If No MLB Salary Cap, then How Fix?

There was an article released today that expands an article released yesterday by Evan Drell. Today is by Kevin Rosenol. How can MLB address revenue disparity without a salary cap? Here are a few ideas. Basically, we understand that everyone wants a salary cap and a floor. Instead, there might be better solutions that don't involve crazy overhaul that will break everything and make things possibly worse right out of the gate. He made some really great points. I'm going to go through his points and just talk through them with you. I'm going to I'm going to get right into it and and give you the the skinny because there's some good stuff here. Okay, first of all, Ken makes a really good point of why it would actually be a really dumb idea to get in a tizzy, get in a lockout to where we miss games cuz you guys at home and myself included, we don't want to miss games. Nobody wants to miss games. That's always going to be the northstar. Everyone is going to agree nobody wants to miss games. So, how do we avoid that? It's double important for a few other reasons. One, 2025 gave us the most revenue the league's ever had at 12.1 billion. The attendance has grown three straight years. The World Series was massively watched around the world and we're getting new fans every year and the average age of the viewer is slightly decreasing as was the big issue. So, a lot of the things that we've done over the last eight years like the rule changes every year and changing things this are some of them are paying off and it's paying off in money which is what they want. So, like why why now? Is it just because it's the next CBA? That would be really dumb to hamstring that stuff just because you want your franchise values to go up. We're going to talk about that in a moment. Let's not defeat ourselves and that would defeat ourselves. And remember, a lockout is instituted by the owners. Okay, that's important. You need to understand another thing. The salary cap floor proposal is being thrown out there by ownership as a means to create more competitive balance and parody in baseball. something that arguably baseball already has just as good or better than other sports without a salary gap. Like as good as it can be within the current system. That doesn't mean that nothing needs to change. That just means that that's not really a goal you could go for or that's not really as big of a a a problem that needs to be fixed by something this drastic. That's not that problem doesn't align with that solution. One one is way bigger of a deal than the other one. Right? But it is important to constantly worry about that stuff and that I think everyone's on the same page there. So remember, it's not saying we don't need to worry about it. No, we're just saying though that is not the proper solution to that problem that you're putting out there. Also, that's not the only thing that owners want. They also don't really that's not as big high a priority as they want either. The competitive balance is most guys like genuinely don't care if their team does well or not. John Fischer like they genuinely don't care. Like they don't lose any sleep about it. There's a bunch of guys just operate it like it's just a thing in their portfolio. You can hate that and like that if you want, but like those guys exist. They do. To act like they don't is crazy. Every sport has them. Baseball has a bunch of them. It's not okay. It should change, but that's not going to change with the seller cap either. They want to boost their franchise values and they need to do that by controlling costs, being able to be like, "We know what our costs are." And then they can go to a bank and the bank says, "Okay, this is how much your franchise is worth." And they can't do that now. The other sports can do that. That's what they want. That's what it's about. but they won't say that publicly because that's not a very popular idea because it's kind of selfish and it only benefits them. Okay, now we have our baseline. Okay, so here are the arguments that are going here. Here I'll put these out in plain layman's terms for you. Here's the number one thing being said. Dodgers are ruining baseball because they can outspend everyone. Is that false? The first part is subjective. It's an opinion. Baseball being ruined or not ruined is what metrics are we using? So whatever whatever you feel about that, yes, that's true. But in terms of the them outspending everybody, yes they can they can outspend everybody. What the what that's actually doing is up for debate. But the fact that they are spending the most money is true. That's a true thing and that is a problem. And I agree. I think everyone agrees that is an argument being made. The goal then is to rein in spending. Like we need them to not be able to just suspend with impunity either through incentives or actual rules which I am always an incentives person. These people want to just do rules. They want to make it so there's a cap and you can't go past it. And then now now there's nothing we can do. Throw our hands up like we can't do that. The second argument is the small markets won't spend money. We need to increase spending by the small markets. We're like they won't spend any money. They're all cheap. We need to get them to spend more money. How do you do that? You incentivize, right? And then the other the last argument is the small markets can't compete because they can't spend more money. So what would the goal be? Figure out a way to get them