How to Fix MLB's Big Payroll Problem

Bob Nutting
Pirates owner Bob Nutting in dugout | Jared Wickerham/Getty Images

On Monday, the Pittsburgh Pirates traded one of their greatest remaining assets in Starling Marte to shed $10 million from an already-embarrassing payroll. The deal netted Pittsburgh two top-10 prospects, and overall makes sense for a team in the midst of a rebuild.

However, it doesn't address a larger problem around baseball: payroll disparity.

The bottom five payrolls in all of baseball -- belonging to the Marlins, Pirates, Rays, Royals and Indians -- just barely combine for a total higher than that of the richest organization in the sport, the New York Yankees, who will spend an enormous $243 million on their roster next season.

How to Solve MLB's Payroll Disparity

What four of those five teams have in common is that they stink, or are preparing to stink. In any capitalistic model, spending money equals more talent, and Major League Baseball is finding this out the hard way, with the same handfull of teams competing for the World Series season over season. Sure, there are some outliers, but their championship windows often don't stay open nearly as long as they should.

MLB's system benefits the likes of Pirates owner Bob Nutting, who routinely opts out of spending money for on-field talent, instead raking in cash from revenue sharing each and every offseason. The less Nutting and others like him spend on their teams, the more year-over-year earnings they can report for themselves and shareholders. In 2018, for example, every team received $118 million, per baseball-reference. That number likely increased in 2019, and will do the same in 2020 as the value for television contracts goes up.

The simple solution for MLB would be to implement a salary floor. However, considering the number of votes required to pass such a measure is...immeasurable, this is unlikely to occur. However, this is a hypothetical, so let's say Rob Manfred convinces the owners to implement a $75 million salary floor.

This doesn't sound like much to fans of teams such as the Yankees, Red Sox, Astros and Cubs, but this would require those bottom five teams we previously discussed to up the ante significantly, improving their rosters in the process. The penalty for violating such a rule would be similar to the luxury tax, with owners being forced to pay penalties, with draft compensation up for grabs should they continue to fail to meet the salary floor.

It's farfetched, but we live in an ideal world.