The Big need for Parity: Baseball's need for a salary floor.

I am writing this article days after the largest contract in North American sports history. Shohei Ohtani. $700 million. 10 years. LA Dodgers. That's that. The moment the announcement came through, sports purists on Twitter waged war saying that big teams should be penalized, there should be punishments from the MLB for this deal, and the worst thing I have ever seen; it's bad for Baseball. Really? Why? It's not the Dodgers' fault that they want to win. It's not the management's fault for trying to maximize the strength of their roster in their effort to bring back a World Series to the sports town of LA. 

So here's my take on why every league in the US should have a salary floor.

The latest iteration of the NBA's Collective Bargaining Agreement (CBA) has ushered in a new era of strategic and financial considerations, making it a compelling subject for enthusiasts. Delving into the intricacies (there's a separate blog for the ardent reader), the CBA introduced multiple tax levels, curbing the propensity of high-spending teams to recklessly surpass the luxury tax threshold. Yet, amid these noteworthy changes, a particularly revolutionary aspect of the CBA demands attention: the stipulation that each franchise must allocate a minimum of 90% of the salary cap annually. For the current year, the cap stands at $122,418,000, with the Indiana Pacers boasting the league's lowest roster salary at $130 million.

This mandatory salary floor emerged as a countermeasure to address the cost-cutting strategies employed by teams during rebuilding phases, colloquially known as "tanking." The practice involved assembling rosters with inexpensive players, subsequently trading away marquee talents to save costs. The impact has been palpable, with a notable shift in the fortunes of teams adopting this strategy. A striking revelation is that seven of the 15 teams with the lowest roster costs currently maintain winning records. Standout examples include the Orlando Magic, occupying the 2nd spot in the Eastern Conference with the NBA's 5th cheapest roster, and the Indiana Pacers, securing the 5th position. Out West, the OKC Thunder hold the 2nd spot, while the Sacramento Kings claim the 6th position. Despite relatively economical rosters, the $130 million threshold has proven to be a substantial investment in assembling competitive squads. This surge in parity within the NBA is attributed not only to an influx of talent but also to the 90% salary floor compelling teams to invest in impactful players. The disparity between the league's most and least expensive rosters has narrowed to $96 million, down from $99 million in the previous year and $96 million in the 2021-22 season. The league's financial landscape is evolving, creating a captivating narrative for those keen on understanding the dynamic interplay between financial regulations and on-court competitiveness.

Let's delve into the intriguing world of Major League Baseball, where Shohei Ohtani recently inked a contract that surpasses the cumulative earnings of basketball legend LeBron James. In the lavish spending extravaganza of the 2023 season, the New York Mets took center stage, shelling out a staggering $343 million to assemble the most expensive roster by a considerable margin, only to fall short of playoff glory. The collective gasp of baseball enthusiasts at the exorbitant sums exchanged is understandable, yet it underscores a fascinating reality — the existence of parity. The Baltimore Orioles, ranked 29th in payroll, defied financial odds to emerge as the American League's best regular-season team, while the Arizona Diamondbacks, armed with a below-league-average payroll, clinched a coveted spot in the World Series. It's a testament to the principle that good, youthful teams can excel when propelled by talent and determination. However, the crux of the matter lies in the indifference exhibited by certain teams. The disconcerting gap between the most and least expensive teams in Baseball was a staggering $280 million in the preceding year, a figure that soared from $226 million the year before and $220 million in 2021. The Oakland A's stand out as a poignant example of this disjuncture. Here is a chart that depicts how much they have spent in comparison to the league's highest payroll:

(data from Baseball Prospectus)

Over the past decade, the Oakland Athletics (A's) have consistently found themselves among the league's bottom 10 in terms of payroll, a trend that has endured without deviation. Strikingly absent from the realm of average payrolls, the team's performance, reflected in a win-loss record of 690-768, stands at a modest 0.473. Playoff appearances, a hallmark of success, have been limited to a mere four instances within the last decade, excluding the shortened 2020 season.

Despite being valued at a substantial $1.18 billion and boasting an annual revenue of $212 million with a $29 million operating income, the A's have struggled to align their financial prowess with on-field success. The man behind the financial helm, John Fisher, commands a personal wealth exceeding $3 billion. Regrettably, Fisher's perceived apathy towards the team has been a pivotal factor contributing to the decline of a franchise that once enjoyed greatness in the 1970s and 80s. The consequences of this neglect are evident in the dilapidated state of the team's stadiums, which now stand as desolate monuments to a bygone era. Frugality in team management, coupled with a reluctance to make significant financial investments, has tarnished the once-proud image of a franchise synonymous with success. The ramifications are now reaching a critical juncture. With a looming threat of relocation, the city of Oakland faces the prospect of losing its last remaining professional sports team. In a disheartening turn of events, the A's are set to bid farewell to their roots, with Las Vegas poised to become their new home within the next three years. The impending move casts a somber shadow over the end of an era for Oakland and its passionate sports community.