more money so they can spend it. revenue sharing is how to do it and they'd already do it already. It already exists. So, we'll see. And then there's the non-public public argument. Expenses and revenues are uncertain. So, franchise values aren't going up fast enough. So, we need to create more certainty around both revenues and expenses so that franchise values can go up. They're not saying that publicly because it's not going to be popular. But that's another argument. So, those four things, those four things are what we need to address. Basically, those four things. The top teams need to think about how much money they're spending. The bottom teams need to have more money to spend and have to think about how much money they're spending and the teams need their franchise values to go up. That needs to happen or they will not accept it. Just know that. So when they when they refuse to to budge on certain things, we're like, "Well, that would make more parody." It would, but that's not what they're worried about. So just remember that. So I I guess we have a few questions to get to right here. Let's just hit these questions before we move on. Maybe the teams that get revenue sharing that's supposed to go on payroll should put their money into payroll for starters. Yeah. So, this is something that I'm about to address, too. That's a great question or that's a great comment. Yes, they should put their money into their payroll. A lot of people argue for a salary floor. What do you think a reasonable floor would be? Another great question. I'll hit it right now. The floor, the floor needs to happen, some sort of floor. So, what Ken proposes is a soft floor and then actually giving the luxury tax, which is a cap system. It could be if it had teeth, but it doesn't. So, give the cap system teeth and give a give a soft floor, which we don't have at all. We have one rule in the books about the floor. And I'm about to explain to you exactly why it doesn't work and why nothing happens and why it constantly is getting abused and nothing is going to nothing's being nothing's being enforced. It's one of those things where there's a rule that already exists and it does not enforce. So, as I continue on, those questions will be answered, but they are very good questions. All right, let me start with Ken's reforms. Let's just go quickly go through the reforms, what Ken thinks we should do and thinks could work. Okay, the luxury tax system would be strengthened with non-financial penalties. Basically, let's stop tying every single penalty to money because the Dodgers now have so much that they can just pay the fees and it's fine. That's not working. So, we need to add different things that are that you can't buy, things that you can't circum circumvent by having a lot of money. Okay? So, limit trades when you're up above a certain threshold, free agent signings or a money you can spend in free agency, change where they are in the draft, take away draft picks, impose fines instead of imposing fines that they can just absorb. So, like you have to think about, are we going to lose a bunch of first rounders for a bunch of years? that now we have to really think about if we want to do this as opposed to being like, "Oh, they're going to charge us $10 million more." Okay, cool. Let's go to 560 instead of 550. It's all written in rounding errors. They're showing they don't care about those fines, so the fines aren't enough. We need to add things that are actual like you only get one of a year, like first rounders. Get rid of them, right? Or at least start putting in little things like that to where if you get crazy, you start losing your ability to to your maneuverability. That's you start getting restricted. That is what the NBA uses. They use something called an apron system. If you stay below a certain amount or go above a certain amount, you lose your ability to trade. You lose your ability to pick up waiver claims. You lose your ability to uh uh to get max contracts. You can't do those things if you spend too much money. So, like, it's not like there's no teams over it. It's just they're like, "We're happy with what we have. Signing Kevin Durant will actually make us good for two years, and so we'll take those penalties for those two years and just run with what we have. we're that's a risk, but it's something you have to think about as opposed to just doing it. That is why the NBA system seems to work though. They're having their own issues with tanking now and they have a cap floor and it doesn't seem to have help. Okay. Point number two, he says small market teams could receive structural help retaining homegrown talent. So, they could basically if you keep your guys, if you resign them, you get a compensatory pick. I brought this up a couple weeks ago. That's a great point. or you get a increased uh chunk of revenue sharing for national TV. So national TV as that goes up we put aside money to give to the small market teams that resign their players. You get a bonus from the league because the luxury tax is a big slush fund anyway. So maybe the luxury tax money goes to them. You get some of the revenue if you sign one of your young guys too long or you resign a guy in free agency. That's incentive. You get money too. Then you can buy somebody else and build your team. Wow, crazy. What? No way. That'd be awesome. Okay. Uh, this would help small markets compete without the need to create more revenue locally. So, like that's a good way to do revenue sharing cuz you earned