Could Baseball Borrow the Premier League’s Spending Incentive?

“The strategy the Marlins have adopted is tried and true in baseball. I’m not saying it’s without pain… But it was a process that ultimately produced a winner [at times, including Houston this season], in terms of smaller markets’ ability to win.”

–Commissioner Rob Manfred on the Dan LeBatard show, Dec. 20

 
Rebuilding, of course, has long been a part of baseball.

Before the Astros and Cubs parlayed dramatic rebuilds into World Series titles, the Marlins conducted fire sales of their own amid championships in 1997 and 2003. Young, cheap, talented labor has been prized since the origins of the professional game.

However, it is the depth of baseball’s current rebuilds that has begun to create more concern recently, notably among the league’s 120 unsigned free agents. It seems like something is different is occurring, that organizations are thinking more extreme, more like an NBA team when retooling.

If the Cubs and Astros did not inspire these more extreme retooling efforts, the Cubs’ and Astros’ success has nevertheless allowed clubs to follow the “tanking” model with greater conviction.

While FanGraphs has, on occasion, been criticized for writing from the team perspective, for declaring a “winner” and “loser” in a deals based on the sort of value it might provide a club, we have written from the player’s perspective quite a bit recently.

In December, this author suggested players should fight for a payroll floor. Craig Edwards and I each offered free advice that could drive more money to players — younger players, in particular — by eliminating the arbitration system.

This ice-cold offseason can be explained by a number of factors. You have probably heard these explanations: teams better understand aging curves and have devalued free agents; large-market clubs are motivated to stay under a more punitive tax with next year’s historic class looming; more teams are thinking and valuing players similarly — with more science and less emotion. Others have speculated whether collusion is at work.

The MLBPA was recently curious to learn whether the Pirates and Marlins were using their revenue-sharing dollars properly, a point which Whitney McIntosh explored in depth for SB Nation.

That leads me back to Manfred’s comments at the top of this post, comments which hint at another key problem: incentive.

The commissioner of baseball has endorsed purposeful down periods. Is tanking rational from the club perspective? Can it result in winning? Yes and yes. We’ve seen that. But competitive balance also ought to be a concern for MLB, and a landscape increasingly populated either by Haves or Have Nots is a troubling one. Not every tanking story will be a successful one. The Astros and Cubs were successful for reasons beyond the top-five overall draft picks they accumulated.

What could change the incentive for more clubs to compete (and spend)?

There is nothing forcing Bob Nutting to add payroll in Pittsburgh. Even at the Pirates’ recent peak, from 2013 to -15, the club never broke into the top 20 in spending. There is no payroll floor making the Marlins pause at completely dismantling their roster.

So that brings me to a recent community blog contribution and a clever idea from UK-based fan and researcher, Billy Dennis. The post was inspired by and borrows from an English Premier League practice. (Read the entire piece!) In the EPL, as Dennis explains, teams collectively share television/media-rights fees. Those dollars, however, are distributed not equally, but rather as “prize dollars,” with the best team receiving the greatest share of revenue and so on down the list. While ticket sales and TV ratings and ad dollars are tied to winning in baseball, dollars that are shared from national media contracts and MLB Advanced Media are not tied to on-field performance.

The following chart shows how those TV dollars were allocated last season in the EPL, according to the Telegraph.

Such a system creates greater incentive to spend and compete — assuming the spending is relatively efficient. Of course, it can also widen the gulf between the Haves and Have Nots. Interestingly, that point is probably of greater concern in the EPL itself, where clubs like Manchester City and Manchester United not only carry payrolls nearly 10 times the size of their weakest competitor, but where they can also leverage their revenue streams into the outright purchase of talented players (a practice that is atypical in American sports). The constraints on player acquisition in baseball (draft, international free agency) don’t allow for such stratification. MLB might actually be more well suited to the prize-money system than the EPL itself.

The MLB and EPL are different creatures in other ways, obviously. I cannot imagine MLB sharing the majority of its media-generated revenue in such a way, for example. But perhaps a portion of revenue could be distributed in a similar manner to the EPL. Perhaps that could foster more spending. Maybe the revenue-sharing system should be rethought. Perhaps there ought to be something in place to promote future spending.

While tanking can work, while it’s a rational process to follow, when too many teams are losing on purpose to collect premium draft picks and spending-pool dollars, when too many teams follow that roadmap, that can become a problem.

What baseball — and the MLBPA — might need are further incentives. Dennis’s idea is a creative one.