Distributing the Surplus
To agree with Scott Lemieux it’s important to understand that whatever good arguments there may be for salary caps in professional sports, the “populist” line of argument that rails against the evils of athletes earning windfalls in a world of injustice makes the least sense. Successful sports franchises generate a ton of revenue since a lot of fans are interested in them. That revenue will inevitably wind up getting split up between the owners of teams and their various employees. Artificially limiting the salaries available to one sub-set of employees — the players — simply means more of the money will wind up in the hands of the owners and the coaches.
Meanwhile, the level of competitive balance in a given sport is generally determined by factors other than the presence or absence of a salary cap. As it happens, uncapped sports like Major League Baseball and many European soccer leagues have more balance than does the NBA or the NFL. Which isn’t because caps cause imbalance, but rather seems to relate to intrinsic features of the spots. Basketball leagues are relatively unbalanced everywhere you look.
130 Responses to “Distributing the Surplus”
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December 29th, 2008 at 5:43 pm
If they could only all be the Green Bay Packers.
December 29th, 2008 at 5:47 pm
I’m pretty sure every European soccer league has much, much less balance than any major league in America.
December 29th, 2008 at 5:48 pm
I think you meant to say:
“As it happens, uncapped sports like Major League Baseball and many European soccer leagues have more imbalance than does the NBA or the NFL. ”
Either that, or you’re just wrong.
December 29th, 2008 at 5:50 pm
You know, it’s funny. I read both Scott’s article and the one he linked to and it just now dawned on me: fine, you want a salary cap? Awesome, then let’s cap ticket prices. Funny how no one ever goes there. You’re exactly right that we’re all up in arms over ticket prices rising (in all sports), but there’s never any talk about where our money is going. The owners would rather have us believe that our ticket money is going directly to Derek Jeter’s fleet of solid gold Lexuses (Lexi?).
December 29th, 2008 at 5:54 pm
As it happens, uncapped sports like Major League Baseball and many European soccer leagues have more balance than does the NBA or the NFL.
Huh? Baseball has balance? Tell that to Pittsburgh, Washington, Kansas City, Baltimore…
Just so I’m clear, the NFL is the league that has teams that were 1-15, 4-12, and 5-11 last year playing in the postseason this year, with rookie coaches and (in two cases) rookie QBs, right? That’s balance.
December 29th, 2008 at 6:01 pm
As far as soccer goes, I can only really comment on the English Premier League, as it’s the only one I follow…. but in the 16 year history of the league, Manchester United has won it 10 times. Arsenal twice, Chelsea twice, and Blackburn once. Beyond that, with only two exceptions in the last 7 years, Chelsea, Arsenal, Liverpool, and Manchester United finished in the top four in some order. The only two times it wasn’t just those four, Liverpool finished 5th.
Spain is similar with FC Barcelona and Real Madrid. Soccer is tremendously unbalanced.
December 29th, 2008 at 6:01 pm
More MLB teams have made the playoffs (in terms of proportion of total teams) than the NBA or the NFL. Ditto for winning the championship.
Whether the MLB has “balance in general” or is “sufficiently balanced” is different from Matt’s (correct) claim, that the capless MLB is MORE balanced than the capped NBA and NFL.
December 29th, 2008 at 6:02 pm
I know Matt is right here but a part of me wishes that the answer could be — hold down salaries = hold down seat prices.
Oh well.
December 29th, 2008 at 6:03 pm
One only need look at NCAA football and men’s basketball to see an example of Matt’s thesis in action.
December 29th, 2008 at 6:08 pm
PTS – reference? time period? extenuating factors?
December 29th, 2008 at 6:13 pm
To further argue about soccer’s extreme imbalance, the Dutch league is dominated by PSV Eindhovn. Lyon has won the French league 8 years in a row. Either Rangers or Celtic have won the Scottish league every year since the mid-80’s. The only league that shows some balance is the Bundesliga, the league that has the most evenly distributed revenues.
December 29th, 2008 at 6:16 pm
Here (via Drezner):
http://sportsillustrated.cnn.com/2008/writers/joe_posnanski/12/26/yankees.spree/index.html
December 29th, 2008 at 6:20 pm
Meh – taken from http://joeposnanski.com/JoeBlog/2008/12/25/buying-an-umbrella-in-new-york/
December 29th, 2008 at 6:23 pm
PTS beat me to it. I’d like to add that Baltimore was pretty good in the 90’s and will be decent within the next couple of years. The problems of Pittsburgh, Washington, and Kansas City stem from organizational stupidity, which a salary cap could not fix.
December 29th, 2008 at 6:24 pm
To further argue about soccer’s extreme imbalance, the Dutch league is dominated by PSV Eindhovn.
Salary caps would really be a bridge too far.
December 29th, 2008 at 6:24 pm
I don’t know about soccer but Matt’s right about the other sports. A great baseball team will win 60-65% of it’s games but a great basketball or football team will win 80%.
December 29th, 2008 at 6:28 pm
Baseball has balance? Tell that to Pittsburgh, Washington, Kansas City, Baltimore…
That’s a product of bad management, not revenue imbalance – and nothing can overcome bad management (says the long suffering Lion fan). I would reiterate the Joe Posnanski points (ie. baseball has a far more diverse number of champions in the free agent era than other sports).
I don’t think anyone in Baltimore would complain that they haven’t spent enough in the last 10+ years – it’s just that they’ve spent and developed players poorly. If you are going to cherry pick bad teams in baseball, then you also have to account for the recent success of the Rays and Twins.
December 29th, 2008 at 6:46 pm
I dont think comparing how many different champs are crowned in a sport is appropriate. The fact is, some games are inherently more balanced than others. By that I mean that in some sports, it takes more games for the best teams to rise to the top. Baseball is just such a game. Some of the stat heads have calculated that it takes something like 20 games before you can be sure that the ‘best team wins’. Which is why more teams have won the WS in baseball than other sports. The baseball playoffs are more random than other sports. They just dont last long enough to honestly tell who the better team is.