it. You got an incentive to do something that was risky for you. You took a risk, you got a benefit. You take a risk, you get a benefit. That is how this should be operating. It's business at the end of the day. Number three, access [clears throat] to amateur talent could also be rebalanced through draft restrictions for high roll payroll teams and the creation of an international draft. Now, the second part I'm going to I have some problems with, but the first part is good. So, basically, the higher the payroll you go, the lower you are on the on the draft order. You can't be in the you already can't be in the lottery, but like you like basically like if you have the highest payroll, you're the last pick in the first round guaranteed. Like you'll be 30th no matter what. You could do that or you could like the bottom guys are always going to be the guys over the luxury tax. Easy. Now you don't get the top top top picks. You have no chance of getting the top picks or you just lose your first round or whatever it is. Start making the draft have some implications. They don't need to be crazy. Just make give them some. That another thing you have to think about when you're spending money forever. The deferral loophole is the biggest problem. Now, I've talked about deferrals as well. We need to address the deferrals. Deferrals are very important. Actually, before I get to deferrals, I'm going to take one step back. International draft. Right now, there's really strict limits on how much money you can give to an international player. That is supposed to make it so it's competitive. So, anyone could spend $7 million in Roki Sasaki, right? Great. Unfortunately though, there's still 30 teams have to compete and they have to make the case. You think Pittsburgh's like, "Come to Pittsburgh. Don't go to LA." They're still going to lose. So instead of letting a player just pick whoever, there needs to be a draft system where you're picked by the team you have to go and you have to negotiate with the one team. Now maybe there's a middle ground there. There's a problem with that for a lot of reasons because there's a lot of different types of international draft guys. Like if you're 25 and you go through the posting system all the way through Japan, then you can be a free agent. But if you go early like Roki did at 22 or 23, then you have to enter the draft. That would change the diff change that. Then how do we handle 16-year-old Latin players? those rules would need to be really clear, but that could potentially help, but generally we push against the international draft because it gets muddy really quickly. It becomes suppression of those guys uh futures really quickly, like the amount of money they can get. And so, you got to you got to be really careful with that. That's why we're always careful with it. But the deferral loophole is the biggest thing. And a lot of people are like, "Hey, deferrals. We got to get rid of deferrals." Cool. Let's add deferrals to that problem. You can't defer money when you're over a certain level or you can only defer a percentage percentage of your contracts total or you only can defer for a certain amount of time. All of those things because deferrals do two things for the Dodgers. One, they let themselves defer that money obviously push the money out and get creative with their accounting. So they're like, "Okay, we don't our expenses are spread over 20 years instead of five." Great. That's awesome for taxes and all kinds of different things and the luxury tax. But the biggest thing they can do invest that money for that time and and make money on back of it. So that that money that they're paying those players is worth less money over time and then they're also making interest on it on other things. So they get they're double dipping. They're using that money now. They can say it's an expense. They don't have to spend it or do anything with it, but in reality they just invested it. That's why usually common knowledge is don't defer money, but now everyone's doing it. Players are not supposed to do it. It helps teams disproportionately and now everyone's just like I want to go to the Dodgers. Whatever whatever it takes. Thanks showe. God, it's gonna be turned into the thanks Obama meme. Ban deferrals. B deferrals will never be banned, but they can be restricted. I think that they or at least you should have to think about huge penalties for deferring tons of money. What happens is they can still make the choice. It's just the choice is being pushed one way the way you want it to be. And it's about consequences and incentives. We have to operate in that that realm and then make it so they have to make decisions, smart decisions. They can't just bull rush their way. can't just you can't get to a point where that now everything's just perpetuating. You're just getting snowballing. We we want to keep people from snowballing using the meta to snowball. All right. Point number four, revenue sharing should be restructured so that national TV money is distributed disproportionately towards small market teams. Right now, how it works with ESPN and NBC evenly, spread evenly, 130th of the money. Everyone gets one 130th of the money. What Ken is saying is we should do a ranking system for the smaller markets get more of that money. the bigger markets get less of that money as an incentive to spend it. But that only works if they demonstrate competitive effort, which is the biggest problem right now. Biggest problem. So, how do you give Bob Nutting