Salary caps make poorer teams worse off

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Practically speaking, the idea of a salary cap in baseball is dead. Deader than vaudeville. It blew up the game in 1994-95, and the owners and Selig blinked rather than try it again in 2002.  Since then the money has been flowing, competitive balance has been better than most people will admit, and the owners seem to have very little desire to fight that fight again.  It’s not going to happen.

But that won’t stop some people from calling out for it.  Every time the Yankees sign someone people scream salary cap. Every time a homegrown star leaves a small market team they do the same.  I can assure you, I get at least one comment or email a week from someone that contains a sentiment akin to “. . . this will continue to be a problem until baseball has a salary cap.” Otherwise smart people claim to shun baseball based on it not having one. From what I can gather, the thought process goes “Football popular. Football have salary cap. Baseball have salary cap too or me no like baseball.”

But guess what: the salary cap doesn’t help. To the contrary, they have made matters worse. That according to Matt Ozanian of Forbes, who has studied the matter and reports that salary caps have “served to make high-revenue teams enormously profitable and low-revenue teams unprofitable, or marginally so, relative to their rivals. The growing distortion in profitability has resulted in a bigger gap in team values.”  The rich get richer?  Wasn’t that supposed to be the problem salary caps designed to solve, not the outcome they sought to promote?

But even they weren’t bad ideas economically speaking — which they certainly are — they’re awful from an aesthetic perspective as well. They insert unsightly, unwieldy, and downright complicated concepts like “franchise tags” and “expiring contracts” into the sporting discourse. Sure, that stuff is comprehensible — every team can hire a cap guru if they felt the need and most of us could get our heads around caponomics if we had to — but it’s just depressing business.  One team trading its dead weight to another team is simply dreary. I mean, we hate it now when some teams make great efforts to acquire all the best players. How would we feel about it if they spent a lot of time trying to get the worst, most overpaid ones? Blah.

Anyway, I know some of you have been brainwashed into thinking that salary caps = fairness and parity. If you have, please take a closer look at the linked article and the NFL, NBA and NHL as a whole and ask yourself if their systems really make things better than baseball’s admittedly imperfect system.

Unprecedented sanctions: MLB bans former Braves GM for life, makes 12 signees free agents

Associated Press
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Major League Baseball has slammed the hammer down on the Atlanta Braves as the result of their violations of rules on the international free agent market.

Former Braves General Manager John Coppolella has been placed on the permanently ineligible list — the same list Pete Rose is on — banning him from a job in baseball forever. His assistant, Gordon Blakeley, will be suspended for a period of one year. Each had already been dismissed by the Braves. Other Braves’ international baseball operations employees who participated in the misconduct could still be suspended as the league finishes its investigation.

As reported earlier, 12 of the clubs’ international signees are now free agents. The Braves will lose the following players, signed during the 2015-17 international free agent signing periods:

  • Juan Contreras;
  • Yefri del Rosario;
  • Abrahan Gutierrez;
  • Kevin Maitan;
  • Juan Carlos Negret;
  • Yenci Peña;
  • Yunior Severino;
  • Livan Soto;
  • Guillermo Zuniga;
  • Brandol Mezquita;
  • Angel Rojas; and
  • Antonio Sucre

As reported earlier, Maitan was the number one overall international prospect in 2016. The Braves have, for a few years now, had among the top international signee classes. Obviously that came by virtue of cheating the system, and obviously that will lead to a reevaluation of where the clubs’ minor league system stands, talent-wise.

The penalties are not limited to the loss of those players. Commissioner Manfred is imposing what amounts to punitive damages going forward. From Commissioner Manfred’s statement:

“While the remedies discussed above will deprive the Braves of the benefits of their circumvention, I believe that additional sanctions are warranted to penalize the Club for the violations committed by its employees. Accordingly, the Braves will be prohibited from signing any international player for more than $10,000 during the 2019-20 signing period, which is the first signing period in which the Braves are not subject to any signing restrictions under our rules; and the Braves’ international signing bonus pool for the 2020-21 signing period will be reduced by 50 percent.”

There was also what appears to be an unrelated draft violation, imposing penalties along those lines as well:

“The investigation also determined that the Braves offered impermissible benefits, which were never provided, to a player they selected in the First-Year Player Draft in an attempt to convince him to sign for a lower bonus. As a penalty for the Club’s attempted circumvention involving a draft selection, the Braves will forfeit their third-round selection in the 2018 First-Year Player Draft.

The gist of the violations against the Braves involves the bundling of signing bonuses, in which the Braves got players — through their representatives in Latin America — to take lower than the amount typically allotted in one year in order to use the money to sign other, highly rated players in subsequent years, with money they wouldn’t have otherwise had. MLB’s statement describes the scheme thusly:

“The investigation established that the Braves circumvented international signing rules from 2015 through 2017. During the 2015-16 international signing period, the Braves signed five players subject to the Club’s signing bonus pool to contracts containing signing bonuses lower than the bonuses the Club had agreed to provide the players. The Club provided the additional bonus money to those players by inflating the signing bonus to another player who was exempt from their signing pool because he qualified as a ‘foreign professional’ under MLB rules.

“Consistent with the rules, the Braves could have signed all of the 2015-16 players for the full, actual signing bonus amounts. Had the Club signed the five players to contracts containing their actual bonuses, however, the Braves would have exceeded their signing bonus pool by more than five percent and would have been, under MLB rules, restricted from signing any players during the next two signing periods for contracts with bonuses greater than $300,000.

“As a result of the 2015-16 circumvention, the Braves were able to sign nine high-value players during the 2016-17 signing period who would have been unavailable to them had the Club accurately accounted for its signings during the 2015-16 signing period.”

The scheme continued like this:

“The investigation also determined that the Braves: (i) agreed to sign six players to inflated signing bonuses pursuant to an agreement with prospect Robert Puason’s agent in exchange for a commitment that Puason would sign with the Club in the 2019-20 signing period; and (ii) offered prospect Ji-Hwan Bae extra-contractual compensation. In order to remedy these violations, I am prohibiting the Club from signing Robert Puason when he becomes eligible to sign, and disapproving the contract between Bae and the Braves, which has not yet become effective.”

This is, by far, the most serious set of scouting, drafting and signing penalties ever imposed by Major League Baseball. It speaks to the sheer audacity of the Braves’ scheme to circumvent signing rules. It also sends a loud and clear signal to other teams — many which have been rumored to have engaged in similar conduct on a smaller scale — that MLB will not tolerate it.

The Braves lower minor league system has been decimated. It stands, essentially, as the head on the pike outside of Major League Baseball’s castle.