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Do Pro-Labor Policies Destroy Competitive Balance?


Before I had a chance to respond to Yglesias’ repeating of highly flawed received wisdom about competitive balance and baseball, he finds some relevant data. To this, I will add that 1)as demonstrated in the Historical Abstract, baseball was more competitively balanced in the 90s than the 80s, and the 80s than the 70s, despite the decision to actually pay the players market rates, and 2)big-market teams dominated in NBA to a far greater extent than they did in baseball in the same time period. Actually, Matt doesn’t seem to think the data rebuts his thesis, but to me it’s definitive; at 11%, you’re talking about a very modest difference that can clearly be overcome by good management, and given that ressentiment against big markets is good for the sport, that status quo would be better than pure parity.

It’s actually quite amazing the extent to which progressives who know better repeat the argument–which is pure management propaganda–that if players aren’t exploited only a few teams will be competitive. Consider this from Malcolm Gladwell, speaking in June 2002:

If there is a work stoppage this fall — as I hope there is — and if the players come to their senses and we get a cap and revenue sharing, I’ll come back to the game. In the meantime I’ll spend my time watching the NBA where, I’d like to point out, a team from a minor, regional metropolitan area just gave a team from Los Angeles a run for its money. Imagine that!

Of course, what’s ludicrous about this is that in MLB 2001 a team from New York was given all it could handle by small-market Oakland (you remember, when Derek Jeter made the Greatest Play Ever (TM) by flipping the ball toward the catcher, and then willing Giambi not to slide, and then willing the umpire to blow the call, in the key game that prevented the invincible Yankees from getting swept.) This is the perfect example of the tautological nature of these arguments; somehow, the Lakers winning yet again can be spun as a tribute to the highly competitive NBA, but if the Yankees barely beat a better team in the postseason this proves nobody can possibly compete with them (although–and I make no judgment about whether this is better–it’s obvious that far fewer teams can plausibly win an NBA championship at the beginning of the year than a World Series. The less “teamy” nature of baseball is far outweighed by the fact that a star player has vastly greater impact on an NBA team than an MLB one.) Gladwell’s rare moment of idiocy does give us a hint, however, about why this nonsense became strongly entrenched: the big Yankee run of the late 90s and early 00s. The thing is, though, that while the ’98 Yankees were an authentically great team, the 2000/1 Yankees weren’t. The 2001 A’s were a better team than the Yankees, their narrow loss in a 5-game series notwithstanding, and of course that year the Mariners won 116 games. Now that their luck in post-season has run out, it’s becoming harder to believe that the Yankees are unbeatable, and in fact in most of these years they weren’t (and, of course, their ’98 team was not primarily built around expensive free agents in any case.)

The other strange thing is that Gladwell buys into the myth that a salary cap is necessary for competitive balance, but this doesn’t make any sense. What you need to put teams on an even footing is revenue sharing; a salary cap just means the owners keep more money and the players less. Owners have tried to make this about protecting “small markets,” but it’s about greed, period. On this note, however, I can’t conclude with pro-baseball arrogance, because my punchline is that, for all intents and purposes, baseball has a salary cap. The Yankees are, I believe, the only team that is willing to spend over the luxury tax line. And, of course, this is basically the same as the NBA’s soft cap, which teams can easily exceed. The Evil Big Market Knicks, of course, outspend every other team by $25M , and have used that advantage to crush their opposition like a flabby grape. Right? Er…but, anyway, if I thought that capping player salaries helped competitive balance, then baseball and the NBA should be similarly affected, and especially given that there are 4 post-season slots in MLB the Yankees’ outlier status doesn’t mean that other teams can’t compete. The Yankees’ high payroll simply doesn’t prevent other teams from competing any more than the Knicks’ does. And salary caps are about putting more money in the owners’ pockets, not competitive balance.

…Ian Gray has more.

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