Major League Baseball owners are constantly looking for ways to limit costs. One of the reasons for the lockout before the 2022 season was MLB’s attempt to reduce player salaries. Eventually players were able to make modest gains in the luxury tax levels and get a bonus pool created for pre-arb players, but MLB’s attempt for a salary cap failed. (Rest assured, owners are going to try this again next time.)
Now, as reported by Evan Drellich in The Athletic, baseball owners are proposing limits on spending in other areas:
Major League Baseball and high-ranking club officials have discussed limiting how much teams can spend in areas other than player salaries, such as technology, player development, scouting and health, multiple people briefed on such discussions told The Athletic.
Different pockets of management have talked about the potential cost controls, whether it be owners speaking to one another, or in similar conversations between club higher-ups.
This is a bad idea on its face, but wait, it gets worse:
Just before Opening Day, commissioner Rob Manfred told a story about an owner who was puzzled by how large his analytics staff had grown.
“I heard (the idea of limits) discussed at the ownership level,” said a different club official this week. “I don’t know where it originated. It’s about competitive balance. … I’ve been in the game 20 years. The number of people we have in our clubhouse working with the players has tripled, quadrupled in size.”
This is the sort of thing that’s done by private equity investors in businesses other than baseball — attempts to reduce spending on just about everything in an attempt to increase profits. While there’s certainly nothing wrong with MLB teams making money, over the last decade or so that seems to be the modus operandi of many teams, putting profit over winning. If you’re a baseball owner, what’s the point of being there if you don’t want to win?
Beyond spending limits on players — which owners have to some extent with the luxury tax, which often acts as a de facto salary cap, since some teams just won’t go over it — limiting spending on technology or scouting is self-defeating. First, the spending in these areas is a drop in the bucket compared to player payroll. Second, if you don’t have this information, whether it’s analytics or reports from scouts, how are you going to put together the best possible ways to defeat your competitors on the field?
Drellich makes this rather ominous sounding note:
If MLB does eventually try to restrict employee spending in some capacity, the league almost certainly would be leveraging the benefit of the sport’s antitrust exemption. The 30 teams likely would be collectively deciding not to compete with each other, in some way, in their hiring practices.
That would create some risk for the league. Leveraging the exemption in a new way could bring new legal challenges to the exemption, or increased scrutiny from Congress.
In fact, legislation is being introduced (again) to address the anti-trust exemption, though this is related to the proposed Oakland Athletics move to Las Vegas, not spending restrictions:
Baseball is going down a dangerous road if they try to restrict non-player spending. It will limit the abilities of teams to put together competitive squads and in the end, make baseball worse.
Try to enjoy the games the next three and a half years, because between this and RSN money drying up, after 2026 we’re going to have another lockout and it’s likely going to be worse than the last one.