Credit: Ravi

WSPN’s reporters Ravi Kapadia and Owen Harrington express their views on if the MLB should implement a salary cap.

Major League Baseball (MLB) small market teams feel as though their team has no chance in competing with big-budget teams because of the lack of a salary cap in the MLB. No matter how well baseball players develop within their team’s system, or how hard the team works, they can never compete against the wealthier teams because of a major disparity in both resources and facilities.

The Los Angeles Dodgers had massive spending last off-season, acquiring superstars Shoei Ohtani and Yoshinobu Yamamoto among others. In fact, the Dodgers spent over one billion dollars before the season in free agency.

As of now, the Dodgers have outspent the other 29 teams in Major League Baseball combined. To add to their already profuse spending, they’ve already signed former free agent Blake Snell to a five-year, 182 million dollar deal in 2024, and the offseason has just started. Because of the Dodger’s unparalleled spending, they won the World Series in 2024 fairly handily over the New York Yankees, another big market team. This is a problem because it has made for an uneven playing field, and an even more uneven future, which should prompt the MLB to implement a salary cap.

A salary cap is a league wide rule that limits teams to paying their players a maximum salary. Many American sports leagues have already implemented this, like the National Football League (NFL), the National Basketball Association (NBA) and the National Hockey League (NHL). The salary cap prevents teams from acquiring an unfair amount of star players and keeps the playing field even.

Instead of having a salary cap, the MLB implemented the “luxury tax.” The luxury tax, also known as the “Competitive Balance Tax,” helps balance the amount of money a team can spend on their roster. The Competitive Balance tax was first incorporated from 1997 to 2000, but was removed for three years until 2003, when it was added back into the MLB, and it still remains today. When a team exceeds the amount of money they can spend on their players, they get taxed a certain percentage of money that they spent above the allowed limit. A team is taxed 20% the first year they overspend, 30% the year after and 50% if they exceed the limit three consecutive years or more.

While the luxury tax encourages teams to spend less, the salary cap is much more effective because it does not let teams outspend each other by a significant margin. For instance, despite the competitive balance tax, there was still a large difference in spending between the highest spending team, the New York Mets, who spent approximately $314 million, and the lowest spending team, the Oakland Athletics, who spent approximately $62 million in player salary last season. With a salary cap, the gap in spending would be prevented and the difference in payroll between teams would be significantly less. Only eight teams had to pay a luxury tax last season with some teams only being taxed about 0.4% of their payroll. The salary cap would apply to all 30 teams, and it would limit teams from being overly dominant, something that the luxury tax fails to do.

In order to keep its fans, the MLB should help out small market teams and their fans by implementing a salary limit. Fans of teams with less wealthy owners will become disengaged and not care about baseball if it is dominated by big market teams with rich owners.

The MLB should implement a salary cap in order to keep small market teams in contention, keep their fans and prevent dominant superteams from ruining competition throughout the league.