Earlier this week, Dubner wondered what kinds of changes might make Major League Baseball more interesting to the modern T.V. viewer.
A number of you suggested instituting salary caps. This chart comparing team performance with total player salaries over the 2008 season, by data visualization guru Ben Fry, does seem to suggest a link between higher pay and sluggish performance.
But does it?
Check out Fry’s charts for the 2005, 2006, and 2007 seasons as well.
and 
. You can also watch it on 
Hey can you guys take a look at the ethanol versus food issue that seems to be getting legs.
There is a crises apparently happening in the commodities market for grains, especially rice and corn.
I suspect rampant speculation in the commodities market bankrolled by the profits in the oil industry is contributing to 1) high gas prices at the pump and 2) shortages in corn and rice.
There appears to be an accepted common wisdom that ethanol is now discredited because it competes with food. Which is bad.
My problem with this is it appears to me that the US domestic corn production has increased tremendously in the last 10 to 15 years to provide high fructose corn syrup for the soft drink industry to flavor softdrinks, because the US domestic sugar industry is being protected from foreign sugar. It just seems with all these factors that the reality is the US could support increased usage of ethanol in gasoline, without making people starve. Have you looked into these issues from an economic point of view and a debunking of “conventional wisdom” I appoligize if you have already commeted elsewhere.
Salary, shmalery…the games (and season) still take too long.
The problem for the majority of the bottom half of the salary divide teams is that after a month or two of the season their fans know they have no chance to make the playoffs and even a victory over a rival or contender is usually meaningless.
In the NFL, NCAA hoops and football, late season games can be meaningful even for non-contending teams.
rice is a main ingredient in beer;
beer prices go higher;
people get mad;
stop driving to beer store;
fuel supply rise;
price drops…
maybe
Interesting chart. I’d like to see it again in October when it matters. Ask any Red Sox fan what a good record in April does for you.
Winning percentage’s biggest factor team talent. Highly skilled players demand higher pay so winning percentage can be seen as a function of player salary. The exception to this is young talent which is has high risk on return. Teams Like Oakland, Tampa bay and Florida have found success in employing young talent.
Since the salary cap would likely be above the level many small market teams are willing to pay it would allow big market teams to pay less while the small market teams to pay the same, the most talented players would loose and the big market owners would win.
My solution to the problem is for MLB to make take over the television contracts and make it more like the NFL. Teams like the The Yankees, The Red Sox and the Braves have had a huge advantage with revenue generated by also owning YES NESN and TBS.
I dunno. Business decisions aside it just seems silly to me that one guy on Yankees makes more than a whole organization.
But I’m not a baseball fan either.
I’d like see similar comparisons for other sports.
Considering the very large sample size in baseball games and how easy it is to overpay for pitching it isn’t surprising that many teams perform poorly with relatively high payrolls. However the payroll alone doesn’t show true costs because it doesn’t include bonuses to amateur players or the scouting and player development staff. Arizona for instance consistently pays over slot bonuses to draftees, as do an assortment of large and small payroll teams.
Fundamentally though baseball’s revenues aren’t dependent on TV revenue, unlike the NFL, and this difference explains why there isn’t a salary cap, and a salary cap wouldn’t improve the game. The NFL needs a salary cap because they need teams to have a very large variability in wins for teams over the course of a few years to ensure a national audience where fans across the country feel like they have a chance in no more than a couple years. Baseball on the other hand finds it’s revenues overwhelmingly from the ballparks in the form of ticket sales, in park sponsorships, corporate boxes, and concessions. Because of this combined with the fact that there is a pretty long turn around time for bad teams to become good mean that ownerships need payroll rises in order to signal to fans a commitment to improving the team in order to get fans to return to the ballpark. If they were already at the limit, the Giants or White Sox for instance very well might be, and bad, ownership would not be able to signal to fans that the team was improving. Further a salary cap would result in cost shifting for large market teams to find other places to put money, something that happened in the NFL with paying for coaches.
Maybe we need a salary cap in the biofuels market.
Baseball with no salary cap last year saw a 0.186 difference in winning percentage between the best and worst teams (162 games). Football with a salary cap saw a 0.938 difference (16 games-granted a bit of an aberration with a team going 16-0 but it’s usually about 0.600 difference). In the salary capped NBA the difference was 0.549 (82 games).
My point is that for any individual game the underdog is much more likely to win in baseball. It doesn’t seem a salary cap would reduce that margin. Perhaps it would make different teams year to year being at the top and bottom but as pointed out in yesterday’s thread, a lot of different MLB teams have made the playoffs or World Series in very recent memory.
I’m happy with baseball the way it is. If I had to see one change to the salary structure though, I’d create a salary floor. The Yankees have outspent everyone and it hasn’t done much for them lately, but I’d like to see teams like Florida and Pittsburgh do more than just sit around and cash revenue sharing checks.