more money when he doesn't show any ability to or desire to get better or compete? There is a rule for this on the books and it's tied to a soft payroll floor, which is his fifth thing he put out. Fifth thing, penalize teams that fail to meet a minimum spending threshold. All you guys want this what the floor, that's what the floor is. you you add a penalty, not a hard cap, a soft cap, like if you guys go below this, you're going to get in trouble and it's gonna it's going to hurt your ability to make money and you might lose your revenue sharing. So, instead of uh getting more money from the t uh the national TV revenue, now you get less if you don't spend over a certain amount. Uh-oh. Now, now that whole like hoarding that money, putting that money in your pocket, just keeping it and acting like you're making your team better, can't do it anymore because you're not getting in the first place. So, that's one way to do it. So the here's what the existing rule around this is. So there is a rule guys. There is technically a minimum rule for revenue sharing. There is the rule is the CBA technically requires teams to spend their revenue sharing receipts on improving on field performance. You have to carry a luxury tax payroll one and a half times more than the money you receive in revenue sharing. You have to you have to spend 1.5 times as much money as you get in revenue sharing. And there are currently three teams that aren't doing it. Three currently right now there are three. The Marlins, the Rays, and the Guardians are all not doing it right now. But the rule is improve onfield performance. That could be anything right now. It's it could be it could be hiring coaches. It could be buying trackmans. It could be buying baseballs. It could be it could be renovating the bathrooms in the locker room. Any of those things can be considered improving onfield performance. That's all it says. There is no nothing else in there. And the recourse is for the players association to file a grievance. Guess what? There was a grievance signed uh uh filed against those three teams and the athletics in 2016 and it has been open for 8 years. It's still just sitting there. Nothing has happened. There's a grievance that was filed immediately and nothing has happened. What's the point then? There isn't one. The point is to say there's a thing there when there isn't. So, what we need to do is make that enforceable. That language needs to change. That language needs to be if you do not do this, then you lose these picks or you lose this revenue sharing money or you lose like you lose this money in the draft. Whatever it is, all these things already exist. Teams that spend less get less back in return that year. Yes, that's exactly what I'm talking about because right now it's even. It's even. The way it works is even. All of these things already exist. There's already a bunch of tears at the luxury tax. We just have to change what that means. Easy. Literally as easy as amending a piece of paper. Soft cap. We just give that other thing. You got to spend this amount of money more than your revenue sharing. And then we we put a number to it. You got to spend over that amount of money as a soft cap. And if you go below it, you start to lose stuff. Boom. Bing bang. Boom. Look. Soft cap. Soft soft cap. Soft floor. We have a cap floor system. It's just soft, which frankly, football and the NFL doesn't technically have a hard cap either, where you physically can't go over a thing. You can go over it. There's just such stiff penalties that you can't operate your business anymore. But it's technically a soft cap. You could still do it. You just have to stay where you're at. You can't do anything for a while. But if that's what you're okay with doing, you could do it. Can we reduce their 40man, 30 man man beyond as penalties? I don't know if that's a huge advantage for the team, honestly. I I'll be honest. I think the teams specifically would want that more than the players. The size of that roster is actually the and the players benefit because the guys who are not in the big leagues but are on the 40man, they get a pay increase and that's kind of the only way you can do it. So, it is what it is, you know. So, here's the last thing he kind of points out. So, it's been said a lot that the cap and the floor for the NFL and the NBA could could work. But how theirs works is 100% is the cap, 90% is the floor. Okay? So, like say, let's just say $200 million as a just a round number that's easy to do math on. That means 180 is the floor. Okay? So, you have a $20 million work to work with. In the case of the NBA, you don't have that many players. That usually means a player or two. So, you only have 11 guys ever available. So that window is easier to work with. In football, you're paying all your quarterback all the money and then everyone else is like you're paying linemen like $200 each. So like if you got your quarterback figured out, you can you can work with that. And then there's is like a rolling on four years, which is also weird. So like you can like spend a crap ton of money one year and then just spend nothing for the next three and then it averages to the cap, which is can you imagine that getting manipulated? Cuz it is. Uh anyway, that system cannot work in baseball for a very specific reason. First of all, 200 million would be a low cap number based on what the salaries are now. It' probably be two somewhere between 225 and 250, but we're going to say 200 for math. So, we can't do Think about how many teams are under $180 million. What? Oh, it's like 23 of the teams are under 180. 