From the MLB to the NBA: Major League Salary Problems

The Dallas Mavericks have the highest payroll in the NBA at $105 million.  The lowest payroll belongs to the Charlotte Bobcats at about $53 million.  That is a $52 million dollar difference. 

In the NFL, the New York Giants have the highest sitting at $125 million.  The lowest belongs to the Buffalo Bills at $67 million.  Here there is a $58 million dollar difference.

Now the fun begins.

In Major League Baseball, the highest payroll belongs to the Yankees at $209 million.  The lowest belongs to the Marlins who put up a fight at $22 million.  That is a $187 million dollar difference.

In fact, Alex Rodriguez's 2008 salary is $28 million.  Let me put that in other terms.   Alex Rodriguez's 2008 salary is $6 million dollars more than the payroll of the entire Florida Marlins team. 

Baseball has tried to keep the competitiveness level the same through revenue sharing, luxury taxes, etc., but this doesn't seem to work.  The eight playoff teams last year averaged a $107 million payroll.  The non-playoff teams averaged $67 million.

The only restriction set forth by Major League Baseball is the luxury tax, which taxes teams if they spend over a set payroll amount.  This is commonly referred to as a soft cap.

But this doesn't stop teams like the Yankees and Red Sox who traditionally pay this luxury tax year after year.  What MLB and MLBPA don't realize is that if teams can afford paying one player $28 million, they can afford paying the small luxury tax with no problem. 

Clearly, the luxury tax does not fill its purpose to maintain competitive balance and avoid overspending.  What is balanced about one player making more than an entire team?

So what, if anything, can Major League Baseball do to fix this problem?  Obviously, there is nothing that MLB can do that will either get by the owners or get by the MLBPA.  They won't even be talking about a new collective bargaining agreement for a couple years.

But something needs to be done, or we'll soon see $300 million payrolls and that $28 million salary will be going to someone like Jayson Werth—nothing against Jason.

Let's take a quick look at the salary program in the NBA.

Fans became displeased because their favorite player left for another team during free agency.  This led the league to institute the "Larry Bird" provision of the salary cap. 

It gives the player's current team an advantage over other teams in free agent negotiations, thus increasing the chances that the player will stay with his current team. 

Now there is also a soft salary cap.  There is no penalty for being over the cap.  However teams over the limit are prohibited from signing free agents for more than the league minimum.

The NBA also has a luxury tax system which is triggered if average team payroll exceeds a certain number higher than the cap.

In this case, the teams with payrolls exceeding a certain threshold have to pay a tax to the league.  This tax money is then divided and distributed amongst the teams with lower payrolls—not to a "league advancement fund" like what we see in the MLB.

All of this talk won't do a thing because it won't come up in conversation until 2011 when the collective bargaining agreement ends.  Until then, we'll just have to live with the $30 million player salaries and, in some cases, $30 million payrolls as well.