Everyone woke up Sunday to the news that Tarik Skubal was going to the LA Dodgers for the relatively small price of a Top-50 level prospect and two post-surgery wildcards. Any other team in baseball could have offered up that much, but they didn’t. This immediately caused an uproar that we will not have baseball in 2027 as this was the final straw that makes MLB’s current labor/financial situation untenable. Screams of “salary cap” echo through the far reaches of every MLB fanbase. Let’s just take a minute to see how we got here.
The Dodgers Were Given Special Treatment
The NFL shares damn near all of its broadcast revenue, more than $12b per year. MLB does not do that. There is some revenue sharing, but for the most part teams have their national revenue and their local revenue in two different pots. Some teams found their local revenue situation spontaneously dry up when Diamond Sports stopped making payments after gobbling up a ton of broadcast rights contracts. One team that does not have that problem is the Dodgers.
The Dodgers went from a financial mess with previous owner Frank McCourt to a Scrooge McDuck style moneybin with Gugenheim Partners. Before he was basically forced to sell, McCourt attempted to sign a deal for TV rights with Fox worth $3b over 30 years. Most teams would kill for that kind of guarantee, but the Dodgers rights were simply worth a ton more than that. MLB stepped in to kill the deal and succeeded. Instead, after the team was sold, the rights went for over $8b!!!
But wait, there’s more. Due to the complicated nature of Bankruptcy Court rules mixing with the Collective Bargaining Agreement, MLB needed to make a claim on the revenue sharing dollars they were expecting from the Dodgers. Because of the nixed Fox deal, they based their figures on that amount, not some other projection. That number is still being used 15 years later despite the real $8b number it should be based on.
What ends up happening is that not only are the Dodgers shortchanging baseball by tens of millions for revenue sharing purposes, but they get to keep hundreds of millions more than other teams. When the Mets spend money, they lose money. When the Dodgers spend money, they still make money.
Despite arranging this objectively unfair situation themselves, the Owners will use it as a way to cry poor.
The Salary Cap Isn’t the Real Issue
Why am I bringing all this up? Because the single biggest issue in baseball labor is not a salary cap but the unfair distribution of money. The Owners want a salary cap because it means that no matter what happens, they can be guaranteed to be more competitive (in theory) while getting maximum profit from their broadcast deals. That sounds pretty good right? Well, I’m not here to tell you it isn’t, I’m here to tell you that the players want the exact same thing! Yes, really.
There are many current bargaining issues out there designed to gaslight the other side and get the public distracted. The true issue though is revenue sharing. The Owners want some additional revenue sharing between the clubs, enough to ensure that a $170m salary floor among teams would keep everyone in the black. The money that isn’t shared is essentially pure profit for the Owners to do with as they please. The Players, however, want the teams to share ALL OF IT. That, along with a salary floor would guarantee much more spending by all of the clubs but still allow players to be paid as the market has dictated. It would also still guarantee a profit for all the teams, just less so for the big clubs like the Dodgers, Mets, Yankees, and Phillies.
Finance BS
The Owners are crying poor and demanding a salary cap to fix it. What they will not do though is open their financial books to the Players. They want to base their cap numbers on baseball revenue, but are only willing to concede certain portions of that revenue. So, it’s 50% of what the players know about. That seems fair right?
The Owners are telling the Players to trust them despite 60 years of history suggesting just the opposite. Both sides know that is silly. That’s why the Dodgers are being displayed publicly as what is wrong with baseball. The Owners want the fans to side with them and the Dodgers getting Skubal only helps with that messaging. It’s not fair! Well yeah, of course it isn’t fair.
The Owners have made it clear that at no point have they ever really wanted this to be fair. They want to ensure that every team makes maximum profit. Small markets will make even more guaranteed profit and not look cheap in the process while large market teams will not be able to just use financial muscle to make small markets feel bad. In exchange they MAKE EVEN MORE PROFIT! The group that gets sacrificed in this is the players.
A Salary Cap does not make this situation fair. Centralized revenue sharing makes this far. The Players know this. The Owners are just hoping you don’t find out about it.
Sources: Dodgers Nation
Photo: AP Photo/David J. Phillip
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