Basketball is a game where the better team can be determined in almost one game. It is very hard for a inferior team to win a 7 game series in basketball. It happens all the time in baseball.
apples, oranges…..
December 29th, 2008 at 7:02 pm
Lighthouse, that’s part of the point. The salary caps don’t play much of a role in determining how balanced the sport is. Other features play a bigger role.
But certainly football playoffs are more random than baseball. It is just one game after all.
December 29th, 2008 at 7:03 pm
Maybe when millionaire athletes and billionaire owners stop extorting tax payers to fund their Tax Payer Palaces we can agree that it is silly to lament the huge amounts of money they own. After all, all that revenue they generate is hugely subsidized.
December 29th, 2008 at 7:05 pm
There’s also the factor in baseball that some of the biggest salaries on the roster are signed in order to play a minority of the games played by the team in a season.
Soccer might well be more like baseball than like American Rules Football in terms of likelihood of upset wins, but in European soccer the difference in revenue generating ability between a regular participant in the European Champions League and the rest of the league is so massive that a handful of teams can afford to hire players as back-ups at salaries that many of the rest of the league could not afford to pay to any but a handful of stars.
It is no accidence that the number of dominating clubs in most European leagues and the number of Champion’s League spots are closely related in so many cases.
December 29th, 2008 at 7:21 pm
One thing is certain. Proximity to Lake Erie since it was cleaned up has had devastating consequences on the NFL franchises cursed by this geography.
As to why basketball is so lopsided in favor of few teams at the peak I think it has to do with the mental intimidation that somehow arises from having so many bodies in such a small space. Which goes with my other theory that the basketball court is too small for today’s giants and or the basket too low or too big rendering the game somewhat silly. And don’t get me started on the impossibility of determining fouls and how fouls in basketball are more determinant of the outcome than any other sport, thus wrecking it.
December 29th, 2008 at 7:24 pm
Football is a special case in that injuries play such a large role. Injuries really are a dice role, radically changing team makeup. More games means more injuries. No matter how you structure it, the outcomes in football are more random. It can be fun for the fans though, any given Sunday and all that.
I use to be a big fan of salary caps. But then the Seattle Mariners got good. They went from a bad team drawing no fans in a bad stadium (the TB D-Rays of the 80’s and early 90’s) to one of the top grossing teams in baseball. Now Seattle has to win, unlike the Cubs for example, they cant lose and make money but to me that is a feature, not a bug. It keeps the pressure on to win.
December 29th, 2008 at 7:27 pm
This is a bar argument I’ve had a lot. It’s actually a somewhat complex question, but the basic facts are not that hard to understand.
American football was once an oligopoly – that is, a handful of teams in giant markets competed for the championship. Some combination of revenue-sharing and the hard salary cap changed that – now, any consistently well-run team has a chance to win the championship.
Baseball has always been and remains imperfectly competitive – one of a handful of teams in giant markets usually wins the championship (and one team in particular wins a large plurality of championships), but anyone can do it.
Basketball has been an oligopoly over the long term with monopolistic tendencies – one of a handful of teams usually wins the championship, with long runs of dominance by a particular team throughout the prime playing years of that team’s best player being a consistent feature of the league. The luxury tax (or soft cap) may be starting to change things, but it’s too early to tell.
So in each individual sport, before you talk about “balance” you have to understand what problem it is you’re aiming to address. In baseball, there’s no real problem because of the somewhat mystical nature of the game. In football, there’s no real problem because revenue-sharing and the hard cap have leveled the playing field.
In basketball, there’s definitely a problem but it’s not totally clear if it’s fixable – Jordan’s Bulls, for example, might have been MORE dominant for LONGER under an NFL-style hard cap.
It’s pretty clear that while revenue structure plays a role (look at the NFL) some aspects of sports competition are the result of the basic nature of the sport. It will always be true, for example, that a well-run basketball team with the best player in the NBA on its roster will be the favorite to win the championship every year. When there’s only five guys on the court at a time, it matters a lot who the best player is. In baseball or football, less so.
December 29th, 2008 at 7:28 pm
The soccer leagues in Europe are less balanced because of the structure of the league, which also matters.
That is, the play-offs only follow on the national league. These, the UEFA cup and the Champions League, are more balanced. 17 teams won the Champions League (and predecessor) over the past 30 years.
There is considerably less cross-subsidisation in European soccer leagues than in American sports leagues. The soccer leagues are not fixed but use a degradation/promotion system.
December 29th, 2008 at 7:41 pm
Sorry, my point was not so clear. I think American football is more like basketball in that the best teams can be determine in a small set of games. However, the volatility in American football comes from injuries. Increasing the number of games just increases the injures and makes the process more random.
Once you get to the point that teams have so much money, they can pay people to sit on the bench that would start else where, then you have a problem. Before the NCAA implemented restrictions on football scholarships, teams would stock pile talent just to keep it from other schools. In the 70’s the University of Oklahoma once had a running back who was drafted into the NFL and played for a couple of seasons and he NEVER started a single game for OU. He was a backup his whole college career.
December 29th, 2008 at 7:43 pm
Basketball has the fewest number of players and the least specialization. For those reasons one player can make a more decisive difference than in any other sport. In theory this should make it the most balanced, and often this is the case: look at the turnarounds of the Jordan Bulls or the James Caviliers which had tended to be jokes before their respective stars’ appearances. (and moreover, became powers with the addition of only one or two more top of the line players).
But, otoh, there’s the Clippers and the Bullets/Wizards.
December 29th, 2008 at 7:48 pm
is there a statistically significant correlation between a higher payroll and more regular season wins?
That’s the question that will tell us the extent to which salary caps help competitive balance.
Al:
I’m not going to hunt down a link for you but I’m pretty certain there’ is a statistically significant correlation, but it’s pretty weak.
