Why revenue sharing and the luxury tax aren’t doing what they are supposed to.

You can get dizzy trying to figure out the various formulas for revenue sharing and the luxury tax, but some things are givens. There will always be some teams willing to spend because the objective is to win.

There will also be some teams not willing to spend and find comfort in using their small market status to free load off the big spenders because they are still making money. Pittsburgh and Kansas City have been notorious for using their revenue sharing income not to reinvest in players but to pay their electric bill.

I’m tired of hearing about small market – which should really read small revenue market teams – not fielding competitive teams because of the market they play in. It is inexcusable for a team such as the Pirates to have 20 straight losing seasons. How can the Orioles have 14 losing years playing in a gem of a ballpark like Camden Yards? Seems incomprehensible.

How Bud Selig can allow this is beyond reason. Also crazy is penalizing teams that go over the limit to take away draft choices. It stands to reason that a team having fewer draft picks will compensate with more spending in trying to build.

I’ve never been for revenue sharing because it promotes free loading, but the system is not likely to go away. If they are insistent on such a system, the receiving teams should be required to spend a designated percentage on player salaries. And, while we’re at it, there should be a minimum amount a team MUST spend on payroll.


3 thoughts on “Why revenue sharing and the luxury tax aren’t doing what they are supposed to.

  1. You seem to be operating under the misconception that professional sports is about winning championships.

    It’s not, for the most part. It’s about making money. Some owners think they can make the most money by winning championships. Others believe it’s most advantageous to spend just enough to have a shot at making the playoffs every year. And some believe that their best bet is to keep their spending low.

    Bud Selig allows this because he works for the owners, and the current system works out fairly well for them despite the occasional grumbling. The Players Association lets it go because their salaries keep going up.

  2. The system seems to work out pretty good to me. none of the teams with the 9 highest payrolls made it past the first round of the playoffs. Tampa bay got in with a 43m payroll. The new policy will try to keep the draft under contral which I totally agree with. A Player who has never played a professional game doesnt need to get paid more than a professional who has paid his dues.

  3. I agree that if you are going to have a payroll ceiling with a tax you need to have a floor. I do not understand the taking away players bit. It seems to be that a tax above a limit works fine.

    I agree with Paul(1) above that owners are in it to make money. However, the owners who put out a crappy product hurts others. When they come to town why do the fans want to go to the stadium and spend money to watch a lousy team?

    Same with the TV revenues. The networks will pay less for a crappy product.