- Seidman, C., Salisbury, J., & NBC Sports Philadelphia Staff. (2020, January 9). A refresher on MLB’s luxury tax in relation to 2020 Phillies.
Background: This article from NBC Sports Philadelphia highlights the penalties for exceeding the luxury tax. The penalties, which begin as a 20% fine on all overages, become increasingly harsh if a team is over the luxury tax threshold for consecutive seasons. Surtaxes are appended when teams surpass specific amounts over the luxury tax threshold, and organizations that are more than $40 million over cause their top draft pick to be lowered by 10 spots. This content informed me of all possible outcomes for teams that do not comply with the luxury tax “boundaries”.
How I Used It: This article was essential to my definition argument because it clearly defined the harmful consequences for teams that decided to go over the luxury tax. In using this source, I provided the reader with information that they could compare/contrast to the hard salary cap, and in doing so they could form their own opinion. By providing the reader with a bank of knowledge about the luxury tax, it enlightened them as to why it is often much less of a deterrent to lavish spending then the hard salary cap.
2. Axisa, M. (2018, December 15). Only Red Sox, Nationals owe luxury tax in 2018 as MLB teams combine for smallest bill in 15 years.
Background: This article explained that big market teams such as the Dodgers and Yankees had been over MLB’s luxury tax for an extraordinary amount of time. The article states that the Yankees were over the tax from 2003-2017, while the Dodgers had exceeded the tax from the 2013-2017 seasons. The author also noted that in 2018, there were only two teams that were going to pay the penalties of the luxury tax, and their combined tax penalties were the lowest since 2003.
How I Used It: This article did not have any helpful information or support for the hard cap directly. However, it did happen to provide me with evidence that could be used in my argument because the author explained that the Yankees had paid the luxury tax for 14 straight seasons. This is a major issue considering small market teams could not even dream of paying the tax for a few years, let alone 14! Also, I made sure to expose the luxury tax in my essay by using that stat…clearly the luxury tax was not harsh/strict enough on teams that could afford to go over.
Background: In this essay, the author used formulas and conducted studies to draw conclusions about revenue sharing in Major League Baseball. The author concluded that throughout the history of Major League Baseball, league officials have repeatedly failed to create a successful luxury tax system that ensures competitive balance. The league created unintended incentives that were abused by teams in the 2002 revenue sharing system, then alleviated those issues and incentives in the CBA four years later. But that change resulted in imbalance that was just as poor as the original agreement. The results, as well as the author’s flawed solutions, guided me away from the hypothesis that altered revenue sharing agreements could fix Major League Baseball’s competitive balance issue.
How I Used It: This article provided me with substantial evidence that revenue sharing is not an effective way to achieve parity in Major League Baseball, so I gathered up the author’s conclusions and included them in my rebuttal argument. At first, I believed revenue sharing was an incredibly valid, and possibly even better, solution than the hard salary cap, but I was wrong. I assumed that my audience may have shared the same thoughts, so I quoted the author word-for-word when he explained how and why revenue sharing has had little-to-no impact on competitive balance in professional baseball.
4. Vrooman, J. (1995). A General Theory of Professional Sports Leagues. Southern Economic Journal, 61(4), 971-990. doi:10.2307/1060735
Background: This journal used a formula that involves revenue growth, population in the home market, and winning percentage to calculate market advantage in the NFL, NBA, and in Major League Baseball. The study revealed that the market revenue advantage impacted competitive balance least in the NFL and most in MLB. Each result fell in line with traditional theories about each league’s competitive balance, and the source was very useful due to its charts and explanations for several other factors that may/may not affect competitive balance in each respective sport.
How I Used It: This journal contained invaluable research that aided me in my efforts to persuade my audience that the hard salary cap would be beneficial to use in MLB. I included statistics from the journal that were easy to comprehend, all while being incredibly valuable and valid. Specifically, I explained how the NFL achieved elite parity because of the hard cap, whereas MLB has struggled with parity under the luxury tax since 2002. I followed that claim with Vrooman’s evidence, citing that the large market revenue advantage is 2x greater in Major League Baseball than in the NFL.
5. Juliano, W. Looking Under the Hood of MLB’s Revenue Sharing Plan. (2020, March 7).
Background: This article discussed the many steps that go into the calculation of revenue shares in Major League Baseball, and it even provided a chart that displayed 2018 versus 2019 revenue sharing estimates and comparisons. The article also described how many teams were circumnavigating the terms set by the CBA, as well as abusing the system, in order to gain an advantage. The article stated that teams illegally tank because the revenue sharing agreement benefits tanking teams tremendously.
How I Used It: This article was a blessing to come across, and I used in my rebuttal argument because it exposed the flaws of revenue sharing. In my essay, I used this concrete historical evidence to demonstrate and prove why revenue sharing agreements are counterproductive in Major League Baseball. The revenue sharing agreements encourage tanking, which is what harms competitive balance in MLB. Then, I came full circle and explained how the hard salary tax is not counterproductive like revenue sharing is, for the hard salary cap creates competitive balance and encourages small markets to spend.
