Major League Baseball’s revenue sharing system, which has been heavily criticized recently, is finally forcing smaller market teams to spend money.
MLB has a unique revenue sharing system where all teams contribute a percentage of their local revenue and then share it with lower spender teams and the other big market teams.
The reason why they chose this type of method is because it’s supposed to help maintain a competitive balance.
But that hasn’t been the case in the last couple of years as organizations have found loopholes in this system.
Teams such as the Los Angeles Dodgers are big spenders, boasting a top five payroll over the past decade.
The Dodgers have been on a spending spree the past two years, most notably dropping $700 million two seasons ago on Shohei Ohtani. The A’s, who have always been at the bottom in spending, have their payroll increasing and just recently handed out a franchise record contract out to starting pitcher Luis Severino.
The Athletics 2015 payroll was $86 million, which ranked 27th of the 30 MLB teams. Last season, the A’s were dead last with their $47 million payroll.
The next lowest payroll was the Pittsburgh Pirates with $72 million. That’s almost a $30 million difference between the two bottom teams.
The A’s recently moved to Sacramento while their new stadium is being built in Las Vegas, and baseball fans are thinking that they are finally spending money just because they didn’t like their former home in Oakland.
Sadly, that is not the truth.
The MLB Players Association raised the salary floor which was originally $100 million, it is now $115 million. The Players Association wasn’t strict at first when it was introduced in February 2022. Teams weren’t following the rule, but now they’re getting much more strict this season and forcing teams to spend on players’ salaries.
That’s probably the real reason why teams like the A’s are spending money on players. They’re trying to avoid grievance from the Players Association.
If they spend more than $105 million this year, the A’s will receive $70 million from revenue sharing. They also signed more players to avoid this grievance.
This shows how unfair owners and general managers can be just to avoid an extra penalty.
Major League Baseball needs to create a revenue sharing system that is more balanced and penalizes teams for spending too much or not enough to skew the competitive landscape.