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Economics of Baseball versus Basketball

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Offline  Economics of Baseball versus Basketball
#1

Posted: July 16, 2007, 4:32 AM Post
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I was just reading some of the off-topic thread about Mo Williams and it got me thinking. What if MLB went to a similar system as the NBA, with "maximum contracts" etc, and rules governing that the "home team" can pay a player much more than another team looking to pry him away could.

Granted, there are more players (25 to 12), the use of a minor league system etc that don't exist in basketball, etc, but I'm wondering if this might be a good way to help keep Elite Players with Smaller Market clubs.

I really doubt the Milwaukee Bucks (or other non top-5 teams) could keep their top players in the NBA unless they were allowed to pay significantly more than other bidding teams. While this might encourage mediocrity (see Milwaukee bucks resigning all the key components of a dreadful team last year), it also would hope to the Minnesota Twins and Milwaukee Brewers of the world (if applied to MLB) in efforts to keep players such as Santana, Hunter, Sheets, Lee, etc...

Granted, teams would still need to pay massive amounts of $$$, but this would prevent teams from severely overpaying the market for mediocre talent, and would remove the "financial incentives" of going to a much bigger club...

Thoughts?

I will concede the the small market clubs in baseball the past 4-5 years have been much more competitive, (due to an excellent use of farm systems and superb general managers), but I think MLB could be even better if top players stayed with their clubs for their entire careers


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Offline  Economics of Baseball versus Basketball
#2

Posted: July 16, 2007, 4:57 AM Post
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Good luck getting the players to agree to it. A-Rod would lose out on $10+ mil a year.


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Offline  Economics of Baseball versus Basketball
#3

Posted: July 16, 2007, 5:03 AM Post
Posts: 326
Did you see the contract that Rashard Lewis just got from the Magic??

There are poor GM's in both sports

In all seriousness, Baseball could go alot further in helping out the smaller franchises, But it is 10 times better than where baseball was at 5-10 years ago (Rookie Contracts, Arbitration years, Revenue Sharing, etc).

The only upside that Baseball has over Basketball is that Baseball has profit sharing. While all the teams in basketball pretty much spend the same, some teams still make a rediculous profit while other teams turn a loss annually ( the bucks).

Edit - sorry about the language


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Offline  Economics of Baseball versus Basketball
#4

Posted: July 16, 2007, 5:15 AM Post
Posts: 241
The Knicks just payed 46.5 million in luxury taxes.


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Offline  Economics of Baseball versus Basketball
#5

Posted: July 16, 2007, 5:19 AM Post
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I don't think you can look at the two without a focus on how the contract systems came into place.

Basketball has a salary cap; baseball doesn't. The NBA's cap was severely loosened when the league and the teams agreed to the "Larry Bird rule" which allowed teams to go above their salary cap in order to sign its own free agents.

Due to the teams' inability to restrain themselves on the open market, additional exceptions to the cap were created (I think they have 2 currently: a mid-level, and a full, but I don't really follow the NBA much anymore). The notion of a "sign-and-trade" deal has also emerged as a way to use the Larry Bird exception to allow the receiving team to pay the player more money.


The MLB is far more of a free-market environment: there's nothing stopping the Texas Rangers from paying A-Rod $25-million a year for a decade....just like there's nothing preventing them from continuing to pay half of that amount for A-Rod to play for someone else. (About the only restriction at play there is that A-Rod can't agree to lower his salary in order to be traded....which is why he's not wearing a Red Sox uniform, IIRC.) Likewise, an MLB team has far greater freedom to trade a player(s) to serve their long-term interests. An MLB-style "fire sale" would violate NBA rules for contracts. (Can you imagine having to take on contracts nearly as bad as the ones you were getting rid of?)

I don't think you get to the Larry Bird rule without first imposing a cap on salaries....and that's not something that the Player's union has ever been in favor of. Without a cap, the only real change would be that teams like New York would put more effort into acquiring potential free agents before the trade deadline (players which they could then pay more for after the season).


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Offline  Economics of Baseball versus Basketball
#6

Posted: July 16, 2007, 6:09 AM Post
Posts: 326
Quote:
The Knicks just payed 46.5 million in luxury taxes.


Yeah, for a 35 win team.

And the only reason they paid anything is because their owner and General Manager are idiots.

The next closest team in the league in terms of luxury taxes is the Dallas Mavericks at 7 million.

The Knicks just payed about 150 million in salaries for a 35 win team. Nice job Isiah.


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Offline  Economics of Baseball versus Basketball
#7

Posted: July 16, 2007, 6:26 AM Post
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The bigger problem is not having a worldwide draft, IMO. The way it's done now is pretty insane.


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Offline  Economics of Baseball versus Basketball
#8

Posted: July 16, 2007, 9:09 AM Post
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If I could change two things is would be to go to a world-wide draft and allow draft picks to be traded.


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Offline  Economics of Baseball versus Basketball
#9

Posted: July 16, 2007, 10:06 AM Post
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I'm all for any sensible plan that gives a leg up to the little guy and limits the yanks.

A salary cap isn't sensible though so I wouldn't go in for that. World wide draft would be nice for sure.


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Offline  Economics of Baseball versus Basketball
#10

Posted: July 16, 2007, 12:37 PM Post
Posts: 326
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A salary cap isn't sensible though so I wouldn't go in for that.


Why isn't a salary cap sensible.

I am not talking about a hard one like in Football.

I am talking about a soft one like in Basketball that would deter teams from going over a certain dollar limit.

Hell Baseball already has one, sort of. The only problem is that it is at 160 million dollars and the only team it affects is the Yankees.

Of the top 7 teams in the AL, 5 of them are in the top 6 in the AL in spending, or have a payroll over 95 million.

Of the top 7 teams in the NL 4 of them are in the top 6 in payroll $90 million spent on their rosters.

So who are these 4 total teams that have a top 6 payrolls in either league and not in the hunt for the Playoffs??

The Cardinals ('06 Champs), White Sox ('05 Champs), and the Giants ( a geriatric Center)


I think that a serious soft cap is very sensible and really one of the only things that can level the playing field so that Baseball can become a serious sport again and not put half of the franchises at a serious disadvantage from opening day.

A cap at 85 million so teams cannot sign any more free agents and a hard cap at 105 million where teams spending over that have to pay a dollar for dollar luxury tax.

Also a minimum team salary of 60 million where if you spend less than that you get less assistance from big clubs.


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Offline  Economics of Baseball versus Basketball
#11

Posted: July 16, 2007, 1:04 PM Post
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It only affects the Yankees because no way does Major league owners allow it to affect more teams. Keep in mind you need almost all owners agreeing to somethign to get is passed (like 25 out of 30).


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Offline  Economics of Baseball versus Basketball
#12

Posted: July 16, 2007, 1:44 PM Post
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I think the NBA contracts are a complete joke....backup players get $7M a year!! The NBA is the biggest mess of pro sports. NFL is the best. I also like MLB right now and wish they could add some kind of advantage to a players first team. A franchise tag would be cool in MLB.


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