And no, that’s the not the question that will tell us whether a cap helps cb. A cap would certainly help competitive balance in some ways (say, preventing the Yankees from signing Tex), but it would potentially damage cb in other ways. Example: team A finds itself with some overpaid but still decent players and no reasonable chance of winning for next couple years. Under current rules, overpaid decent player can be shipped to team B, who are on cusp of winning, in exchange for prospects (and payroll savings) that give team A a better chance to compete in two years. A cap doesn’t necessarily remove that, but it makes it takes away potential trading partners. In general a cap may prevent some good teams from getting even better, but it will also prevent bad teams from constructively dealing with their badness.
It’s no coincidence that the free agency era has had much more cb than the unlimited profits/players as serfs era in baseball. It gives GMs a better collection of options The Pirates are no more structurally worse off than they were in the early 90’s (or KC in 83); they’re just badly run (as the Yankees were in the 80’s). That some teams are consistently lousy is not a case for a salary cap.
December 29th, 2008 at 7:57 pm
@15: Funny, Mike.
December 29th, 2008 at 8:02 pm
djw
It’s no coincidence that the free agency era has had much more cb than the unlimited profits/players as serfs era in baseball. It gives GMs a better collection of options The Pirates are no more structurally worse off than they were in the early 90’s (or KC in 83); they’re just badly run (as the Yankees were in the 80’s). That some teams are consistently lousy is not a case for a salary cap.
It’s easy to cite the Pirates, as they are terrible. But there are teams that have developed tons of great talent only to lose it or have to trade it. Specifically, I am thinking of the Cleveland Indians. Manny Ramirez, Jim Thome, Bartolo Colon, CC Sabathia were all guys who came up through the org, became amongst the few best players at their position, and went on to other teams because the Tribe couldn’t fit them into their plans. In the cases of Thome and Manny, it wasn’t even that they didn’t extend them huge offers. IIRC the Manny offer was in excess of 140 mil and the Thome offer was 1 year shorter but similar salary per. And in a few years, they’ll be trading Cliff Lee, Grady Sizemore, and Victor Martinez or watch them walk as well.
December 29th, 2008 at 8:13 pm
The notion that the Indians “had” to let their best talent walk requires accepting MLB propaganda about about profitability at face value. Given the quality of evidence they’ve produced for these claims, there’s no particular reason to buy it.
Furthermore, come on. “My favorite team doesn’t keep all their best players forever” isn’t evidence of a serious CB “problem”. Cleveland was a very good and competitive team from 94-01, went through a three year rebuilding cycle (getting all kinds of good talent via the draft and trades), rebuilt, and was a very good and competitive team from 05-07. Yeah, they may not resign sizemore. THe only reason they have sizemore (and lee) is they smartly traded Colon (whom they problaby told fans they “couldn’t afford to keep”) for them in 02. If they continue their excellent management, they’ll get something good (via draft or trade) if/when they let their current good players go, and they’ll continue to be a winning franchise.
December 29th, 2008 at 8:17 pm
Lamenting the loss of Colon AND the future loss of Sizemore/Lee in the same post is dishonest or stupid. Rather obviously, the Indians would have been far worse off had they decided Colon was worth the investment…
December 29th, 2008 at 8:22 pm
I’m all for bashing Pirates management but lets not forget that the inability to resign players really did hurt them. After they won the division in 92 they failed to resign Bonds/Drabeck. This was after losing Bonilla the year before.
December 29th, 2008 at 8:22 pm
How ridiculous — the MLB is far more imbalanced than the NFL, where there’s parity in the AFC and NFC (the Patriots aren’t even going to the playoffs this year).
December 29th, 2008 at 8:42 pm
After they won the division in 92 they failed to resign Bonds/Drabeck.
The Pirates chose to resign Andy Van Slyke instead of Barry Bonds. So, yes, bad management is a key here…
~
the MLB is far more imbalanced than the NFL, where there’s parity in the AFC and NFC (the Patriots aren’t even going to the playoffs this year).
Kinda like the Yankees not going to the playoffs, while the Rays winning the division…
December 29th, 2008 at 8:43 pm
IIRC, the Pirates thought resigning Van Slyke was much more important than resigning Bonds. Bonds 92 was, to the smart organization, probably the most valuable commodity to ever hit the free agent market, and was paid accordingly. That the Pirates failed to pursue him is about the quality and reasoning behind Pirates management, and not much else.
About 90% of CB whinging seems to be a variant of “my favorite team didn’t keep their best players forever”.
the MLB is far more imbalanced than the NFL
Based on what metric?
December 29th, 2008 at 9:05 pm
I don’t know what causes more imbalance in the NFL, but the NBA’s salary cap, or more precisely the exemptions to it, certainly do encourage dynasty construction. Which makes a lot of sense, since the NBA has been built around dynastic teams since at least the 1960’s.
December 29th, 2008 at 9:07 pm
Someone just ran the numbers, and while a full 20 teams have won the World Series in the past 30 years, only 14 NFL teams have done the same.
December 29th, 2008 at 9:08 pm
djw Says:
December 29th, 2008 at 8:13 pm
The notion that the Indians “had” to let their best talent walk requires accepting MLB propaganda about about profitability at face value. Given the quality of evidence they’ve produced for these claims, there’s no particular reason to buy it.
Furthermore, come on. “My favorite team doesn’t keep all their best players forever” isn’t evidence of a serious CB “problem”. Cleveland was a very good and competitive team from 94-01, went through a three year rebuilding cycle (getting all kinds of good talent via the draft and trades), rebuilt, and was a very good and competitive team from 05-07. Yeah, they may not resign sizemore. THe only reason they have sizemore (and lee) is they smartly traded Colon (whom they problaby told fans they “couldn’t afford to keep”) for them in 02. If they continue their excellent management, they’ll get something good (via draft or trade) if/when they let their current good players go, and they’ll continue to be a winning franchise.
