Tampa Bay Devil Rays Payroll = $37,275,00
New York Yankees Payroll = $205, 939,000
Combined Salary of Derek Jeter + Mike Mussina = $38,000,000
Luxury Tax Redistribution Share Received by Devil Rays = 10% (about $20,000,000)
1. NBA and NFL both have salary caps, the most parity, and a very rapid turnaround ability from year to year (partially due to the lottery system in the NBA). The Collective Bargaining Agreement in 2006 for the NFL may be the end of the Salary Cap, however, minimal salaries and the draft system will help ensure that parity continues.
2. In the age of free-agency, team rebuilding and growth projects must take place fairly rapidly. However, unfortunately, it has been demonstrated that profitibality does not necessarily rely on winning percentage. This is the root of the problem in Tampa.
3. Recently, an analysis in FORBES demonstrated that the DEVIL RAYS were one of the more profitable teams in MLB. As a matter of fact, there profit was about the same amount as their share of the luxury tax!
4. A business owner who does not have an idealistic love of baseball but invests heavilty in a baseball team must be motivated by profit. But since profit does not necessitate a winning record, a baseball owner also risks commiting a vague form of fraud to his customers.
5. Local baseball fans expect a competitive team that plays at the level of their organization.
6. Currently, an owner faces a conflict between fan obligation and profit. Therefore, baseball must do something to resolve this conflict
7. There are a number of possible solutions to the disparity in MLB including a salary cap, a minimum salary, or a requirement stipulating that all luxury tax dollars redistributed to a given team should go into direct team costs (e.g. player salary)
8. A salary cap is not likely to move past the player's union
9. The easiest solution and most legally feasible is for baseball to REQUIRE that the luxury tax redistribution be spent on direct operating costs and that a MINIMUM salary (based on the current average salary) be phased into MLB
BASIC POINT: REQUIREMENT THAT LUXURY TAX REDISTRIBUTION BE SPENT DIRECTLY ON OPERATING COSTS AND A MINIMUM SALARY!