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Yankees Now Own Baseball: Salary Cap to Follow

With the wholly expected signing of Mark Teixeira to an eight year, $180 million deal today, the Yankees now own the four highest active major league contracts. This is only the third big free agent contract the Yanks have signed this off-season, in response to not making the playoffs this past year. The Bombers signed pitcher C. C. Sabathia to a seven year, $161 million deal and A.J. Burnett to five years for $82.5 million. That's three players for a combined $424 million. Granted, the Yanks move into the new $1.3 billion Yankee Stadium this spring, but that's a big number even for them.

Clearly, the luxury tax hasn't fazed the Steinbrenner boys anymore than it fazed their father. The Yankees have been over the cap every year that the tax has been levied and have been responsible for 90% of the money (a total of $148.5 million, counting this year) paid in as a result of the rule. This year, the Yankees owe $26.9 million, up from last year's $23.9 million and that was for a team which failed to make the playoffs. Despite that, the Yankees' payroll keeps expanding and the disparity between it and the rest of Major League Baseball keeps growing. As it is, only the Mets and the Red Sox can even pretend to keep pace, and even they have their limits.

Baseball is the only major sport without a salary cap and the results of this year's free agent market make the case for a cap more clearly than any argument concocted by any sports writer or any owner of a small market team ever could. Try these numbers on for size. Take the salaries of just the Yankees top four in A-Rod, Jeter, Sabathia and Teixeira and you get $91.9 million next year. That is higher than the entire payrolls of 17 teams in Major League Baseball. How in the world can than possibly be good for the game, even if through injuries, bad luck , mismanagement or bad play, the Yankees fail to perform. At the end of the day, success in the World Series is not usually the determining factor in fan attendance or support of a local team. Winning helps immensely, but that means contending for a division title or playoff spot.

If baseball doesn't take measures more concrete than the luxury tax currently in force, the small market teams will not be in a position to keep talent on their rosters once those players attain eligibility for free agency. The drumbeat is starting. Brewers owner, Mark Anastasio, is advocating a salary cap. He told Bloomberg: ?They are on a completely different economic playing field. I paid $220 million for my team; now they get three players for $420 million.
At some point it gets to be absurd when a team has a $200 million payroll.? He also said that the Brewers would not be raising their $81 million payroll next season due to the recession.

Full post as published by Sports Biz on December 23, 2008 (boomark / email).