Three of America’s four major sports leagues have a salary cap in place, MLB of course being the outlier. If you’ve read my work for a while now you are no doubt aware how I feel about that, but just in case, I think a salary cap is needed to even the playing field in MLB and not just for the Pirates. I also think it needs to come with a host of other changes to baseball’s economic system. Today however, we’re going to discuss what this shutdown has done to this possibility in the CBA negotiations coming up.
Let’s begin telling the story by looking at the other two leagues that thus far have lost games, the NBA and NHL. As with most capped leagues, the owners and players tend to split the pot in half. OK, that’s not good enough for some people I’m sure but for the sake of this piece and to not dive into the minutia of every dollar allocated, its close to that.
Every season the leagues will look at the revenue generated and typically increase the cap to get back to the agreed upon percentage that players should get. It’s typical for the NHL’s cap to go up 2-4 million a year for instance. If the NHL and NBA seasons are indeed over the revenue loss will be nothing short of transformative. The NHL makes a lion’s share of its revenue during the playoffs, in fact they have next to zero national television coverage in the US during the regular season with the exception of the few contests shown on NBC networks.
When I say transformative, I mean it. If these leagues don’t return the salary caps heading into next season will decreased and probably drastically. This will mean players that fit right under your favorite team’s cap, may very well not and since the majority of teams in both leagues spend pretty close to the cap there isn’t going to be a ton of slots available for cut players to land.
The NFL won’t have nearly the losses of the other two so long as they can play their games and the mammoth TV contract they enjoy, but if no fans can attend, they will take a hit too. It’s far too early to make predictions there but make no mistake, the cap won’t go up.
GM’s of these three sports treat the yearly increases much like you and I treat yearly or cost of living increases we receive. When you know it’s coming every year it has a tendency to become spent money.
Bottom line, players will be asked to take pay cuts. Some will, some won’t. For some sports like the NHL, the players will understand and for the most part cooperate. They are very much so plugged into the partnership. I won’t pretend to have the authority to speak on the NBA.
So back to MLB and the upcoming negotiations. Baseball needs a cap for competitive balance, I firmly believe that, but after watching the cap go down in the other leagues and some players becoming collateral damage for something like this will they be willing to entertain it? OK, so maybe they weren’t going to be willing to entertain it before this either, but that’s why it’s called a negotiation.
Before all this I thought a major issue, the players had in MLB was getting a bigger slice of the pie. Accepting a cap could have been that opportunity, and an opportunity to keep that slice of the pie, percentage wise, always the same. It creates a partnership in which everyone on both sides has incentive to grow the game and keep it healthy.
Long term, everything I just wrote is still true. A cap would still provide exactly that, but can everyone involved look at this situation and realize this unprecedented event is not the fulcrum of negotiation? Can they look past this time and see the benefit to the veteran players they claim to care for who aren’t getting contract offers? Will the Owners realize the long-term health of the game requires less smoke and mirrors as it comes to competitiveness or will they fiercely guard their wallets?
They can look at the few who become cap casualties in the other leagues as martyrs and examples of why they should never consider it, or they could see it as the sole reason the very league’s themselves stayed solvent. At the core of all these talks is the overriding us vs them mentality and some of that is warranted, but at some point, as an employee you need to understand you’re affect on the overall health of your business as well.
Don’t get me wrong, if I’m a player I don’t trust the owners with my livelihood either, not blindly at least. On the other hand, a cap makes you less likely to need that trust. It’s a percentage and it moves, mostly up. Many will say there must be a floor if there is a cap, that has not been the case in any of the other cap leagues but seeing the situation through Nutting glasses you can see the need.
I fear that the event will make a cap negotiation a non-starter, the fear of losing money right now will prevent the players from seeing the money that could be gained in the future. We’ll have no choice but to sit back and watch but make no mistake, professional sports will very much so change from this. Whether it does so in a smart and fruitful way remains to be seen.