How To Fix Baseball - Part 2 - Salary Floor and Salary Cap And Other Things To Make Teams More Competitive

 Given the Dodgers repeat, the big off-season discussion is about how baseball needs a salary cap to keep the rich teams from buying up all the great free agents which, in theory, would give more teams the chance to compete for the best free agents by leveling the playing field, so to speak.  There is also discussion about how baseball needs a salary floor to make the cheap owners spend money to make their teams more competitive instead of just banking profits.

Here are the facts as I know them:

(1) The salary cap is going to be non-negotiable.  This is a key point that everybody needs to accept.  That horse has left the barn and it ain't coming back.  Once you have accepted that then the only choice is to continue to do what has been done previously: penalize teams for overspending and make the cheaper teams spend more money.

(2) The salary floor is something that needs to be considered.  The advantage of a salary floor is that it makes owners spend more money on payroll.  The disadvantage of a salary floor is that there are two main ways teams can reach that floor: sign free agents and extend their own players.  While the latter is a great way to raise team salaries and spur organic growth and competitiveness, the former will not end do ANYTHING for competitiveness.  Spending more money on free agents won't make teams more competitive for top or mid-tier free agents.  Instead, it will simply create a bidding war to drive up the price of those free agents who will still, likely, go to the richest teams.  The only thing a salary floor will do for free agency is make mediocre players richer as teams overpay lower free agents to make it above the floor.  In turn, this will fill roster spots with veterans making it much more difficutl for teams to play their own prospects or protect prospects on their 40 man rosters.

So, what is the solution regarding a salary floor?  Looking at team payrolls over the past few years there are always a few teams that lag way behind the rest in team payroll.  There is also another group that sits a cut above the low group but still well below the median team payroll.  I think a salary floor is necessary.  However, the floor should be low enough that we spur organic growth and not just make mediocre free agents richer.   My suggestion is the following:

(1) For the 2027 season, set a salary floor at $110 million.  Using 2025 team payrolls, that would pump close to $150 million into MLB payroll pool in 2027 compared to 2025.  That is more than enough to make teams who aren't spending money actually spend it but not enough money to make mediocre players rich by overpaying them.  

(2) Raise the salary floor by $5 million each year the next CBA is in effect.  This seems like a small increase each year but remember that the floor is designed to keep teams from shedding payrolls and banking profits, not to make mediocre players richer.  This small increase, combined with the salary floor, will give enough money for teams to have to keep their own players instead of selling at the deadline and the small increases each year will spur them to selectively pick players in their organization they want to extend, increasing organic growth compared to overspending on free agents.

A salary floor will not be enough to bring competitive balance quickly, but it will help.  Other measures that we will talk about in future posts, some of which exist and will need to be amplified and some of which are new, will be designed to further penalize the megaspending teams for their large payrolls and force the low spending teams to use their resources to improve the talent pool within their own organizations.