A Modest Proposal

• Posted by Adam Warner
• on December 9th, 2009

When the Tigers, a relatively high revenue team, have to dump salary, baseball has a real problem. Yes, teams dump money in other sports, but it’s generally to clear space to afford another player. In baseball? Not so much, just goes to the bottom line. Then again, in the AL Central, why bother?  Everybody’s downsizing, but someone has to win and earn the right to get swept by the Yankees in the 1st round.

The economic system truly sucks. But one sort-of interested observer has a plan.

Red Sox principal owner John Henry is calling for Major League Baseball’s revenue sharing system to be overhauled and replaced with a “competitive balanced payroll tax” in an effort to create competitive balance in baseball.

Henry’s comments via e-mail came after he was asked to respond to agent Scott Boras’ comments to the Globe two weeks ago in which the super agent said teams aren’t spending their revenue sharing money and central funds on player salaries, which is what revenue sharing was intended to do for small market teams. Boras received backlash for his comments from MLB executive vice president Ron Manfred, who said Boras’ figures of teams receiving $80-$90 million from revenue sharing and the central fund “not based in reality” and “fantasy land.”

But Henry is certainly going his own way on this very sensitive subject and is certainly not in lockstep with some of his fellow owners on the revenue sharing plan that was adopted in 1997 and distributes the wealth from large market teams to small market teams.

“Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits,” Henry responded in an e-mail. “Who, except these teams, can think this is a good idea?”

That is truly ridiculous. it’s the most “capitalist” of all the sports in that there’s no salary caps, slotting for draftees (that’s enforced), et, al. Yet you have a layer of teams that just take the money and make scant attempt to field a competitive team.

His solution?

“It’s a very simple approach in which payroll tax dollars replace revenue sharing dollars and go directly to the clubs that need revenues in order to meet minimum payrolls that should be imposed on each club receiving revenue. Further, players would have to be protected with a guaranteed minimum percentage of overall revenues. This would be a very simple and effective method in reducing top payrolls and increasing bottom payrolls with no tax on revenues,” Henry wrote.

The basic idea is to heavily tax over a certain payroll, and then tax even heavier. And couple that with a minimum payroll.

The top end sounds sounds reasonable. Clearly there’s no level now that inhibits the Yankees. As to lower bounds though? It sounds great in theory, but in practice, won’t that just cause teams to overpay for mediocre vets just to maintain salary levels? I do like the idea though of only subsidizing low revenue teams IF they use the money to sign a player. Make it especially enticing to keep your own players. In a better system, Joe Mauer should stay on the Twins, but now, why should he? Even in the unlikely event they fork over the money, he’ll eat up so much payroll that they’ll have to dump everyone else valuable to pay him. And they’re not forking over the money, they’ll make a show that they want to so as to justify their new stadium, but strategically come in second in the bidding.

You also have to stop the Marlins from taking in gazillion dollars and running a tiny payroll. If they don’t want to pay anyone, fine, but you don’t get your YES Network cut either.

Trades like yesterday’s Granderson deal have to end. This guy is 29, a good player, and not owed insane money ($25 million over 3 years). Here’s my very sophisticated trade analysis. Yankees get Granderson for a typical overhyped NY prospect (Austin Jackson) a failed prospect (Ian Kennedy) and a lefty specialist who can easily be replaced (Phil Coke). Absolute worse case is Austin Jackson someday becomes almost as good as Granderson. Great trade. Second year in a row the Very Rich have robbed from the merely Rich (Swisher from White Sox for a similar package of nothing they’ll ever miss).

….And OK, Fangraphs actually looks at the numbers and the trade seems even more absurdly good for Yanks.  He likes the Tiger side too, but to me the argument for the “downsizing” team is always flawed. They’re NEVER using the saved money to get better in another spot, they’re just accepting a weaker team for less payroll. If I’m a Tigers fan, why do I want that, are they also lowering my ticket prices?

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