What is the point of a monopoly?
Yanks, Red Sox, Angels to pay tax

The Associated Press released that story about this year's luxury tax. The Yankees, Red Sox, and Angels exceeded the player salary luxury tax of $120.5M in 2004. That tax threshold increases to $128M in 2005, and it looks certain the Yankees and Red Sox, and maybe Angels will blow through it again.

I don't see how this can be overlooked, (considering its an AP article) the AP suggests,

Many midlevel teams appear to be spending money on free agents this offseason, possibly because of the shift in economics created by increased revenue sharing. That could push the average salary higher next season.

I'll believe that when I see it.

Listen, the cry heard round baseball, initiated by the owners, and propagated by their media puppets, is about "competitive balance". It always has been about competitive balance and it always will be about competitive balance. That's what revenue sharing was supposed to help, and that's what the luxury tax was supposed to fix. There have been a number of free agents signed to large deals, but I don't see how that is different from any other season. And which midlevel teams is the article referring to?

I am, once again, confused. Who has actaully increased their payroll this offseason? I realize I am jumping the gun, with some free agents still to be signed, but it still needs to be said: revenue sharing and the luxury tax have not increased competitive balance.

But that's not to say these new measures haven't had an impact on the business of baseball, they certainly have. The revenues of "small" market teams has increased. Unfortunately, very few of those teams have re-invested this money, and instead the Yankees and their sidekicks are creating profit for the owners of mediocre franchises.

The AP article reveals a common misconception that I've heard quite a bit this offseason. It's true there have been some rather large contracts given out, and its true that some teams have been active in the free agent market. But lets look a little closer.

The most active teams this season, as in most offseasons, has been the high-payroll teams. The Red Sox, Yankees, Angels, Dodgers, Phillies, and Cubs. All teams above a $90M payroll, and all teams spending money. Check in Seattle and its ~$85M payroll right behind them.

The Braves, Cardinals, and Giants, three higher-payroll teams have maintained their current payrolls, and the Rangers have continued to slash payroll, trying their hardest to become a mid-payroll team.

So are any mid-payroll teams spending money? I don't see many. Have the Blue Jays, Royals, Twins, Marlins, Pirates, Reds, Rockies, Brewers, Devil Rays, Nationals, or Astros spent any more money this year?

I'm sure a lot of people would point to the Orioles, Tigers, Diamondbacks, or Mets. Not that the Mets (or the D-Backs) are mid-payroll teams, but despite some free agents signing, and an apparent payroll increase, all four teams will see their payrolls decrease (barring a major signing) in 2005. Payrolls for these four teams will decrease because some bad contracts they signed in the late 90's FINALLY come off the books. So don't look at these teams' signings as anything other than keeping payroll constant.

Which teams have actually increased salary?

Well, I'm sure the A's would suprise people, considering the rap they have for letting free agents walk, but they've now guarranteed a payroll increase in 2005, and it will be for the fourth consecutive year.

The White Sox have increased salary, but it comes on the heels of two straight years of decrease. Maybe they are the example the commissioners office should be using, but they are sadly short on company.

The only two good examples of (wisely) increased salary are the Indians and Padres, who have both begun to spend money as they prepare for the next step in two very well laid out rebuilding plans.

I get four. Four mid-payroll teams that have increased spending thus far. And two of those four teams play in large markets. Now things could change, but can anyone really imagine Carlos Beltran or Carlos Delgado anywhere but New York next season?

So there are four mid-payroll teams that have increased spending in 2005. What about the rest? Are they pocketing the cash from revenue sharing? Are they taking their share of the luxury tax and re-investing it in the minor leagues, as some have claimed.

One example familiar to many is the Brewers. Milwaukee has not only cut player salaries, but has also cut their total operating budget for three years running. So they've spent less despite increasing their total revenue for each of the three years, and Milwaukee is not alone. Where is all this money going?

If the goal of revenue sharing and a luxury tax has been to increase competitive balance, as the owners have claimed, then where is the evidence? Shouldn't we see some financial evidence to suggest that money has been re-invested to help lower income teams compete, neccessarily hurting higher income teams?

There has been no evidence to suggest this. In fact, the exact opposite has been true. Most of the teams investing money in their product are teams that already make the most money. The large majority of teams who benefit most from revenue sharing are either cutting or maintaining player salaries. Concurrently, the three teams paying the luxury tax (Yankees, Red Sox, and Angels) have continued to increase spending.

I know its a real dumb question, but am I missing something? Does nobody out there notice this? Does anyone have hope next year that any of the mid-level payroll teams other than A's, Twins, Padres, or Indians will have a chance at the playoffs next season? I don't. Where is the competitive balance?

Now to answer my own question: what is the point of a monopoly? Well, of course it's to make truckloads of cash. Baseball owners operate a monopoly, and they make truckloads of cash. Whenever you hear financial news about baseball teams, remember one thing. Anything said, done, or implied by the owners is with the single, solitary intention of making more money. There are very few owners in baseball who care about winning, so long as people show up to the ballpark. Its the way it is, and I'm not complaining. I just can't take the constant references to owners doing things in the "best interest of baseball".

"Competitive balance" is simply owner-speak for "hey its not fair George makes all the money."
Go ahead and email Curt to complain.  ¶ 1:01 AM