So you think teams like the Indians are financially able to sign one (or multiple) guys to 6/100+ million deals? For most of the teams in baseball, one mistake on a guy like that is crippling for 5 years. For the teams at the top, and especially the Yankees, it doesn’t affect their ability to pursue other players.
And just to add, the Indians got very little “good talent” through the draft and their management has actually been extremely lucky. Cliff Lee and, especially, Grady Sizemore were not the key pieces to that trade. Coming out of a big trade for prospects with guys who actually turn into quality to star level players requires a huge amount of luck. I present the fact that the Indians are cited as a team that does it, yet Sizemore was a total throw in for that trade. They got nothing for guys like Richie Sexson, Brian Giles, or Sean Casey. The Roberto Alomar trade was a fiasco. Yeah, it’s possible for a small market team to make runs for a few years but it requires a huge amount of luck in the form of having a bunch of young guys who are at about the same stage developmentally all pan out. Meanwhile the Yankees and Red Sox are able to stay on top nearly indefinitely.
I guess if you don’t mind having a few teams that are really good nearly every year despite their management (anyone want to argue the NYY are well managed?) and the rest of the teams can rise up if things fall just right, then OK. But to say that there isn’t a huge CB issue in MLB is dishonest IMO. Other teams suffer for years when they break the bank on a bust like Mike Hampton. The Yankees just send Kei Igawa to the minors and give CC 160.
December 29th, 2008 at 9:13 pm
I’m not sure anyone thought it was “much more important” to resign Van Slyke (who cost a fraction of what Bonds eventually signed for) but I know he was a huge fan favorite which probably colored their decision(and got Bonds to cry racism numerous times). In any event if they had resigned Bonds and lost Van Slyke, Bonilla, Drabek, Smiley (am I missing anyone?) the team still would’ve been crippled.
I think everyone would agree money is important, and gives teams a huge advantage. However teams can win without it, and I don’t see any compelling need for a perfectly level playing field. Some people do…
December 29th, 2008 at 9:15 pm
Take some of the Big 4’s revenue from Champions League and give it to the Stoke’s or Middlesbrough’s of the world (and similarly give some of the EPL revenue to Colaship and lower division sides).
I’m not sure the lower-placed clubs would take that deal, at least not given the strings that would be attached to revenue-sharing and caps. At least, not the ones with relatively healthy finances and smart chairmen. Think of Man City’s recent passage from Thaksin to the Abu Dhabians, or the saga at Newcastle:
The era of the oligarchs (and Americans) may have inflated transfer prices, but it’s possible to run a tight shop, remain in the top flight, and possibly have a cup run or a shot at a UEFA Cup place. Dundee Utd isn’t going to win the SPL any time soon, but it’s also not likely to be relegated, and still gets decent attendances. It’s an imbalanced league, because trying to balance it would kill it. You could say the same about the Eredivisie or Ligue 1.
December 29th, 2008 at 9:16 pm
Al, disappointed to see you’re a sports-socialist.
Broadly speaking, it always amazes me that the focus on player salaries ignores the true market function–most of the high revenue teams have a ton of TV viewers, and can’t come close to meeting the demand for game tickets. The Red Sox could easily sell 10,000 more tix a game, thus the price of their tix are really, really high.
I prefer that a higher percentage of that money go to David Ortiz than billionaire John Henry. The ticket prices won’t change by a nickel either way, they charge what they can get (less really), expenses aren’t much of a factor.
December 29th, 2008 at 9:17 pm
“So you think teams like the Indians are financially able to sign one (or multiple) guys to 6/100+ million deals? For most of the teams in baseball, one mistake on a guy like that is crippling for 5 years. For the teams at the top, and especially the Yankees, it doesn’t affect their ability to pursue other players.”
That’s ridiculous. The deals the Yankees shelled out to Giambi, Damon, Rivera, Pettite, and A-Rod have been a major budgetary factor, and the Yankees have been minor players in the free agent market since signing Giambi. One of the main factors that’s being conveniently overlooked everytime someone wants to bitch about the Yankees is that the reason they have so much money is because they’re shedding the contracts of Giambi, Pettite, Abreu, Pavano, and Mussina. And, in fact, if they don’t resign Pettite or bring in another free agent, their payroll next season will actually come in under $200 million, *below* where they were last season. And Matsui and Damon’s contracts are coming off next season. That’s just another example of somewhat decent management.
December 29th, 2008 at 9:18 pm
Yeah, nanne’s point is a good one. All the little Euroleagues are not that well-balanced, but at the pan-European level it’s more competitive.
Loved Ape Man’s post too. Though the current Celtics are an interesting case since I guess they’re the favorites this year and they definitely were last year, and I don’t think you’d say they have the best player in the league on their roster. And they beat both the teams that could make that claim.
December 29th, 2008 at 9:34 pm
Also, and this is probably most important, most big money/lengthy contract free agent signings end up being huge mistakes.
December 29th, 2008 at 9:46 pm
Brien Jackson Says:
December 29th, 2008 at 9:17 pm
That’s ridiculous. The deals the Yankees shelled out to Giambi, Damon, Rivera, Pettite, and A-Rod have been a major budgetary factor, and the Yankees have been minor players in the free agent market since signing Giambi. One of the main factors that’s being conveniently overlooked everytime someone wants to bitch about the Yankees is that the reason they have so much money is because they’re shedding the contracts of Giambi, Pettite, Abreu, Pavano, and Mussina. And, in fact, if they don’t resign Pettite or bring in another free agent, their payroll next season will actually come in under $200 million, *below* where they were last season. And Matsui and Damon’s contracts are coming off next season. That’s just another example of somewhat decent management.
LOL so Pavano, Matsui, Igawa, Posada, Pettite, and Damon weren’t big outlays of money since the Giambi signing? Yeah, they sure were crippled in their ability to spend lots of money! The reason the Yanks were minor players was because they had guys at nearly every position on huge contracts!
And thanks for proving my point that, while it’s arguable a team like Cleveland may or may not be able to sign one or two guys to long term deals for huge money, the Yankees are only limited a bit when they have more than a half dozen of those contracts.
