Why MLB Should Have a Salary Cap Instead of a Luxury Tax

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Andrew Dawson, Staff Writer |

Major League Baseball (MLB) is considered America’s favorite pastime, but fans are getting tired of watching the same teams compete in the playoffs every season. Unlike professional football or basketball, the MLB uses a luxury tax instead of a salary cap. The luxury tax creates an unfair advantage for big-market teams. This is because the luxury tax allows teams to spend more money on their rosters than others.

For years, baseball fans have continued to hear about the dominance of big market teams. The playoffs wouldn’t be complete without the New York Yankees, the Houston Astros and the Los Angeles Dodgers in title contention. What do all these teams have in common? They are big market clubs that can generate more money for ticket sales and other sales promotions. This is an unfair advantage because they can spend more money on their rosters than other teams can afford with the luxury tax.

For example, the Yankees can afford to sign big-name players like Gerrit Cole for $324 million. Cole signed with the Yankees back in 2019, becoming the highest-paid pitcher in MLB history. The Yankees can also afford to trade for popular players with expensive contracts. Giancarlo Stanton signed a 13-year deal with the Miami Marlins worth $325 million back in 2014. The Yankees traded for Stanton in 2017, taking on the biggest contract in MLB at the time. According to Baseball-Reference, the Yankees total payroll for the 2021 season is worth $216 million of guaranteed money.

The Pittsburgh Pirates are a small market team that can’t afford to spend the same amount of money as big market clubs. According to Baseball-Reference, the Pirates total payroll for the 2021 season is worth only $53 million. This is a huge difference in total spending for those two teams. The luxury tax makes it extremely hard for small market clubs to compete at the highest level. The Pirates have played 116 total seasons and only made the playoffs 17 times in the history of the franchise. The MLB’s luxury tax has created a narrative that most other professional sports don’t have. This narrative is that, to win a championship, you must outspend the rest of the league.

Professional basketball and football use a salary cap to give every franchise a competitive chance to win. In the NFL, the Green Bay Packers and the Pittsburgh Steelers are considered cornerstone franchises. These two teams are in the playoffs almost every year although they are smaller market areas compared to New York or Los Angeles. If the NFL implemented a luxury tax like baseball, then these two teams would most likely not be competitive. The New York Jets or the Los Angeles Rams could afford to outspend the rest of the league because they can generate more money. Therefore, the MLB needs to create a salary cap instead of a luxury tax.

If the MLB uses a salary cap, every professional team has a competitive chance to make the playoffs or win the World Series. All teams would be placed on a level playing field to compete. This is why a salary cap would help the game of baseball. Baseball isn’t about winning on the field anymore. It’s about winning in the front office.

One problem that originates with the MLB creating a salary cap is players would most likely make less money. While baseball doesn’t hold the biggest contract in sports, they consistently spend the most money. According to CBS Sports, the MLB has eight out of ten biggest contracts in sports today. There would also be less guaranteed money for professional athletes. Currently, all MLB contracts are fully guaranteed. If they created a salary cap, this would change. The Major League Baseball Players Association would not allow a salary cap to happen. Professional athletes care more about their contracts than the sport’s best interest.

The MLB needs to implement a salary cap if they want to make fans happy and their league more competitive. Many fans continue to stop watching baseball due to having the same teams in the playoffs every season. If the MLB wants to keep baseball as America’s favorite pastime then they must replace their luxury tax with a salary cap. This will make their league more competitive and may give fans a chance to watch their favorite teams compete in the World Series.

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