Does Baseball Need a Salary Cap?

matt maldoContributor IJuly 27, 2009

Perhaps no two words in baseball generate as much controversy and emotion as salary cap.Depending on who you ask the salary cap would either save the game, destroy the players union,provide some hope for those smaller market teams, corrupt the free market, or create a problem that would turn every deadline into a battle of wits between dueling GM's.The concept of having a salary cap sounds simple enough.

Every team whether it be the Yankees, or the Nationals are given an annual salary budget, and no team is allowed to exceed it.But as experienced in other leagues salary caps come with many exceptions like hard caps and soft caps, franchise-player exemptions, and luxury taxes.each tweak to the system runs headlong into the economics of unintended problems.But before we determine how to fix baseball, you have to decide what about baseball needs to be fixed.

Taxes and caps have been suggested to cure problems like payroll inflation, high ticket prices, and competitive inbalance.Economists like to point that if you want less of something, you need to put a tax on it, players salaries being no exception.reduce the ability of the richest teams to bid up the price of players and salaries are gonna fall.How this ends up playing out is dependent on the tax in place.A salary cap which should be called a payroll cap,is the simplest to envision.

Once teams have reached their limit they are forbidden to spend more.This helps to reduce salaries in two ways, one teams over the cap are taken out of bidding for free agents, giving available players fewer options and reducing the bidding pressure.Plus teams just below the cap will resist on blowing their budget on a single player.In theory it sounds good because it will give every team whether they have a small market or a huge market an equal chance at winning.It sounds good but will it happen maybe but probably not for a while.