December 29th, 2008 at 9:59 pm
LOL so Pavano, Matsui, Igawa, Posada, Pettite, and Damon weren’t big outlays of money since the Giambi signing? Yeah, they sure were crippled in their ability to spend lots of money! The reason the Yanks were minor players was because they had guys at nearly every position on huge contracts!
You forgot Clemens, Randy Johnson, overpaying Cano . . . .
December 29th, 2008 at 10:06 pm
The NFL is good at money sharing, but all pro sports teams survive because their host city/state/region gives them a nice place to play their games. Out here in WA State, we have two new facilities, one for football/soccer and the other for baseball. Cost is over $600m. We don’t have a state income tax so the more players make, the less profit goes to the owners. But hey, who says the owners live in Washington?
The truth is that sports franchises are not interested in pay local taxes, and neither are their employees. They survive by avoiding taxes.
I think it is okay to get pissed off by high salaries, because they are paid for by the local economy, but the benefits go somewhere else.
December 29th, 2008 at 10:23 pm
So you think teams like the Indians are financially able to sign one (or multiple) guys to 6/100+ million deals? For most of the teams in baseball, one mistake on a guy like that is crippling for 5 years.
I do suspect many teams are capable of paying a fair amount more than they do in player salary and turning a profit, and they lie about it in order to a) try to screw the union, and b) try to justify soaking the taxpayers in their cities. But, of course, I don’t know that for certain and neither do you because the owners don’t open their books. They have a great deal more reason to lie about In that vein, yes, I suspect many of them could afford to give out a few more of these contracts, although a good portion of these contracts are actually a poor investment.
Coming out of a big trade for prospects with guys who actually turn into quality to star level players requires a huge amount of luck.
Signing high priced free agents for long term deals and having them earn their keep for the length of the contract requires a huge amount of luck as well. (As a Mariners fan, I notice you mention Sexson in the next sentence–getting nothing for him might have been better than signing him, depending on the length of the contract….) Of course many of the prospects they acquired in the rebuilding faze didn’t work out–but if you get enough of htem some of them will (as the Indians did, obviously, successfully enough to put together an outstanding team for three years).
Your team has found a model that’s kept them very competitive for 10/14 years, and they’ve got good talent going into the future. They’re a good franchise with a good future, because they’re well run. The fact is part of their successful strategy is to be stingy with long-term high end contracts, and rightly so.
I guess if you don’t mind having a few teams that are really good nearly every year despite their management (anyone want to argue the NYY are well managed?)
Yeah, given their financial constraints they’re reasonably well managed. Above average anyway. But yes, the Yankees are structurally advantaged, and that, combined with an unusually spendy owner, gives them a significant structural advantage. As a card-carrying Yankee hater, I don’t particularly like it either. But it’s pretty clear that by “some teams” you mean “the Yankees” and I refuse to let me righteous Yankee hatred be turned to support for policies that further enrich owners at player expense, and likely do very little to enhance the (already historically high) level of CB in baseball anyway.
December 29th, 2008 at 11:05 pm
Obviously by “financial contraints” I mean “financial advantages”
December 30th, 2008 at 12:00 am
AI you crazy fellow:) 90% of the Premier League teams are in debt, and heavily so — including the top four(no takers for Newcastle till now, been up for sale for 4 months). FA cup and Carling cup are great revenue distributers for lower league teams. I am not sure European revenue can, will or should be shared.
At the same time, a point of caution. Managers in FOOTBALL, have much much more of an influence than ones in NFL, or NBA.. Also, the success of a team depends on history and top management. There is relegation, a concept alien to American sports.So , if Sir Roy Keane takes Sunderland out of the wilderness or King Kev rescues Newcastle before both leaving/bailing out on their teams– it is more of a testament to their managerial abilities and die hard fan base.
Point in case, Leeds Utd. lurking in the lower divisions has a glorious history and a rock solid fan base(their manager just resigned and they might go further down). Fan bases are loyal in football and make for revenue even if a team fails.
Franchises in the US can get relocated to cater to market segments(Sonics/Thunder–in this case because of a greedy D-bag). Football franchises are pieces of history. Money is a factor, but identity and heritage far exceeds any talks of debt or bankruptcy until the club is in real dire straits.
Salary caps are a hot topic all the same. You only have to go to the BBC sports section to find an article every other day, since the FA can’t resist bringing the issue up. There is no correlation , though, as MY argues between salary caps and solvency of a franchise. Its more manager and management dependent.
BTW AI West Brom , if any club in EPL, needs money. Their manager is a purist , who doesn’t believe in big trades and has worked wonders with limited resources(sort of like a poor man’s Wenger).
December 30th, 2008 at 2:08 am
While that is indeed so, the fact remains that Scott Bora$ should still be executed.
December 30th, 2008 at 2:16 am
Matt,
This is the least correct thing you’ve written in the history of this blog. I’m not going to do any research to support this claim, but then, neither did you in making yours.
December 30th, 2008 at 2:16 am
Why? For being good at getting billionaires to give a little more money to millionaires than they otherwise might? Not the noblest calling I can imagine, but pretty harmless all things considered.
December 30th, 2008 at 3:05 am
Hello All,
Interesting discussion. I’ll leave the American sports to the people who know better. I just have a few questions regarding soccer/football, specifically the English Premier League. I am not trying to troll, I am just curious as to how Soccer teams are run in Europe. So, if anyone is knowledgeable and can help me, that would be great.
1. Is it true that some players in European leagues be “loaned” to other teams? How is this normally done? Does this mean teams like Chelsea or Man United stockpile players and loan them to teams like Preston North End or Queens Park Rangers? Can teams loan players to teams in different countries (Say Real Madrid loaning a player to a team in France, etc.)?
