Will a salary cap come to baseball because of these new billion dollar tv contracts?

In Major League Baseball, Uncategorized by dmick891 Comment

Over the last couple years the Angels, Rangers, Astros and Padres have each signed billion dollar contracts with a network. The Dodgers appear to be on the verge of signing the most lucrative contract of them all. It’s rumored to be worth between $6-7 BILLION over 25 years. For the mathematically challenged, that’s about $240-280 million per year.

We’ve already seen what this increase in revenue can do for the Dodgers as they traded for and signed all the available players. The Dodgers payroll will be the highest in MLB history, passing the 2008 Yankees (209 million). The Dodgers are looking at an opening day payroll north of $220 million and that’s not even one year of tv revenue.

The $240-280 million per year doesn’t include the annual payments teams get from MLBAM, FOX and ESPN either. They signed Zack Greinke and you know what? If he injures himself on the first pitch he throws in a Dodgers uniform it won’t matter one bit. Insurance would cover some of the loss, but even ignoring that they’re loss would only equal a little more than half a year in tv revenue. They’ve taken on $600 million in contracts since March. It will take the Dodgers 2+ years to earn that money back.

The Angels tv contract is the next highest and it pays them only $147 million per year. That we can say “only $147 million” is hilarious.

The Yankees earn $80 million right now in tv money and it increases to $300 million by 2042. Think about that for a moment. The Yankees are a huge disadvantage to the Dodgers when it comes to spending money. For the time being anyway.

Next is the Astros and Rangers who each get $80 million per year. Then you have the Red Sox at around $60 million. The Cubs are at about $50 million and my guess is after their contract with WGN expires in 2014 they’ll sign a short-term contract with CSN through the end of that contract (2017) at which point they’ll negotiate a billion dollar contract. Probably around $4-5 billion. It won’t be what the Dodgers got.

The Royals, Pirates, Marlins, Cardinals, Brewers, A’s and Braves earn less than $20 million per year.

Obviously all of these figures are going to increase, but some will increase a lot more than others. Take the difference between the Dodgers and Rangers and you’re talking as much as a $200 million per year difference. The difference between the Dodgers and the A’s is going to be even larger.

The difference between the haves and have nots will be greater than ever before.

I do not favor a salary cap, but I know Bud Selig has urged the teams to share more revenue and with the differences as large as they’re going to be in the near future, Selig and others will sense more urgency in getting it done.

I’ll be somewhat surprised if we don’t see a salary cap in baseball in the very near future. How funny would it be that when the Cubs hire one of the most competetent front offices in baseball they have just about every possible advantage taken from them? Their advantage in acquiring amateur talent is gone. Their one remaining advantage is the ability to spend more than most teams.

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