In modern professional sports, athletes are paid a wage that is determined by their potential economic impact on a team. For instance, a team will sign a player to a $10 million contract only if they believe that the player will have an economic impact of at least $10 million (Landsburg). Most professional sports leagues employ a system of free agency in which players are essentially auctioned off to the highest bidder. Usually, the team that is willing to pay the highest salary will be the team that acquires the player. There are some other variables involved in the signing process, which include contract length, clauses, incentives, and signing bonuses. The fact that athletes will play where they are offered the most money remains the underlying principle nonetheless.
Most sports operate under some form of what is known as a salary cap, which sets a limit on the total amount of money that a team can spend on all of its combined player’s salaries. Essentially, it is not so much a cap on salary as much as it is a cap on payroll. Payroll is the total amount of money spent on salary (Keri). Of the four major sports league in America, three of them use a salary cap: the NFL, NBA, and NHL. The MLB currently employs a luxury tax system which taxes any team who spends over a set amount. However most teams never even come close to paying this tax, and since its inception in 2003 the New York Yankees have accounted for 92% of such tax payments (Brown). Lacking a true salary cap, baseball will cease to be America’s favorite pastime.
Competitive imbalance leads to an imbalance in interest. Since 1995, 22 of the 30 teams in the MLB have reached the postseason five times or less. Eight of these 22 teams either reached the playoffs once or didn’t reach the playoffs at all. This data shows that a relatively small number of teams have received a large majority of the total playoff berths since 1995 (Behrendt). A good way to gauge interest in the game of baseball is by using attendance. Of the 30 teams in the MLB, 17 of them experienced a decrease in attendance from last year. Even with two new recently opened stadiums in Minnesota and New York, total attendance in the MLB decreased by 446,434 from last year. In fact, overall attendance has decreased every year since 2007. Tough economic times can be blamed for much of this. However, besides the Tampa Bay Rays, all of the teams who have made the playoffs this year actually experienced an increase in overall attendance (Brown). This makes sense because fan interest is more likely to increase for a successful team and decrease for an unsuccessful one. The Ray’s situation will be discussed later. Without more competitive balance, interest in baseball will continue to decline.
Imbalance in success occurs in every sport. In baseball however, there has been a sustained imbalance over a long period of time. For instance, in the last 15 years the Kansas City Royals have only had one season in which they won more...