competitive balance in baseball

Moneyball, the book that was recently turned into a movie discussed competitive balance in baseball, a sport without a salary cap. Because there is no salary cap, there's nothing from stopping the rich teams from spending as much as they want, while the poor teams are left scrambling to find players others might not have wanted. In fact, this is exactly what happens with teams like the Yankees spending much more than poor teams like the Oakland Athletics. To start the 2012 season, the Yankees have the highest payroll at $197,962,289, while the Athletics are 2nd to last at $55,372,500.

With other sports like basketball, football, and hockey all using the salary cap to try and maintain competitive balance, many wonder why baseball doesn't implement a similar system. However, I don't think that the lack of a salary cap affects competitive balance much in baseball. This is mainly because predicting future success is so hard. Baseball used to only have one year contracts when the reserve clause  prevented players from entering free agency. This was because teams thought it was physically impossible to guarantee health and performance in the future. Why would I give you a contract for next year if you might have major arm surgery this year? This has clearly gone long, long away, but the concept is what keeps a balance in baseball. There are countless contracts that teams pay huge sums of money, and the players don't perform up to expectations. Poorer teams don't find themselves giving huge contracts that could cripple their franchise. So even though the Yankees might be paying A-Rod $30 million this year, that doesn't mean he's going to earn it. It just means the Yankees signed a contract that was way too big, predicting A-Rod to continue his incredible career, and that hasn't worked out for them.

Failure to predict the future is what is keeping baseball competitive. Poorer clubs are forced to give out smart contracts that won't cripple them. A-rod, Jeter, and Hiroki Kuroda, are making as much as every player on the Athletics, but these players won't perform at a much higher level. This is why baseball isn't in dire need of a salary cap.