6. Charlton, Monica. (2018, July 12). A Brief History of the NFL Salary Cap.
Background: This article reviewed the history of the hard salary cap in the NFL, ranging from its purpose, to the penalties if a team exceeds it, to the ways guaranteed contracts and bonuses correlate with it. The article’s primary focus was to give examples of penalties that teams have been charged with in the past.
How I Used It: I used the contents of this source to define what a hard salary cap is, as well as to provide the reader with details that they could use to compare to the luxury tax. Since the hard cap is not self-explanatory, I included all penalties for exceeding the cap in order to highlight the true “hardness” and strictness of the cap. Understanding the difference in fear that a hard cap and the luxury tax instill in teams/leagues is imperative to the entire basis of my research essay.
7. B-R Bullpen. (2016). Retrieved April 14, 2020.
Background: This piece from the Baseball Reference database explained the concept behind revenue sharing. It also provided details about how the current CBA agreement has developed over the years, dating back to its origin–1994 MLB strike. The work stated that in 2020, 48% of local revenue is shared equally among all 30 teams, yet baseball is still behind the NFL and soccer when it comes to revenue sharing.
How I Used It: The information regarding MLB’s current rate of revenue sharing, as well as its history, was valuable to my rebuttal simply because they are straightforward statistics that are easy to understand, and they support my argument. In my essay, I explained that the current revenue sharing rate is 48%, and that it has steadily increased since 1994. I then used that information, combined with my other source that concludes revenue sharing hurts parity, to explain why the hard cap is so much more effective than changing the revenue sharing agreement. In addition, using the historical data about the different revenue sharing CBA agreements, I concluded that as revenue sharing percentages have grown over time, but the rate of tanking has increased, so there is not a single percentage that will help MLB improve competitive balance.
8. Brown, M. (2019, October 4). From Terrible Teams To Rising Costs: Why MLB Attendance Is Down Over 7% Since 2015.
Background: This article explained how MLB attendance has been significantly decreasing for years due to tanking teams and rising prices within the stadium. The article also discussed MLB’s excuses for the decreasing attendance in 2018, with a lot of the blame surrounding poor weather. But attendance and TV ratings have been a consistent issue in baseball for years.
How I Used It: I used this article to my advantage by pulling direct quotes/stats from the article while maintaining integrity by not altering the author’s overall beliefs and message about the subject. Since the author provided the reader with the atrocious decrease in attendance numbers of MLB games since 2015, I used that information to convey why achieving parity in baseball is important now more than ever. Teams tank, and both fanbases involved in the game do not want to watch a tanking team get dismantled by a postseason contender.
9. MLB Rankings. (n.d.). Retrieved April 14, 2020.
Background: This source provides all the current Major League Baseball contracts based on average annual value (AAV) for the 2020 season. It also has data from 2011, and projections up to 2025 for players that have already received long term contracts (even though they are subject to change).
How I Used It: I used this source in my definition essay to give my audience a perspective of how easy it could be to completely abuse the current luxury tax system and its weak penalties. I noted Mike Trout’s current AAV, then created a hypothetical situation to reveal that a team that is already at the luxury tax threshold could sign the best player in baseball. Under the current luxury tax penalties, they would only have to pay $8 million in tax. Of course, this is only my definition essay. However, it helps further define the extent of the luxury tax penalties, and it shows the luxury tax’s weaknesses without explicitly arguing for a hard salary cap.
10. White, M.H., Sheldon, K.M. The contract year syndrome in the NBA and MLB: A classic undermining pattern. Motiv Emot 38, 196–205 (2014). https://doi.org/10.1007/s11031-013-9389-7
Background: This source analyzed the difference in performance for players in their free agent/contract years (from 2006-2012). The research revealed that in the following 5 major statistical categories in professional baseball: Batting Average, Slugging Percentage, On Base Percentage, Home Runs, and Runs Batted In, players performed significantly worse in their post-contract year than in their contract year. In addition, the post-contract year season was, on average, the worst of all three seasons. The post-contract year statistics that experienced the most substantial differences between both the contract year AND the pre-contract year were Batting Average, On Base Percentage, and Slugging Percentage.
How I Used It: I used the research and content of this source to improve my knowledge about tanking in MLB. Although I did not end up directly referencing this source in my essay, it helped me further understand the reasons why MLB teams tank, and it made me aware of how MLB could prevent it. Due to player performance decreases after signing with teams via free agency, teams are incentivized to tank because they can receive higher draft slots and get better value for their players. Players are not eligible to become free agents until the conclusion of their 6th major league season. Young players are cheaper and more controllable than free agents, and this research reveals that players perform worse after signing contracts in free agency. In my definition essay, I made it evident why tanking is so prevalent in MLB. Major League Baseball could encourage less teams to tank if they employed a hard salary cap because they would not have to worry about being outbid by big market teams. Therefore, they would not feel the need to tank and acquire cheap talent through the draft process.