The Marlins and Minimum Payrolls
Major League Baseball’s attempts to narrow the gap between franchises has resulted in an incentive system. While other leagues have salary caps and floors, Major League Baseball has instituted a system of luxury taxes (to bring down the highest payrolls) and revenue sharing (to bring up the lowest ones). As I noted in a piece for ESPN The Magazine this spring, the system has been pretty effective too, as we are currently experiencing an age of parity unlike any time in MLB history.
However, incentives don’t work in every situation. You can carrot-and-stick your way to success on a broad level while still having some individuals fall through the cracks. Overall, I think MLB’s financial system is mostly as effective at promoting competitive balance as a hard salary cap would be, but that doesn’t mean that the system doesn’t have some flaws. And, with the Ricky Nolasco trade, the Miami Marlins are shining a bright light on the system’s flaws once again.