2. How is player development done in European Soccer (sorry, football) teams? For Baseball, we have minor leagues. For Football (American) and Basketball, we have college sports. How do teams develop talent in Europe? Do they sign kids to a “soccer academy” for a specific team when they are really young? Do the children join the teams closest to their homes (say someone living in Coventry, joining Coventry City) or do they go to any team? Does this mean that the larger teams (the ones normally in the Champions League) have an advantage over smaller market teams in developing new talent?
3. If you were an American investor, wouldn’t it be more profitable to purchase a lower division team (assuming the price is cheaper) and then working it up to the Premier League?
4. Is there standard UEFA rules regarding salaries and transfers, or does each individual league have its own rules?
5. How can a team like Coventry City or Sheffield Wednesday or Queens Park Rangers get back to the Premier League?
December 30th, 2008 at 3:19 am
Basketball also has the largest number of point-scoring events (posessions) per game (75/team), and the outcome of each event is roughly the same. Football has few point-scoring events but still has more game-advancing events than baseball (50-60 plays/team), so it’s slightly more volatile. Baseball has the fewest number of events (27 outs, ~40 at bats) and the potential for some point-scoring events to have 4x the effect of other point-scoring events, so it’s the most volatile.
I agree with all the posters who have pointed out that most european soccer leagues are grossly uncompetitive.
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December 30th, 2008 at 7:41 am
Commenting about Soccer/Football I’d make the following points.
The European national leagues are unbalanced for a number of reasons primarily as follows:
1) Unlike in the US there is minimal revenue sharing and this is unlikely to change. This is because teams are not just competing against each other in one competition. If Man U were to give up some revenue to competitors they would probaably at some point not qualify for the Champions League (top three teams in EPL qualify automatically) which is worth about 20 million GBP per season. Equally a mid table team could end up being relegated which has similar financial costs and is even harder to overcome.
2) Even Champions League revenue is not spread evenly. If ,say, both Rangers (SPL) and Man U(EPL)both got to the same stage of the Champions League then Man U would as a team from a bigger league get more money.
3)The leagues are national which is basically enforced by the structure of Leagues being part of national football associations that are members of UEFA. This means that you tend to have a few teams from larger cities that make a lions share of revenue in the league and the smaaller teams will never be able to compete without having a wealthy owner to subsidise losses.(Think Blackburn and Jack Walker).
Scotland is an extreme example of this with the two Glasgow teams having crowds of 40-60 thousand per week and multinational support and other teams being lucky to have a support of 15K and no large sponsors etc.
4) Again from a European perspective teams from smaller leagues make less money from sponsorship/tv than smaller teams from larger leagues.
Whilst I don’t have the exact figures to hand Rangers and Celtic which dominate the SPL and have multinational support make far less per season in TV money than the smallest team in the EPL.
December 30th, 2008 at 8:25 am
J. Robinson,
You should be aware that Posnanski’s article doesn’t really bolster your argument the way you think it does. He’s using the past 30 year in comparing the NFL and MLB, but the NFL has only had a salary cap since 1994. Comparing championships since the NFL salary cap was introduced there have been 11 Super Bowl winners versus 9 World Series winners and 18 Super Bowl teams Versus 17 World Series teams.
Personally, I believe the NFL and MLB are about equal in terms of balance, but there are plenty of arguments either way. Using the past 30 years to make your case is either foolish or dishonest though since there was no salary cap in either sport for most of that time.
December 30th, 2008 at 8:25 am
I just commented about this on another blog. American professional team sports is by far the most socialistic system in the democratic world. Nowhere else do all the major teams start off with a chance of winning the country’s major championships every year.
The 0-16 Detroit Lions will still have a chance to win the Superbowl next season and will even get some help in doing so, with a high draft pick and weaker schedule. In any other system, they would have been relegated to the second tier league.
I’m a Leeds United fan and they won’t even have a chance at winning the Premiership until the season after next (2010-11) at the earliest.
It’s ironic that, with revenue sharing, publicly funded stadiums, salary caps, drafts, and unbalanced schedules, the country that is the epitome of capitalism in the free world has the most socialistic professional sports systems there is.
December 30th, 2008 at 9:16 am
Anyone who thinks a salary cap in baseball will produce lower ticket prices misunderstands how prices are set in a capitalist society. Products aren’t priced based on the cost of production but based on the level of prices that will maximize revenues. As long as the Yankees keep selling out their stadium game after game, what possible incentive would they have for lowering ticket prices? If anything, their incentive is to keep raising prices until they can’t sell tickets any more. You know the expression–”What the market will bear.”
So those sports fans who are constantly bemoaning the fact that a poor family can’t afford tickets to a game–you can blame the athletes all you like, but the reality is that the poor families have simply been crowded out by the well-to-do businessmen who are willing and able to spend $75 or $100 per seat.
December 30th, 2008 at 9:47 am
“As it happens, uncapped sports like Major League Baseball and many European soccer leagues have more balance than does the NBA or the NFL.”
You’re way off on European soccer leagues having balance. In England, one of the “Top 4″ teams–Manchester United, Chelsea, Liverpool and Arsenal–is nearly a 100% lock to win the league every year. In Spain, Barcelona and Real Madrid trade off as champions. In Italy, AC Milan and Inter Milan are dynastic in their dominance of Serie A. The same can be said of Bayern Munich in Germany.
Soccer in Europe works much like baseball does here. The richest teams in big market cities (any team in New York or London) are always the favorites to win. Teams in small markets (i.e. Tampa Bay or Hull City) can only be competitive if they employ an incredibly savvy general management strategy.
December 30th, 2008 at 10:01 am
Al wrote:
The EPL actually exists because the top-flight teams got tired of sharing revenue with the lower divisions of the Football League and broke away. While there is still promotion and relegation between the EPL and the Football League, it is a completely separate organization. It will be a cold day in hell before they give a single pound to the lower division sides.
Additionally, Liverpool and ManU are in debt because their current (American) owners took on the debt in order to complete their respective leveraged takeovers. In other words, the new owners took teams with no debt and borrowed against the team’s assets in order to finance their purchases. That debt is now on the books, and very real, but it’s not a result of operating losses. I believe Arsenal took on debt in order to finance their new stadium.
