The Decadence of a Tradition and the Rise of a Business

Once revered as Americas favorite past time, Major League Baseball has taken the back seat to the ever growing popular National Football League. Major League Baseball has seen a ten percent drop in attendance, while the National Football League enjoys attendance rates as high as 95 percent. The NFL has also seen about a ten percent increase in television ratings, while MLB's ratings continue to drop each year. The reason for such a schism between the two juggernauts is the concept of a salary cap, which the NFL has and MLB doesn't. The result is that goliath-like baseball teams continue to pulverize the league by signing big name free agents with no limit and small market teams suffer because of the lack of their generated revenue. On the other hand, NFL teams are basically equal at the start of each season because each team can only spend a certain amount of money, thus each team's fans think that their team has a chance of winning it all compared to the fans of small market baseball teams that think their team doesn't have a chance before the season even starts.

The NFL first implemented the concept of the salary cap in 1994 and it has continued to be one of the major factors why the league is where it is today. A salary cap is basically a set amount of money that each of the NFL's 31 teams is allowed to spend on player salaries for any given year,"(How Stuff Works 1). During the 2001 season the salary cap for each team was about 60 million dollars. However, this figure steadily continues to grow each year, because the cap for the 2004 season is estimated to be about 80 million. The cap is then distributed between the star players and the average players. The reason why we see so many big time veterans being released or "cut" from their teams is because the average players eventually want bigger salaries, thus the teams do not have enough money to pay the astronomical salaries that the superstars demand. However, a way to get around the salary cap is by implementing a signing bonus. A signing bonus works like this: "Signing bonuses don't count toward a team's cap for a given year. A player who receives a signing bonus gets more money for that year than his recorded "salary," leaving more room in the cap for the other players,"(How Stuff Works 1). The pro of signing bonuses are that teams can entice players by offering more money without having it count towards the salary cap. The con is that this money is guaranteed. Therefore a player who is awarded a bonus receives the money no matter what. Even if the player is plagued with injury the entire year or simply doesn't live up to the expectations, he still receives his money. Regardless of the signing bonus, the playing field is at an equal level every year. Because of the cap, teams that have had poor seasons in the past can sign a few big time free agents in the off season and can instantly become a contender for the title the following season. A free agent is a player who has the option of signing with any team he pleases when his contract expires. Thus teams can essentially "save" up cap room by maintaining a roster of average or mediocre players. Teams can go out and spend their money they have saved up over the years and attempt to lure a big name player to their team. Another reason teams are more even is that basically all 31 teams earn an equal share of profit generated from television revenue. Unlike MLB everyone has a chance to see their favorite team play at least three or four times a week on national television. The Major League Baseball regular season consists of 165 games compared to an NFL season of 16. Because of this, every football team has a chance of being shown on national or local television. On the other hand, small baseball teams are rarely shown on television unless they are up against a larger market team like the Yankees. Fans of these teams eventually lose interest and gradually empty seats replace full ones.

Like the NFL a free agent system is used within MLB but in contrast to its pig skin competitor a salary cap system is not used. The result is that the players actually end up having more freedom than the teams. This is true because the players have the right to play for whomever they want and the small market teams do not have the option to sign the superstars because they don't generate enough revenue. One example is the New York Yankees who just signed all star short stop Alex Rodriguez. The Yankees, who are the richest team in baseball, has to pay off A-Rod's salary of 180 million dollars that was left over from his previous team the Texas Rangers. Although this may seem like an extraordinary amount of money, the Yankees certainly have the revenue to do it. A deal like this would only be possible without a salary cap. "The difference between the MLB team with the highest payroll (New York Yankees) and the lowest payroll (Tampa Bay Devil Rays) is a startling $91,548,583,"(Reardon 1). Each year basically the same teams are in the hunt for the title because they have the money to afford players that will make them competitive. Rarely do we see small market teams win the World Series or even advance to the post season. It is because of this that small market teams fail to generate a lot of revenue from attendance because fans of these teams know their teams don't have a chance to win. And when teams do not win, they are not played a lot on television. Thus, these teams are not able to generate enough revenue from television. "The New York Yankees generate millions in revenue from their YES network. The television revenues of smaller market teams such as the Minnesota Twins, significantly pale in comparison to the exorbitant TV revenues that are generated by larger market teams,"(Reardon 1). When teams are not able to come up with the money generated from television or attendance, they are not able to upgrade to a newer and modern stadium that could bring in even more revenue. When you take away the option of spending money on big name players you take away wins, revenue, and most importantly fans. Without fans it is very difficult to run a team or a business. If your fans (customers) lose interest, the team (business) will eventually fail. "Professional baseball is on the wane. Salaries must come down or the interest of the public must be increased in some way. If one or the other does not happen, bankruptcy stares every team in the face,"(Zimbalist 47). In 1999 the idea of contraction was considered. Contraction is the elimination of one or more franchises which is exactly the opposite of expansion which the league has experienced more than contraction. The benefits of contraction would be that there would be more revenue for the rest of the existing teams. "However, some view the idea of contraction merely as a way to pressure state and local governments to finance the building of newer stadiums for the struggling teams,"( Simon 2 ). The Twins, one of the teams that were considered to be contracted, had two phenomenal seasons right after the concept of contraction was conceived. Six years later not a single team has been contracted. But one has to wonder how long it will be till this concept will be exercised, considering the ever growing gap between large and small market teams.

Whether generating more revenue than any other professional sport, or by simply selling out stadiums, the NFL has gradually established itself as the leader in sports. On the other hand, MLB has been on the decline for years and continues to alienate fans with the advent of each season. MLB has experienced two labor strikes in the last ten years because of collective bargaining conflicts, and it continues to hang over the league today. The NFL only had one in 1986, and will probably never have one again because of the salary cap. If MLB doesn't implement some sort of a salary cap within the next couple of years, the league will eventually become Americas past time of the past.