Salary Cap in Major League Baseball

For my second blog, I wanted to touch on the subject of how a salary cap is needed in Major League Baseball. Fans of the game want baseball to be a competitive sport on and off the ball field, however, as residual values increase of ball players, making player salaries at an all time high, I see Major League Baseball consisting of a monopoly. Now who would this monopoly be none other than the New York Yankees. In 2008, the Yankees spent $209 million on player’s salaries, not including the salary tax implemented by Major League Baseball. When you look at the numbers, three players on the Yankees: Alex Rodriguez, Jason Giambi, and Derek Jeter, made more money in 2008 than the Florida Marlins spent on their entire roster. Now if Major League Baseball can implement a price floor in player salaries at $390,000 per season, why can’t they implement a price ceiling, in terms of a salary cap, on team salaries? An argument could be made that this would decrease the marginal costs of baseball players, allowing team to receive a higher marginal benefit due to their marginal cost. However, a salary cap could allow the thirty-one other Major League Baseball teams to supply comparable salaries to this individual, allowing for a greater demand and making teams more competitive on and off the field. Two recent offseason acquisitions by the New York Yankees to demonstrate their market power would be: Mark Teixeira’s 8 years, $180 million contract and C.C. Sabathia’s 7 years, $161 million contract. These are two ridiculous contracts in such a deprived economic time. Now, I am not jealous and give these two individuals and agents applause for receiving a contract as above, however, this just demonstrates how Major League Baseball is becoming a monopoly in terms of player salaries. Good thing that it only buys ball plays and not championships or even playoff spots.