23 of the teams would have to bring their salary up. They won't accept that. Okay. So, what if we drop it to 80% 160? How many? What? How many? Oh, there's 17 teams under 160. Okay. Well, it can't be that either. Let's drop it again. See what's happening right now? Uh, now it's 140. Okay, 140. How many teams are under 140? Oh. Oh, 13 of them. Uh, well, that's too high. Okay, let's drop it again. 120. 60%. What? How many? Like, there's nine teams and they're still going to push back. Okay, maybe we can do 120, but now we have $200 million and we have $120 million. That's still way more money than this. Now, now the gap hasn't been closed and now we're in the same situation except the top's capped. See what I mean? We can't do a percentage system system based on how it's set up right now. If we don't massively overhaul revenue sharing, if we can't give the Pikes Pirates more money, they simply can't hit the floor. Like they can't do it like within reason. It's not like they're hoarding all of their money. They're just hoarding a lot of it. Like, you know, they're probably making 40% margins instead of like 20, which they should. That won't make a big enough difference. There's not making enough money to do that. So, in order to do it, there's got to be a hu we have to do a lot of the things we just talked about. So why why would we create that when we already have the framework that exists for everything else? Like why not? Why just why why not just create the soft and then the soft within the system we have? We just we just change some of the rules around the tiers. Maybe change where the tiers are and then we don't get the Dodgers. If you can't defer 68 of of show Otani $70 million. If you can't do that, they don't have their team that way. That that is just not happening. That's just not happening. And then you can just bolster the smaller teams with the revenue sharing. Give them bonuses for spending money. give them bonuses for taking chance on their players they developed. Start to put that back into the equation of what they can do. And I think we're good. Like I think we're good. I think there's stuff here. I think they're on to a lot of things outside of maybe the international draft. I think that needs that needs a soft touch. There's been problems with the that getting kind of gained in the past and that's why they're iffy on it. Couldn't the Pirates just sign for a massive contract and scare say screw the rest of the team basically? Now, that's a great point. That is a great point. So, if we wanted to do that, this would be concession that needed to happen. That would need to be addressed. But once again, they'll keep Paul skins. So, first of all, keeping Paul Skins is a net positive right now. They're paying they're not paying Paul Skill screwing the rest of the team. Like, they're doing that now. So, let's start with Paul Sches getting paid first and then go from there. They're not doing the first thing and they're still not paying anyone else. So, the first thing you can do is say at least that'll signal to free agents that, hey, free agents that aren't Kyle Tucker, right? Okay, let's just say the mid-tier, the the the three-year $50 million deal guy, the like the Brennan Donovans of the world, the Josh Nlers of the world, like these good players that you put around a core of young guys to win. Those guys might consider going to Pittsburgh if they sign the best pitcher on the planet. Win. That's a signal. That's the benefit. So like you can start there and sure and it'll still be limited on how big that contract. You can't just be big forever. You'll have to get creative, but you'll have to spend the money. You have to spend the money. Showing you spend the money will solve a lot of the problems. Oh, and also there is no perfect system. That doesn't exist. We're just trying to maintain the game's momentum now and make it better moving forward without having to explicitly say, "Owners, here you go. You get what you want." There's one last question though. Will the things we just mentioned meaningfully change the ability to increase your franchise value? Yes, it will, but not like not like officially like right. You'll we're going to see the benefits of them. Like revenue sharing gets better. If you intend to spend more money, then you get revenue sharing. So then you can report that. But again, everything being conditional, things have to kick in. So you can't you can't go in on January 1st every year and be like this is how much we're spending and this is how much money we're going to have which would be the best way to get franchise values. So if you guys hear a lot of this stuff being rejected and be like well you know I don't think that's going to solve parody it's probably because they don't see it increasing their franchise values enough that all that said all of those things if we put them in place tomorrow their franchise values would increase but would it increase enough and would it be consistent? That's what the question would be. And I'm not going to hold my breath. I'm not going to hold my breath that that it's going to be enough. But it would do a go a long way for solving a lot of the runaway spending at the top and the lack of spending at the bottom and also helping the smaller markets that can't create more local revenue, actually have more revenue to work with as long as they have to use it on making their team better. Like actually, it's