In the wake of the Major League Baseball’s leaked financial documents, Patrick Rishe of Forbes.com is the latest to call for the institution of minimum payrolls, often referred to as a “salary floor,” as a way to force teams to reinvest money received from revenue sharing…

Imposing league minimum team payrolls would ensure that money received through MLB’s general fund is re-invested into the major league product in a very direct way…The revenue sharing system in MLB was instituted to create a greater degree of competitive balance. Low payroll teams with persistently poor on-field performance that have the means circa their shared revenues to add $10-20M dollars in payroll – but don’t – are doing the system, and their fan bases, a major disservice.

First of all, Major League Baseball already has a salary floor of $10 million (25 player roster, $400K minimum salary per player).

Beyond that, what if MLB and the player’s union agreed to raise the salary floor? The theory sounds great. And for the first couple of seasons, it might actually work. But eventually, it will cause a problem bigger than the one it is attempting to fix.

In short, raising the salary floor will only serve to Read the rest of this entry »