Point-Counterpoint | Is money the root of Pirates’ evils?

Small market Major League Baseball teams like the Pittsburgh Pirates don’t need a salary cap in order to compete.

MLB already has a soft salary cap — which can be exceeded, unlike a hard cap — in place through the luxury tax system. MLB levels the “luxury tax” at teams that break the soft threshold by charging an additional 20% on the team’s overages. The tax rate increases if teams exceed the luxury tax in consecutive years. This means teams that consistently spend more than the allotted threshold will pay a fairly large sum of money, and also prevents large market teams from breaking the bank to create the best possible squad.

MLB also already has a revenue sharing system in place — another feature of salary cap systems and one that is frequently referenced as a reason why the league would benefit from a hard cap. 

MLB teams split the revenue they earn from selling the national broadcasting rights to networks such as ESPN, TBS and FOX. The new run of contracts, inked in 2020, run from 2022 to 2028 and are worth a total of $12.24 billion. That’s nearly $1.75 billion a year, which gets split evenly between 30 teams annually. This means roughly $58 million will be distributed to each team every season from television deals alone.

The Pirates’ payroll in 2021 was a little more than $54 million. So, hypothetically, if the Pirates kept a similar payroll next year, national TV rights would cover the costs entirely, and then some — leaving a sizable portion for owner Bob Nutting, a man worth $1.1 billion in 2020, to potentially pocket.

It’s not that Nutting and other small market owners don’t have the money to compete against large market teams. They’re choosing not to, and the owners are getting rich off fans who blindly support them with that defense.

Beyond the national TV deals, MLB also has a modified revenue sharing system in place for teams’ individual deals with local broadcasting syndicates. This system subjects 48% of the income from local deals for all MLB teams to revenue sharing, where MLB redistributes the wealth evenly among all 30 teams.

Small market teams like the Pirates make a king’s ransom from the large market teams through revenue sharing. In 2018, the most recent reported year, each of the 30 MLB teams received $118 million through this deal — money that owners of small market, non-competitive teams were able to pocket quietly while their fans begged for a salary cap system to “save” them from the tyrannical large markets.

Small market teams and owners like the Pirates and Nutting aren’t the beleaguered victims they are often made out to be. The revenue sharing from national and local television deals comes close to covering the entire luxury tax threshold each year on its own. They aren’t losing money, they’re making out like bandits and walking over their fans in the process.

The lack of a salary cap and their location in a small market isn’t the reason why the Pirates have been the worst team in the Major Leagues for much of the last 30 years. The Pirates haven’t succeeded during that time period because they’ve refused to spend money to improve the product on the field, despite having more than the means to do so.