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2009 Fall Issue 6 (October 30, 2009)

Born in the USA: Baseball, where the rich get richer

October 30, 2009
By David Sacks

The World Series is a time of celebration for the two teams that made it through the marathon 162-game regular season and first two rounds of the playoffs. In this World Series, the New York Yankees are looking for its 27th championship, while the Philadelphia Phillies are looking to become back-to-back World Series champions. However, while Yankees and Phillies fans are celebrating their teams’ success, many fans are thinking of what could have been.

Major League Baseball, operating without a salary cap (only a luxury tax), is a league in which parity does not exist. This year, the Yankees had a payroll of $201.4 million, compared to the Florida Marlins’ payroll of $36.8 million. The Yankees employ three of the four most highly paid players in baseball, including Alex Rodriguez, who earns just three million dollars less than the whole Florida Marlins roster. The Phillies, while not coming close to the Yankees in spending, had a payroll of $113 million this year, the seventh highest in the league.

So what is the World Series? It is essentially a showcase of high priced free-agent talent, who left small markets that could not afford them and signed on with teams with the most revenue and money to spend. While evaluating talent and making keen signings and trades is certainly valuable to baseball general managers, for the Yankees and other big market teams money is not an issue. If they throw enough money at a player, he will come.

So what is the flip side? Fans of teams such as the Cleveland Indians and Kansas City Royals will watch the World Series and look back nostalgically at players whom they saw mature into baseball stars before bolting to the highest bidder. Cliff Lee and CC Sabathia, two of the best pitchers in baseball, faced off in game one of the World Series and impressed fans around the country with their dominance. When both were with the Cleveland Indians, they won the Cy Young award, which is given to the best pitcher in each league (Lee in 2008 and Sabathia in 2007).

Indians fans did not have much time to celebrate, though. Sabathia was traded to the Brewers before becoming a free agent, and later signed a contract worth $161 million with the Yankees. Cliff Lee, who has one more year on his contract before becoming a free agent in 2010, was traded to the Phillies in exchange for prospects because the Indians did not think they could re-sign him.

Any fan of a small market franchise can repeat almost the same story. The Kansas City Royals resurrected Raul Ibanez’s career and gave him an opportunity to be an every-day player. They allowed him to struggle in the starting lineup and learn how to be a productive hitter. Then, he left for the Seattle Mariners, where he became a hitting machine. The Royals also took a chance on Johnny Damon when nobody else would, taught him to be a productive hitter, before he became too good for the Royals to be able to pay, and he had to be traded. Both Damon and Ibanez are now starting for the Yankees and Phillies, respectively, in the World Series.

The two realities for baseball fans could not be any more different. Fans of the Yankees, Red Sox, Mets and Cubs lick their chops when stars of small-market teams become free agents, because they know their team has a chance of signing them. These fans count down the days until players like Matt Holliday and Joe Mauer are free agents. Fans of teams like the Minnesota Twins, Florida Marlins and countless other teams watch players mature and become productive, and fear the day that these players leave and go where the most cash is.

This reality will not change under these conditions. The Yankees, Red Sox and other big-market teams make so much more money than teams like the Marlins. Teams like the Marlins cannot even sit at the same table to negotiate with these star players. However, the Yankees can’t be blamed for using their money to put the best possible team on the field – no matter the cost. For this to change, Major League Baseball would need to step in, instituting a salary cap as well as a salary floor, which would force every team to spend a certain amount of money.

Unless something changes, year after year the World Series will be a time for fans of big-market teams to celebrate while everyone else just thinks of what could have been, if their team had the resources to keep their best players and be competitive.

-David Sacks is a Carletonian Columnist

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