For ardent baseball enthusiasts, the disheartening reality extends beyond the Oakland Athletics' financial strategies. The Colorado Rockies consistently find themselves below the league's payroll average, with only two postseason appearances since 2014. Similarly, the Chicago White Sox and the Cincinnati Reds clinched playoff berths just once in the entirety of the 2010s. The Miami Marlins graced the postseason for the 1st time since their triumphant run in 2003, while the Pittsburgh Pirates' last playoff appearance transpired a distant nine years ago.

Now, a natural query arises: Is there a direct link between financial investment and on-field victories? It's a valid question, especially when considering the Baltimore Orioles, who surpassed the 100-win mark with a bottom-five payroll. Yet, the Orioles' success is nuanced, rooted in a shrewd draft strategy following consecutive 100-loss seasons. Their ascent relied on cultivating young, cost-effective talent—a testament to the art of drafting exceptionally well. However, the notion of deliberately tanking to secure high draft picks and replenish rosters with emerging talents isn't foolproof. The challenge lies in orchestrating a cohesive team around these promising picks, ensuring their collective prowess translates into success on the field. The Los Angeles Angels exemplify this struggle, boasting two generational talents, Shohei Ohtani and Mike Trout, for a considerable 5-6-year span. Despite these exceptional individuals, the Angels' ledger remains devoid of playoff appearances and .500+ seasons.

Herein lies the crux: sustained success necessitates financial investment in the young talents a team acquires through drafts. To forge a winning team, it's imperative to not only secure promising prospects but also to compensate them adequately to ensure a prolonged era of triumph.

	WAR (HOU)	Money	WAR (OAK)	Money
2017	52.5	$124	27.1	$82
2018	58.4	$160	49	$66
2019	67.3	$148	54	$89
2021	50.2	$171	39.8	$84
2022	53.6	$164	8.8	$49
2023	46.4	$181	5.1	$56

The table above shows the Wins Above Replacement (WAR) that a team has accumulated over a season vs. the money they spent. Wins Above Replacement (WAR) is a statistical juggernaut measuring a team's prowess beyond the league average. Picture a fierce showdown between the juggernaut Houston Astros, basking in the glow of a dominant reign over the past 6-7 seasons, and the resilient Oakland A's, a team that, even by the data's admission, showcased prowess from 2018-2021. The Oakland A's boasted a roster teeming with potential—stars like Matt Olson, Matt Chapman, Marcus Semien, Mark Canha, and Liam Hendriks painting a promising future. Yet, the narrative took an unexpected turn as these players approached the free agency threshold. The A's, hesitant to loosen their purse strings, opted for a strategic pivot, trading these assets for prospects. This managerial approach, at best, could be termed mediocre, eventually pushing the franchise toward the drastic decision of relocation—to the neon-lit landscapes of Las Vegas.

Enter the protagonist of reform: the MLB salary floor. This proposition isn't just about redefining team dynamics; it's about injecting vitality into the very veins of the league. With a level playing field, the competition for playoff spots intensifies, ushering in an era where fans are drawn to the unpredictability of each game. It's not just about wins and losses; it's about the narrative of underdogs toppling giants, a storyline that resonates with fans and elevates the league's intrigue. The Oakland A's, once languishing at the bottom of attendance charts with a meager 10,000 fans per game, stands as a testament to the potential transformation. Picture a Las Vegas relocation not as a mere geographical shift but as a phoenix rising from the ashes—a competent team in a vibrant city beckoning fans in droves. This surge in attendance doesn't just signify cheers echoing in the stadiums; it translates to a financial upswing, breathing life into the team and filling the coffers of one John Fisher.

A salary floor emerges not as a constraint but as a guardian of competitive equilibrium. Beyond the numbers and statistics, a salary floor stands as a guardian of fairness, fostering competitive balance and breathing life into the heart of the game. Picture a league where every team, regardless of financial stature, has the means to assemble a roster capable of contending for glory. A salary floor is more than a fiscal directive; it's a commitment to the very essence of sport—unpredictability, the rise of underdogs, and the perpetual hope that every fan carries into the ballpark. It's a call to reshape the narrative, to ensure that success isn't monopolized by a select few but is a reward for strategic prowess and team synergy. It curtails the dominance of financially endowed teams, ensuring that the pursuit of top-tier talent is a collective endeavor. This, in turn, kindles the flames of fan engagement. A league where every team has a fighting chance becomes a spectacle, a theater of dreams where loyalty is rewarded, and success is not the exclusive domain of a privileged few. In the grand tapestry of Major League Baseball, the call for a salary floor isn't just a managerial tweak; it's a clarion call for a league that thrives on unpredictability, resilience, and the perennial hope of every fan—that their team, regardless of market size or financial clout, can emerge victorious.