As we reflect on the first week of nothingness that amounts to a typical seven days in the MLB off-season of late, the biggest news story of the week in British sport makes for an interesting contrast.
Saracens, the English rugby union club, have been handed down a significant penalty for repeated breaches of the Premiership’s payroll cap.
The team has been given a 35-point deduction, putting them bottom of the league table on -26 points three games into the season (a plight that would almost certainly lead to relegation for any other club, but Saracens probably will just escape that fate) and a £5.36m fine ($6.86m).
For context, the standard payroll cap in the league is £7m, so the fine is equivalent to 75% of their payroll. In some ways, a bit like the Boston Red Sox being fined $160m. The penalties are being contested, yet experts do not fancy Saracens’ chances of overturning the ruling.
The full story can be found in this BBC Sport article, but in essence the team has been accused of flouting the salary cap by setting up investment opportunities (businesses etc) with players. This has allowed them to keep hold of their best players by signing them to contracts of a reduced rate and topping up their remuneration in a way that, they argued, did not constitute a salary and therefore was exempt from the payroll cap calculations.
In short, the team’s owner Nigel Wray has been found to have been using crafty methods to pay players more money.
This is not an accusation you are ever likely to see being levelled at an owner of an MLB team.
MLB is effectively a combination of 30 ownership groups, all of whom having a strong vested interest in keeping their costs down. The quiet and contentious free agency market of recent off-seasons is seen as a direct consequence of teams choosing not to spend money on players beyond the very top-tier of the free agency class.
In this context, the comments from Atlanta Braves’ General Manager Alex Anthopoulos this week about how he has checked in with the other teams “to get a sense of what the other clubs are going to look to do in free agency, who might be available in trades” were hopelessly naive.
Anthopoulos likely was not inadvertently revealing a great conspiracy, instead referring to the obvious intelligence gathering clubs will do to get a sense of what opportunities might present themselves; however it was no surprise that the MLB Players’ Association jumped on the comments and cried “club coordination”.
Relations between MLB and the MLBPA are at their lowest point for many years and the ability of the two sides to come to agreement when the current Collective Bargaining Agreement expires after the 2021 season is in real question.
We are regularly told by MLB Front Offices, and others doing their bidding, that the current climate is a by-product of every team being smarter, using advanced analytics to make rational decisions around contracts and transactions. There is some truth to this, indeed a team could quickly point to the two biggest free agent deals of last year’s off-season (Bryce Harper’s 13 year, $330m contract with the Philadelphia Phillies and Manny Machado’s 10 year, $300m contract with the San Diego Padres) and that neither team even finished with a winning record in the first year of those ‘franchise-changing’ acquisitions.
However, a rational market shouldn’t over-power the fundamental objective of the teams as sporting entities and businesses: competition.
For example, it may be rational and smart to have a general stance that signing a free agent pitcher to a contract longer than four years is a risky proposition, yet good MLB players are a finite commodity. It only takes one team to think ‘we’d prefer not to go above four years, but that player could really make a difference to us’ to push the bidding to five years and beyond. That is the very definition of a properly functioning free agent market.
The fundamental issue in MLB currently is that every year a significant number of teams are ducking out of acquiring good talent, whether justified as ‘retooling’ or them being in full tanking mode. The result is that most free agents are not presented with a ‘normal’ pool of teams competing against each other to acquire talent, and they are therefore not benefiting from the inflationary effect that this is supposed to have.
It’s not that teams are being smarter with their offers, it’s that the market isn’t forcing them to stretch the slightest bit beyond the lower bounds of a potentially acceptable offer for fear of a competitor being willing to offer more. In a marketplace that is restricted to a 30 team (employer) monopoly, that is a huge problem. For the players, at least.
A balance is always necessary in a sport so that there is hope for all teams and that the league is not simply determined by a small group of big-pocketed clubs. In the case of Saracens rugby club, it appears that they have broken the rules agreed to by all and rightly deserve a punishment for it.
Yet in the context of the current MLB landscape, it shouldn’t be overlooked that at heart the Saracens’ owner was motivated by wanting to put together a great team (which he has done) and financially compensating those players accordingly. He was motivated by a desire to build as competitive a team as he was able and to bring success on the field.
How many of the 30 MLB ownership groups could say the same?
