The purpose of a luxury tax is to prevent teams in "major markets" with high incomes from signing the most talented players, ergo destroying the competitive balance in the sport. The money that is then gained from the luxury tax is divided up among the teams in the "smaller markets", to allow them to accrue more revenue and maintain a competitive level with the rest of the league.
Let me be the first to say how truly ridiculous that is. The Yankees are considered "bad for baseball" by so many purists because they overspend on player contracts to get individuals to sign with New York. Just this past off-season, they doled out over $420 million to sign Mark Teixeira, CC Sabathia and A.J. Burnett. And according to every sports columnist, the Yankees are "buying a championship." Right, the Yankees are signing players they feel they need in order to compete, or dare I say, maintain a competitive level with the rest of the league and they are bad for baseball?
Over the past 6 years, the Yankees have had to pay the highest amount for the luxury tax to the "small market teams" so they can remain competitive with those big bad boys of the large media markets (Yankees, Mets, Red Sox, Dodgers, etc). To the un-informed reader, that would seem fair. You see teams like the Minnesota Twins, Washington Nationals, Florida marlins, etc and you see them with mediocre talent, low payrolls and you curse the name of George Steinbrenner for making it so impossible for those teams to compete!
Well, newsflash genius, those teams can compete, they just choose not to. I'm sick of the Yankees having to pay the luxury tax year in and year out. I think it's ridiculous that the REd Sox have had to pay the luxury tax twice, or that the Tigers have had to pay it as well. I'm sick of all this "small market" hooplah that I hear every single day. So the Yankees have the highest payroll, we have the highest player contracts, blah, blah, blah. With the way these media outlets spout off in a barrage of anti-Yankee rhetoric, you would think that George Steinbrenner is the richest owner in sports and just throws out large denominations of cash to lure those players as he sports a greedy smile on his face.
Too bad that isn't true. Not even close to true in fact.
George Steinbrenner is worth $1.3 billion, which is a pretty substantial amount. He's worth more money than 2/3 of the other owners in Major League Baseball. now, I'm not saying he's poor by any stretch of the imagination, since obviously he has a large amount of cash in his name. But, were you area of the fact that there are currently 9 other owners, or ownership groups worth more (and in some cases considerably more) than the New York Yankees owner? I bet the mainstream media didn't really clue you, or anyone else into that. Listed below are the names of the owner's currently worth more than George Steinbrenner and the teams they are currently in charge of:
Chicago Cubs: Thomas S. Rickets - $1.3 Billion
Texas Rangers: Thomas O. Hicks - $1.4 Billion
Detroit Tigers: Mike Illitch - $1.6 Billion
Houston Astros: Drayton McLane, Jr. - $1.6 Billion
Atlanta Braves: Liberty Media - $2.3 Billion
Cleveland Indians: Larry Dolan - $3.3 Billion
Washington Nationals: Theodore N. Lerner - $3.5 Billion
Minnesota Twins: Carl Pohlad - $3.6 Billion
Seattle Mariners: Nintendo Corporation - $257.4 Billion (yes, you read that right, Nintendo owns the Mariners and the entire corporation is worth nearly a quarter of a trillion dollars)
Notice any teams that really jump out at you? Possible perennial payroll bottom dwellers and mid-market teams such as the Washington Nationals and Minnesota Twins? Seems rather peculiar that two of the least spending teams in Major League Baseball boast the wealthiest owners, doesn't it? But wait, I thought they were just poor lowly teams that can't afford to compete with the endless finances that teams like the Yankees offer other players. I mean after all, the Twins payroll this season is only $65.3 million and the Nationals is no better at $60.3 million. How can these victims of the Yankees tyranny honestly compete with a monetary juggernaut like George Steinbrenner? (in case you haven't realized it, I'm being sarcastic and I'm laying it on pretty thick)
Bet you didn't know that, huh? Weren't aware that the wealthiest owners were in charge of some of the lowest spending teams? Of course not, because nobody wants you to know that. The media to portray the Yankees and teams like them in such a negative light that it makes the story seem interesting. Would you read a story (kinda like this one, so I guess you would) that speaks about the other owner's who refuse to spend money? Like you honestly know who Theodore Lerner or Carl Pohlad are? Well, I do, because I've researched this topic endlessly because it aggravates me so much. Their refusal to spend money has forced Major League Baseball into this conundrum (I had to slip it in there at some point) of having a luxury tax. They are rewarding ineptitude and that's utterly mind boggling.
Major League Baseball implemented the luxury tax to punish teams like the New York Yankees for spending so much money on signing players. They initiated this as a way to "keep the game competitive and every team on equal footing." In reality, the sport needs more owners like George Steinbrenner. He's good for baseball. The Steinbrenner's are one of the only ownership groups in Major League Baseball willing to do whatever it takes to win. They are the only owners who put the fans first and worry about the product on the field, rather than the bottom line. It's purely ludicrous that the Yankees or any other team that exceeds the luxury tax threshold has to give millions of dollars to those "small market" teams, when their owners are worth nearly twice as much!
In effect you are penalizing any owner's passion and desire to win at any cost. We should be applauding owners like George Steinbrenner, Frank McCourt, Fred Wilpon and John Henry. They are more than willing to take the necessary steps they see fit to put the best team possible on the field. They are willing to spend money to put the best product on the field for the fans.
I propose that the luxury tax should work in reverse order. Set a precedent for how much money each team should spend each season. If they don't spend the minimum amount, they should be penalized and have to pay the other teams in baseball a percentage. Now that's the way you maintain a competitive balance. Force the teams that refuse to spend money to open up their wallets and at least pretend they're attempting to be competitive.
I'm sick and tired of hearing about the Yankees are "buying championships" simply because we have an owner who is willing to set aside business ventures and puts the team and wining first and foremost. If we have to cut one more check to teams like the Nationals or Twins, I may be sick to my stomach. Somebody write your Congressman! Implore them to force these cheapskate owners to at least pretend like they give a crap about their team or the fans.
I'm talking directly to you Theodore Lerner. And to you (the family of) Carl Pohlad. You boast two of the lowest payrolls in all of sports, yet you're both worth over $3.5 Billion respectively. Tell me where's the justice in that? They receive millions of dollars per year from the Yankees as a part of revenue sharing, so their teams can "maintain a competitive level."
Hey, tell you what, if you spent the same percentage of your net worth on your team's payroll, we'd be begging you to share some money for our poor small market Yankees. George Steinbrenner spends nearly 17% of his net worth on the Yankees payroll alone. Do you know how much the Nationals payroll would be if Theodore Lerner spent the same 17% of his net worth on his team? Their payroll would be a whopping $595 million.
If that doesn't prove a point, I don't know what will. George Steinbrenner and owner's cut from the same mold as him are not bad for baseball. Teams like the New York Yankees don't hurt the competitive balance in the sport. You want to know what is bad for the sport? Take a look at all those teams on the receiving end of the revenue sharing. It's people like Theodore Lerner that are hurting the sport and compromising the competitive balance in baseball.
Until next time...
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