killing three birds with one stone. It's just that last bird, that last big owner bird, the big gold bird that they want that doesn't help the players at all. It's the thing that only helps owners and doesn't help anyone but 30 30 men. That's only people affected by it. That's the thing that might be the sticking point. And that is silly. Like, I like the game. I think the game's in a fairly good spot. I hope you guys do, too. I mean, you guys can argue with Tell me in the chat right now. Like, how do you feel about watching baseball outside of this crap? Like this is really well written by the way. Everyone should go read it if you can and also read Evan's uh piece before. He just kind of said like here's the things that exist so you understand. What if revenue sharing was impacted more by uh record as well as market size teams smaller markets could be more incentivized to compete more creative ways like the guards and the rays. Yeah. Or maybe not even record. It could be like uh playoff appearance because records records can records are a little bit deceiving sometimes, right? At the end of the day, you just want to get to the playoffs. So, like playoff appearances, going deep into the playoffs, like really achieving cuz they are the thing that matters. Uh maybe there's something attached there. Maybe or maybe there's just like a little boost for for getting in or or maybe like improving your your record from year to year. That could be one. Uh but a lot of a lot of times like a lot of times you can just run into like a rookie comes up and he's just way better than you thought he would be and then suddenly you guys are way better than you were and like you didn't do anything. We get all these benefits. We got to limit that, right? Uh, but I think the game in 2026 versus 2016, I think we're in a better spot. I feel good. And behind the scenes, bet your bet your little buns, guys. Behind the scenes, everyone knows that the Dodgers, what they're doing is aggregately good for baseball and for the business of baseball as well. It just is like having a really good team doing really great, really big things with really good international stars, pushing out the game to everybody and also everyone else hating them. good for baseball. It is. And I'm glad you guys hate them. You should. That's that means you're paying attention. You should hate them. You should hate them just because they win. All the other stuff. Be damned. Just because they're good. You should hate them because they're good. And then you should also hate them because they spend a lot of money and they have all the resources and then and they're the big bad wolf. You should hate them. I love it. I grew up doing the same thing with the Yankees. And you know what? I still hate them. And it feels good. And I'm super biased. And it's okay cuz I like all the players. It's funny. I like all the players. I like their manager. I like I like the people. I like them all. I just hate them. You know what I mean? I love it. I love it and I hate it. And it's what it's about. It's why we do this. Shorten or get rid of arbitration. Make it so you can sign only threeear deals, five year deals, and seven year deals. That's another good one. You should hate them. Shorten or get rid of arbitration. Make it so you can only sign three years, five year deals to seven year deals. We We could work on a deal system where AAVS can go big, but like then you have to think about deferring money. And so that will also bring like it's a good way to rein it in but still make it possible to do huge deals. If you really want to, you can, but like you don't have to. I I think that's all shortening the length of time that those are compromises that are going to have to happen if any of this happens. If any of this happens, those are compromises that are going to have to happen. using the franchise tag. Ah, well, we have our version of that kind of is is the uh qualifying offer kind of similar, but yeah, there there might be something in there where you can get a franchise tag or or a max contract in and have like you have like a special style of thing that has parameters. Those are these are things that should be explored. They will be explored. Let's just be very clear. They will >> [music] [music] [music]

To salary cap or not to salary cap? Ken Rosenthal has some answers and I think you may find some of them interesting. It turns out that much of the frameworks already exists for solving MLB's biggest issues. But will the players and owners go for any of it? Let's discuss... ✍️ Subscribe to my Substack for behind the scenes & exclusive content: https://iamtrevormay.com ✍️ 🧢 Get your merch here: https://mayday.show 🧢 🎥 Watch Mayday Monday Live every Wednesday @ 1pm PT on THIS CHANNEL or at twitch.tv/Iamtrevormay 🎙️ Subscribe to the Mayday pod anywhere you listen to podcasts -https://allmylinks.com/maydaypod 🗣️ Join the Discord - http://www.discord.com/trevormay ⚡️ Take 10% OFF your order with code "baseball" at checkout - Focus Fuel - thefocusfuel.com/baseball 👍 Be sure to Like and Subscribe with Notifications to support the channel 🔴 Watch me live | http://www.twitch.tv/iamtrevormay​ 📺 Alt Channel | https://www.youtube.com/more_mayday FOLLOW ME Tiktok | https://www.tiktok.com/@iamtrevormay Twitter | http://www.twitter.com/iamtrevormay​ Instagram | http://www.instagram.com/trevmay65​ Website | https://www.iamtrevormay.com/​ MUSIC Music from Motion Array #mlb #vlog​ #trevormay #reacts #baseball #pitching #funny #majorleaguebaseball