December 30th, 2008 at 10:17 am
The NFL owners aren’t socialists, they’re a cartel. They’ve recognized that they aren’t 32 individual businesses competing against each other, but 32 organizations that each own an equal share of the larger business, the NFL itself. Recognizing that no team can prosper unless the entire league prospers is something that a lot of MLB owners could stand to learn.
The Lions may have a shot at a championship next year, although that’s unlikely as long as Bill Ford owns the team.
You overstate the advantages the NFL grants to losing teams. High draft picks are nice, but an NFL team is comprised of 53 men. A few talented rookies can only make a limited impact, especially on a team as woeful as the Lions. And strength of schedule only affects two games out of the 16 game season. All of the other games are pre-planned no matter how many games your team wins.
The key feature in the NFL is randomness. A key injury, a few bad calls or a underachieving superstar can turn a winning season into a losing one.
December 30th, 2008 at 10:56 am
As a soccer geek, Euro soccer leagues are very, very VERY UNbalanced. For example, it’s been over 20 years since a team other than Rangers and Celtic have won in Scotland. And I think there’s only been something like 1 time in the last 20 years that even another team managed SECOND place. In Portugal, I think the stat is that their Big Three have won all but 1 or 2 championships in the last 75 years. It’s been over 5 years since England’s Big Four had one of its members not qualify for the Champions League. (OK, one year Everton finished ahead of Liverpool but Liverpool qualified as holders. Still.) In Euro Soccer, it’s like baseball from the 20s to the 60s. In the AL, the Yankees dominated, and in the NL, whichever team had Branch Rickey in charge dominated.
December 30th, 2008 at 11:00 am
“I don’t know about soccer but Matt’s right about the other sports. A great baseball team will win 60-65% of it’s games but a great basketball or football team will win 80%.”
Right, but that’s not because of salary caps. That’s just the nature of the sport. In baseball, teams have to win 3 rounds of playoffs. A team can be average in 23 roster spots, have 2 great pitchers, and they’re a threat to win the Series because of all the damn off days. You can’t really use the World Series because the way baseball is now, it’s borderline random who wins. It’s basically a different sport in the postseason, with the tremendous number of off days. In the regular season, your #5 starter is important for winning games. Your #3 reliever has to deliver once a week or so. In the postseason, the mascot is almost as important.
December 30th, 2008 at 11:01 am
@59. Fighting Words.
1. Yes. They can be loaned throughout Europe. Heck, you could even loan it to a South American/Asian/North American team , but all loans have to be approved by the FA. It is actually a good system. If a player is not a good fit for one team, but might be in the future, he can get starts at another. The teams who have developed good players through their youth academies often loan out the birghtest to get them some action. Works both ways. e.g.:- If someone can’t get starts at Arsenal, Wenger would call up lets say Phil Graham(Hull City) and tell him he could have the player for a period and he is a good lad. Conversely, if a lower level team like Coventry(which actually has a good youth system) has developed someone like Wilshire or Walcott(both Arsenal products), they can be traded for good revenue.
Stockpiling does occur. But all teams have their youth systems and it works out well for the most part.
2.Youth academies. Scouts see school soccer and initially the kids may join the closest academies but when they are out of school there is a rush to sign them. Michael Owen had interest from all the top four clubs, before he decided on The Reds as a 16 yr old(I thik). Right now, Everton and Arsenal have the best youth systems. But the good thing is, you never know where talent is gonna pop up.
3. Tell that to the owners of Liverpool and Man Utd. Success is measured in terms of revenue and European cups and league titles. Very thin ice on which managers can maneuver.
Actually some investers have gone that way, and QPR is now a “boutique club”. Don’t ask me what that means, but they have put up shopping malls and fashion shops round the place and the season tickets have gone up by 60%. People want instant success or money, but that would be a very good route you suggested. Problem is, even in the Championship, there is huge amounts of money available to the top 3-4, compared to the rest, and it takes quite the skilful manager(Keano or King Kev) to move them up to the Premier League.
Plus, most English folks see the Americans as greedy fat cats-a reputation built over time, deservedly or undeservedly. So ownership issues are slightly sentimental.
4. UEFA rules enforced by FA. Some rules are country specific (work permit et al), but in general , there is a uniformity.
5. Aren’t that the billion dollar question:)
December 30th, 2008 at 12:19 pm
KC,
Thanks for the info.
December 30th, 2008 at 12:54 pm
A team can be average in 23 roster spots, have 2 great pitchers, and they’re a threat to win the Series because of all the damn off days.
This is widely asserted, but pretty much always without evidence. Obviously top-heavy rotations are a slight advantage in a short series, but the claim that pitching matters more than offense (not to say defense!) in the playoffs in baseball has no empirical basis. Yeah, it’s pretty random who wins once your in, but that’s because of the whole 60-65% thing, not anything different about the game.
December 30th, 2008 at 1:06 pm
errata:Phil Brown instead of Phil Graham(happens when you type too fast!)You’re welcome Fighting Words.
December 30th, 2008 at 1:08 pm
Something to keep in mind regarding the differences between the NFL and the NBA is the different -implementations- of the salary cap. In the NFL, a bad signing can be gotten out from under relatively quickly, as long as the team in willing to eat a loss. In the NBA, a bad signing can cripple you for years. There is NO getting out from under it.
December 30th, 2008 at 1:31 pm
“Successful sports franchises generate a ton of revenue since a lot of fans are interested in them.”
You’re right about that. With huge ticket prices, exclusive gear deals, video game rights, television rights, professional sports has become big business.
Instead of just capping player salaries, I’d argue that instead people stop going to games, stop watching them on TV, stop buying the gear, playing the games.
Of course, that’ll never happen.
