it’s been anathema to the MLBPA for decades – a salary cap is in their best interest.
Under a salary cap system, players are guaranteed a percentage of league revenues. Under the system baseball has had, and that players are mistakenly pushing to continue, there’s no limit to what teams can spend. But, as the union has observed over the past several years, the CBT threshold acts as a cap. It’s not just because the penalties are too onerous. So long as clubs have an incentive to stay under a magic payroll number, they will.
Having a salary cap also means having a salary floor, and that’s where baseball’s biggest problems are, with the teams who simply do not spend, whether for the purpose of tanking or to make like the Rays or A’s and try to win by exploiting young, cheap talent. Because of those teams, even if the tax number is set at a fair point, the players are going to lose out on money because of what they’re not getting from those bottom feeders.
The problem at the top end is that with a hard number set as a tax threshold, soft cap, or whatever you want to call it, is twofold. One is that issue of payroll disparity continuing because of the lack of a lower boundary. The other is that if Major League Baseball opens new revenue streams, the players won’t see an extra cent, because their top pay level is basically locked in.
And that brings us to Tuesday, and the announcement of a streaming deal with Apple for exclusive streaming of Friday night doubleheaders (itself a lousy thing because it means, like the NHL’s deal with ESPN+ and Hulu, that a person cannot simply pay their cable bill and see all their team’s games), starting this season. With this, with gambling partnerships, with future local streaming deals, with any other ways that MLB finds for bringing in money, it won’t matter if the players are locked into a system where the top payrolls are in the $200 millions.
The tax is meant to prevent out of control spending, but becomes a cap. Meanwhile, there’s no mechanism for out of control profit-taking. The deal with Apple illustrates that: MLB could add billions of dollars to its bottom line over the next five years, and a static salary limit means the players won’t benot getting any of it.
Media deals give the owners a revenue floor. You can run a team as badly as possible, sell barely any tickets, alienate the local community, and you’ll still bring in millions of dollars before playing a single game. If you keep your payroll low enough, you’re guaranteed to profit. The players might not want a cap, but it’s the best way for them to get what they deserve, as well as the salary floor that would do more for competitive balance than any tax ever could. And you may have noticed, ownership doesn’t talk much about imposing a cap anymore. They know that it’s a better system for the players. It’s time for the union to recognize that, too.