Thursday, December 2, 2021

Joe Sheehan Newsletter, December 2, 2021 -- "Competitive Balance"

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The Joe Sheehan Newsletter
Vol. 13, No. 81
September 2, 2021

A couple of weeks back, the owners’ first offer to the players for a new Collective Bargaining Agreement leaked. I wrote about it here and, because I just can’t help myself, posted about it on Twitter. What I saw a lot that day and in the days that followed was this:

“@respectthehorn: #mlb simply needs a salary cap and a salary floor and the two of them can’t have a large gap.”

I’m not picking on that guy. I just landed on that reply when digging through my replies for an example. He’s hardly alone. In the same way that anything you say about baseball on Twitter now generates a complaint about blackouts, anything you say about baseball economics generates a demand for a payroll cap. 

The vox populi case for a payroll cap is that it levels the playing field and allows for better competitive balance. This argument is startlingly resistant to evidence, as the competitive balance of the league without a payroll cap has been far better in this century than in the leagues with them. For example, in the regular season the best NBA and NFL teams have higher winning percentages than the best MLB teams. In the regular season, the worst NBA and NFL teams have lower winning percentages than the worst MLB teams. An MLB team playing .700 or .300 ball is an anomaly. A quarter of NFL and NBA teams do it every year. 

What’s another measure of competitive balance? Well, one way or another every team eventually makes the playoffs. Every team in the three leagues has reached the postseason this century. If we just consider the 2010s, which allows us to ignore the pandemic season, that’s not much more helpful. Three MLB teams (Mariners, White Sox, Marlins), two NFL teams (Browns, Jets), and one NBA team (Kings) missed the playoffs for the entire last decade. Keep in mind that the NFL and NBA allow more teams, on both a raw and a percentage basis, into their playoffs than MLB does.

(The NBA, we should note, does so pointlessly, inflating their perceived competitive balance and watering down their playoffs with teams that have no chance to win a title. The last four teams in the NBA playoffs, the #7 and #8 seeds, have not won a series in their last 32 attempts. The last win from those seeds happened in 2012, when the #1 seed Bulls lost star Derrick Rose to a knee injury while winning the first game of their first-round series. The #8 seed 76ers would win that series in six games. In the last eight full seasons, the #7 and #8 seeds are 0-32 in series and 41-144 (.222) in games. #16 seeds in the NCAA tournament have advanced more often! A quarter of the NBA playoff field is just wasting everyone’s time.)

The NBA, famously, is dominated by dynasties. A mere ten of its 30 teams have won championships in this century. In that same time, 12 of 32 NFL teams have won the Super Bowl. In baseball, 14 teams have lifted the Commissioner’s Trophy. Back up a level, and you find that 14 of 30 NBA teams have played in The Finals, 19 of 32 NFL teams have played in the Super Bowl, and 19 of 30 MLB teams have played in the World Series.

That’s a lot of numbers, so let’s summarize the data. MLB has the most in-season competitive balance as measured by the spread in winning percentages. There’s no difference in the three leagues as measured by teams making the playoffs, even though the other two leagues allow a higher number and percentage of teams into their playoffs. More baseball teams have won championships than NBA or NFL teams, and MLB is tied with the NFL for the number of teams that got to play in the final round -- again, despite having the highest threshold for getting into the playoffs.

Contrary to the populi’s vox, baseball has the best competitive balance of the three major sports. It’s not particularly close. The idea that baseball has bad competitive balance is something that Bud Selig lied into the air supply 25 years ago, and has been regurgitated ever since as fact. I used to say, and it still holds up, “‘competitive balance’ is code for ‘the players make too much money’.” 

Let’s play with numbers some more. Here are the standings with 32 days to go in the season.

Rays        8-5  .615  --
Yankees     8-5  .615  --
Red Sox     7-6  .538   1
Blue Jays   7-6  .538   1
Orioles     4-9  .308   4

White Sox   8-5  .615  --
Indians     7-6  .538   1
Tigers      6-7  .462   2
Royals      6-7  .462   2
Twins*      6-7  .462   2

Astros      8-5  .615  --
Athletics   7-6  .538   1
Mariners    7-6  .538   1
Angels      6-7  .462   2
Rangers     5-8  .385   3

That’s wild. With about 20% of the season left to play, only the Orioles have been eliminated from playoff contention. Fourteen of the 15 AL teams have a shot at a playoff berth, and in fact a division title. Is the NL also this exciting?

Braves      7-6  .538  --
Phillies    7-6  .538  --
Mets        6-7  .462   1
Nationals   5-8  .385   2
Marlins     5-8  .385   2

Brewers     8-5  .615  --
Reds        7-6  .538   1
Cardinals   7-6  .538   1
Cubs        6-7  .462   2
Pirates     4-9  .308   4

Dodgers     9-4  .692  --
Giants      9-4  .692  --
Padres      7-6  .538   2
Rockies     6-7  .462   3
D’backs     4-9  .308   5

There are a few more teams playing out the string in the senior circuit, but you still have incredible three-team races in the East and Central, plus the two best teams in baseball battling out West. With just a few weeks left, 12 of these 15 teams have a shot at winning their division!

The above standings, as should be clear, are what you get if you scale the baseball season down to the size of a football season. (Don’t get too caught up in the rounding.) NFL teams play 16 (now 17) games over 17 (now 18) weeks, and you simply can’t get significant separation in that time. Few teams play out the string in the NFL the way they do in MLB, because the “string” isn’t long enough. In MLB, a team that has played .440 baseball through most of the schedule is long done. An NFL team that has done the same might control its own destiny if the tiebreakers fall just right.

The perception of competitive balance in the NFL is almost entirely due to a short schedule that doesn’t allow for falling off the pace the way MLB teams can. If Rob Manfred declares that baseball teams will play just 16 games over 17 weeks, MLB standings would look like NFL standings, and 25 teams would be sweating their playoff chances in July. The difference in the perceived competitive balance between the two leagues isn’t a payroll cap. It’s math. 

Truthfully, though, I think the answer is even simpler. Tautological, really. Having a payroll cap, in the minds of most sports fans, means you have competitive balance, full stop. Never mind that in the three major U.S. leagues, the presence of a payroll cap is inversely correlated with the league’s level of competitive balance. The leagues and the team owners, with oceans of help from co-opted media terrible at this stuff, have convinced fans that agreeing to only spend so much on payrolls, to only try this much, has created competitive balance.

Payroll caps do one thing: Limit competition for the available talent. The relationship between having a payroll cap and having competitive balance is nonexistent.

As we go into this CBA cycle this winter, MLB won’t propose a true payroll cap, but they’ll propose similar structures, trying to limit the competition among teams for talent. That’s the primary goal, as it has been since about 15 minutes after Peter Seitz handed down his ruling. From the re-entry draft to the free-agent compensation schemes to collusion to the luxury tax, baseball owners have been trying to roll back the clock to a time when they didn’t have to compete with each other for talent.

They’ll say their proposals are designed to enhance competitive balance. Don’t believe them. Baseball has excellent competitive balance on the field. What it needs is a freer market for talent off of it.