Does the MLB Need a Salary Cap?

Less than 48 hours ago, the Los Angeles Dodgers signed Blake Snell to a 5-year, 182-million-dollar contract. Since then, fans have been discussing on social media whether or not MLB should install a salary cap. After seeing many posts asking this question, I’ve decided to express my opinion. First, I will explain why the MLB doesn’t already have a salary cap. Then, I’ll discuss how the Dodgers’ recent moves relate to said explanation. Based on those considerations I will determine my opinion and explain why.

Why Doesn’t the MLB Have a Salary Cap?:

While the NBA, NFL, and NHL all have salary caps, the MLB is the lone major league that allows their teams to pour as much money as they’d like into their rosters. That’s because unlike in the other sports, in baseball, buying the best players isn’t the most effective way to build a roster. There are two better ways to build a roster. These two ways are In-House Development and Strategic Assembly. 

In my opinion, In-House Development is the best way to build an MLB roster. In other sports, building around rookies is incredibly risky because first-round draft picks are so “boom or bust”. This is much less of a concern in baseball because the teams developed the rookies in their own systems. As much as you can scout and interview a college player, you will never be able to know everything about him and how he functions daily. However, when a player develops in your own organization, you know everything about him, how he breathes, how he walks, how he talks, how he sleeps, and plenty more. Building these franchise players to the club’s exact specifications is far more effective than bringing in talent. For reference, let’s look at the two most recent dynasties, the 2010-2014 Giants and the 2017-2023 Astros. The San Francisco dynasty was built around 7 key players, Buster Posey, Pablo Sandoval, Madison Bumgarner, Tim Lincecum, Brandon Crawford, Brandon Belt, and Matt Cain. All seven players were developed by the Giants and made their major league debut with San Francisco. The Houston dynasty was also built around 7 players, Jose Altuve, Alex Bregman, Kyle Tucker, Yordan Alvarez, Justin Verlander, Carlos Correa, and George Springer. Six out of the seven were developed by the Astros and made their major league debuts with Houston. Over the past 20 years, we’ve only seen 2 teams make the World Series 3 or more times in 5 years. Both teams, the Astros and the Giants developed their core from their own system. Hence, it’s safe to say that the recipe for elongated success is In-House Development.

While Strategic Assembly doesn’t create dynasties like In-House Development, it’s the most cost-efficient method. The Strategic Assembly method involves using statistics and metrics to identify players whose strengths and weaknesses play well off each other’s. This method was first used by Billy Beane and the 2002 Oakland Athletics. Beane and his chief scout Paul DePodesta used stats to identify undervalued players. Despite having the 25th-highest payroll in the MLB, the 2002 Athletics finished the regular season tied for the best record in baseball. While they ultimately failed to win the World Series, they did do enough to have a movie based on their success (Moneyball). A more recent example is the 2018-2023 Tampa Bay Rays. Tampa Bay uses the lineup diversity strategy to set their hitters up for success. Based on metrics, Tampa Bay will statically place batters in their lineup, whose strengths and weaknesses are the opposite of the strengths and weaknesses of the hitters before and after them. This way, if the opponent tries to switch pitchers to play to a hitter’s weakness, they’ll be playing to the following hitter’s strengths. Using the lineup diversity strategy, Tampa Bay finished 10 games above “.500” in 8 consecutive seasons, despite being in the bottom 27% in payroll every year. On the other hand, in this past season, half of the teams in the top 73% in payroll failed to finish the season 10 games above “.500”. In accordance, we can safely say that Strategic Assembly is by far the most cost-efficient roster-building method.

The Dodgers’ Recent Moves:

In the 2023 offseason, the Dodgers went out and spent an insane amount of money on free agents. In total, in said offseason, Los Angeles handed out over 1.2 billion dollars worth of contracts. I quite honestly found this funny. In the 2023 season, the 3 teams with the highest payrolls, the Yankees, Mets, and Padres, all missed the playoffs. That led me to the understanding that spending a large amount of money doesn’t necessarily make your team good. Hence, I found it funny that the Dodgers were spending such a wild amount of money as if it was guaranteed that it would lead to results. Nonetheless, the Dodgers went on to win the World Series the very next year. However, I still believe that throwing around money is the 3rd-best roster-building method. While one method might be more effective or cost-efficient than the other, the quality of execution also matters. The money that is spent, must be spent wisely. The teams that used the other two methods in 2024 executed their methods poorly. A team that does a good job doing the In-House Development method will always beat a team that threw money at their issues. However, if we take, for example, the 2024 Philadelphia Phillies, who simply threw money at their issues and built their team with very little strategy. In 2024, the Philadelphia Phillies had a higher payroll than the Dodgers. The Phillies were great in the first half of the season but then won only half of their final 80 games and lost their first playoff series. 

Should the MLB Install a Salary Cap?:

In conclusion, I don’t believe that the amount of money a baseball team spends on its roster has too much correlation with the team’s success. Spending more money than another team doesn’t necessarily give you the better team. For a fact, the Dodgers beat teams with higher payrolls in both the NLCS and the World Series. While having a high payroll does increase the likelihood of success, it does anything but guarantee it. In accordance, I don’t think a salary cap is necessary in the MLB. 

On the other hand, I would love to see a salary floor. As previously mentioned, we’ve seen teams use great strategy to create low-cost, good teams. If they were to use as much strategy and some more money, it would turn these teams into contenders and highlight the marvel that is the world of numbers in baseball. In addition, it would encourage teams who use the In-House Development strategies to sign the guys whom they develop to long-term deals. Even as a Yankees fan, it always hurts my heart to see a player who grew into himself with a team and fanbase, abandon ship to chase money and leave for a rich team. Playing for the same team for a long time allows a city to rally around the player and create a legacy, the way Jeter’s legacy grew in his 20 years in New York. Imagine if Lindor stayed in Cleveland or if Soto stayed in Washington, they’d become city legends.