Since baseball’s first World Series in 1903, the Yankees have
won 26 championships — almost one out of four. No other team, in
any sport, has had that kind of long-run success.
Cynics say they bought those championships. By playing in the
country’s largest market, the Yankees benefit from the league’s
highest revenues. This year’s 25-man roster will be paid a record
$209 million. That’s hard to compete against. No other team comes
within $70 million of that.
Sounds like a good argument for a salary cap. Other sports have
caps, and they work pretty well. Baseball does have some
revenue-sharing and a “luxury tax” on big-spending clubs. Not
enough, some say.
I’m not convinced. Baseball’s Davids are finding creative ways
to out-compete the Goliaths. A salary cap would take away the
incentives for this creativity. A cap is unnecessary.
TRUE, SOME TEAMS have won championships by copying the Yankee Way.
In 1997, the Florida Marlins spent lavishly on star players, and
won a championship. They did it again in 2003.
But without those New York revenues, they couldn’t sustain it.
Fire sales were held after both championships. The Marlins went
right back to the bottom of the standings, their glory
forgotten.
So much for that strategy.
Oakland A’s GM Billy Beane was one of the first to really try
something new and creative. He realized that two stats nobody else
cared about — on-base percentage and slugging percentage — had
more to do with winning games than more traditional stats like RBIs
or batting average.
He exploited this hole in the market. Other teams didn’t want
his kind of players, so he was able to get them on the cheap.
Oakland has consistently outperformed its tiny payroll — currently
third lowest in baseball — for a decade now.
This kind of strategy only has temporary success; holes in the
market get filled. Other teams noticed Beane’s success, and copied
him. The big-spending Red Sox have even hired legendary statistical
guru Bill James to assist in their player evaluation. Beane’s
“Moneyball” approach has lost its competitive advantage. Everyone’s
doing it now.
BUT BEANE ISN’T the only creative small market executive. Teams
like the Minnesota Twins, Milwaukee Brewers, and Cleveland Indians
look at it this way: the big teams get most of their advantage by
signing smaller teams’ stars away in free agency. The solution,
then, is to dry up the free agent market.
How to do this? One, lock up players while they’re young and
cheap. Buy out a year or two of free agency. Players have to be in
the league for six years before they can become free agents. Buying
years of that out in advance means a player will be a seven or
eight year veteran before he starts checking New York real estate
prices. Most players are past their prime by then.
If the Yankees want to poach a player before then, make them pay
a steep price to get him in a trade. Make them mortgage their farm
system, or lose a solid veteran in return.
Two, invest heavily in scouting. Keep a constant inflow of young
talent to replace departing stars. The Brewers have done this to
the letter. Their top scout, Jack Zduriencik, is the only non-GM to
ever win the Major League Executive of the Year award.
Unlike the Moneyball strategy, sabotaging the free agent market
is sustainable in the long run. This year’s free agent market was
dry as a bone, almost devoid of big names.
This year’s biggest deal still involved a big name; the
Minnesota Twins lost pitcher Johan Santana to the New York Mets.
But it wasn’t a free agent signing. It was a trade. The Twins got
four of the Mets’ best prospects in return. If Santana had left as
a free agent, they would have received nothing.
MEANWHILE, THE INDIANS just locked up 24-year old pitcher Fausto
Carmona through 2014, buying out two years of free agency. Colorado
Rockies shortstop Troy Tulowitzki, 23, is also staying put.
Small-market Milwaukee ‘s young talent is the envy of the
league. Prince Fielder is the youngest player to ever hit 50 homers
in a season. Ryan Braun is the reigning NL Rookie of the Year. Both
are still young and affordable. Both are in talks to stay in
Milwaukee, and off the free agent market.
These teams are proving that you don’t need a salary cap to
bring parity to baseball. You just need a little creative
investment in the future.