December 30th, 2008 at 2:52 pm
Depends on the evidence you look at. If you look at just the World Series winners, there’s not as much difference. But if you look instead at who’s competitive, you get a better overall view IMO. Look at the terrible, come-from-nowhere teams that challenge the favorites, and generally they’re built around one or two superstar pitchers, and maybe one star hitter who can make a difference in a close game. Otherwise known as the Dodgers way.
The reason those teams rarely win, IMO, is that the Yankees (for example) can often match the pitching, and then throw in all-star position players whereever they want. Or the Phillies, this year.
Or look at the counterexample. When was the last time a team with great hitting, and terrible pitching, was unexpectedly good, let alone won the Series? The opposite happens routinely. If pitching didn’t matter more than hitting, you’d see those teams win a lot.
December 30th, 2008 at 2:55 pm
Which goes with my other theory that the basketball court is too small for today’s giants…. And don’t get me started on the impossibility of determining fouls and how fouls in basketball are more determinant of the outcome than any other sport, thus wrecking it.
All very true, but basketball is STILL the best sport in the world, even with all these disadvantages. One can only imagine how good it would be if you could somehow address them. You couldn’t expand the size of the court, since distance from the basket itself is the limiting factor and most of the extra space would go unused, but I think the sport would be improved by going to four on four instead of five on five.
Also, as Kolohe pointed out above, basketball is imbalanced because single exceptional players make more difference than any other sport. If you wanted to make the sport more balanced you’d have to regularly redistribute the stars, make it *harder* for their own teams to resign them when they became free agents. That would disrupt team continuity in negative ways. I think the NBA has struck a decent balance. But the league would have been improved over the last five years or so by some conspiracy that allowed them to get rid of the Spurs. SO boring.
December 30th, 2008 at 3:41 pm
“Obviously top-heavy rotations are a slight advantage in a short series, but the claim that pitching matters more than offense (not to say defense!) in the playoffs in baseball has no empirical basis.”
I didn’t say that pitching matters more than hitting. I said that extra off days affect pitching a hell of alot more than hitting. Absent injuries, field players get a day off a month or so. They play 150+ games. But even star pitchers don’t get 40 starts in a season, they don’t start 1/4 of their teams’ games. In the postseason it’s routine.
December 30th, 2008 at 3:42 pm
I believe that sports ought to be fair – meaning that the teams should compete based on their physical and mental abilities, and otherwise be on a completely level playing field. Competing by increasing payroll is simply inherently unfair, and ought to be discouraged to the extent possible.
I want what Al wants. But I don’t think games won per $ payroll will be a great metric of fairness. Why? Because bad management overpays for players. Their payroll will be high, but outcomes poor. No salary cap allows big revenue teams to spend even more to soften the blow of those mistakes (e.g. the Yanks), but with a salary cap, a high-payroll team can suck for years (e.g. NY Knicks). The latter is bad for competitive balance in outcomes, but that’s the wrong metric. We want competitive balance in inputs. Using that metric, when a team overpays and then sucks, that’s a good thing.
Note that consistent application of the Fairness Doctrine means that a salary cap should apply to anyone ownership pays, including GM’s and coaches.
December 30th, 2008 at 5:03 pm
Dave in R: OK, the way you’ve put it in 84 is reasonable and correct. But it’s also not big enough–logically or empirically–to sustain the radical claims you made earlier (It’s a different game in the playoffs).
L2P, I’m unclear on what point you’re trying to make.
When was the last time a team with great hitting, and terrible pitching, was unexpectedly good, let alone won the Series? The opposite happens routinely. If pitching didn’t matter more than hitting, you’d see those teams win a lot.
This is framed all wrong, because there’s no acknowledgement of defense. Tampa had an above average rotation who looked like stars because they had the best defense in the league by an order of magnitude. Rather obviously, hitting is much more important than pitching, and equally as important as pitching/defense. I’ve certainly never seen anything approaching compelling systematic evidence to the contrary, and it’s been pretty thoroughly studied.
December 30th, 2008 at 5:59 pm
Look at the terrible, come-from-nowhere teams that challenge the favorites, and generally they’re built around one or two superstar pitchers, and maybe one star hitter who can make a difference in a close game. Otherwise known as the Dodgers way.
Mind you, this approach garnered the Dodgers one single postseason game won from 1989 to 2007.
December 30th, 2008 at 6:35 pm
You don’t think Kazmir’s a little better than “above average?”
Hitting’s more important for winning consistently. An ace pitcher gives a team a chance to win any day that pitcher plays. Play statomagic, or head-to-head rotisserie leagues, and you’ll probably see that, over time, hitting does usually win because it’s more consistent. But you can beat almost any team, no matter how good, with ace pitching and nothing else.
As for defense, you can get any number of gold-glove caliber defensive players for the league minimum. Nobody cares about it unless it’s matched with hitting, except at two positions.
December 30th, 2008 at 7:42 pm
Yes, Kazmir is better than above average, but the rotation as a whole is solid but not great. Kazmir is very, very good, but his defense makes him appear to be somewhat better than he actually is.
An ace pitcher gives a team a chance to win any day that pitcher plays.
This is just a weird thing to say. Every team in MLB has a non-trivial chance to win every single game. Have an “ace” pitcher increases your chances of winning any one game mildly over an above average pitcher, and somewhat more than that over an average pitcher, and so on. And what you call ace pitching almost certainly doesn’t exist on teams with bad defense, with the possible exception of extreme strikeout pitchers. Obviously, the starter is the most important player in any given game, so they matter more than any one hitter, but not to the degree you are suggesting. The best pitchers in the game still have so-so games with some regularity.
As for defense, you can get any number of gold-glove caliber defensive players for the league minimum. Nobody cares about it unless it’s matched with hitting, except at two positions.
Some GMs still think like that, but they’re very, very wrong, and they’re losing their jobs because of it (see: Bavasi, who a) carelessly and casually dismantled an exceptional defense, and b) signed mediocre pitchers whose defenses made them look better than they are, all of which lead to a catastrophe he couldn’t comprehend).
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