I absolutely hate stories like this one, entitled: A Super Problem?: NFL without a salary Cap? In case you are interested in yet one more guy who knows little about sports once again exaggerating the financial inequalities in the sports industry, check out Barry Wilner’s garbage here:
In fairness to Wilner, most of his article discusses the impending labor fight between the players and the owners. But when you start out with nonsense like this, it’s hard to take the author seriously: “….next season will have no cap. That means teams such as the Redskins and Patriots will be able to far outspend clubs such as Jacksonville [Jaguars] and Buffalo [Bills] for free agents, while the Jaguars and Bills might try to pinch pennies to stay in business. And if no deal can be reached next season, that uncapped, maybe less competitive year will be followed by no NFL at all in 2011.”
First of all, the NFL is a 6.5 billion dollar annual business with by far the most lucrative broadcast and merchandise deals of any of the major sports. And these deals, unlike the ones utilized in MLB, are split evenly amongst all the teams. It’s the reason why, when an NFL team goes up for sale, prospective buyers come out of the woodwork tripping over themselves to submit bids that dwarf the GNP of some small countries. As a point of reference, the Arizona Cardinals, a team that has not won a championship since the 1940s and has played in about a handful of playoff games since the NFL reorganization in 1958, was recently valued at a few ticks shy of a billion dollars. However, this comment is the least of Wilner’s misrepresentations.
He alludes to the myth that a salary cap somehow affects competitive balance, despite the volume of evidence to the contrary. If the goal of a professional sports team is to win a championship, it stands to reason (at least to some) that teams with more financial resources will win a disproportionate share of those championships. Luckily, this theory is easy to test, as MLB is the only major league of the four that does not utilize a salary cap of any sort. We would expect that there would be a high correlation between a team’s resources and the number of championships won, with championships restricted to those teams with the most financial clout.
This, however, is simply not the case. In the last 30 years, 20 different teams have won the World Series, compared to 14 different teams winning the Superbowl, 13 teams winning the NHL Stanley Cup, and 9 winning the NBA championship. The only league without a salary cap produced more than twice as many winners as the NBA (a league with a soft cap) and 42% more winners than the NFL (a league that uses a hard cap), the cap model that people like Wilner and his ilk drool all over. No better example can be found than that of the “Evil Empire,” whose salary exploded from around $100 million at the turn of the century to around $200 million at the close of the first decade of the new millennium. In that decade, these Yankees teams won two championships (2000 & 2009), one more than the Florida Marlins (2003), a team with a payroll hovering around $37 million. Hardly the sort of dominance one might expect just looking at financial numbers alone.
Now it’s at this point that I inevitably hear “well, it may not bear out in championships, but it certainly bears out in terms of how often a team makes the playoffs.” This is something that I have not seen another author tackle, and after assembling the data, I now know why.
First, some comments on my methodology. I chose to compare the NFL and MLB because it represents a disparity between a league that uses no cap at all and one that utilizes a hard cap (one could argue that the NBA’s soft cap with the Larry Bird exception which allows you to sign your own players at any amount really isn’t a cap at all). It is the stark contrast of the MLB and NFL salary models that leads many to compare the two systems to each other, leading most to conclude that the NFL’s hard salary cap model is clearly superior to the MLB model in terms of team competitiveness. It is this assertion for which I take umbrage.
In looking at the results for Major league baseball, I charted all the playoff teams from 1995 through 2009, a total of fifteen seasons. I started at 1995 because this was the first year baseball used the expanded playoff format to include wildcard teams, and I wanted the data to be as consistent as possible throughout. For the NFL, I charted the playoff teams from the 1993-94 season through the 2007-2008 season, also a total of 15 seasons. I chose to start in 1993 for the NFL data because this was the first year of the salary cap. It also works out well that the NFL expanded the playoffs to 12 total teams in 1990, meaning that my data will be fairly consistent throughout the fifteen years.
For the NFL, 12 teams make the playoffs out of the 32 total teams each year, meaning that 37.5% of the teams in professional football make the playoffs each season. In MLB, 8 of the 30 teams make the playoffs each year under the wildcard format, meaning that 26.7% of the teams make the playoffs each year in baseball. Thus, from the beginning, the conclusions need to reflect that an NFL team has a greater chance of making the playoffs than does a MLB team entering the season.
As part of the methodology, I simply counted the number of times each team made the playoffs in the fifteen year interval for both sports. A few initial observations are worth being made. First of all, every team in the NFL made the playoffs at least one time, with Arizona, Houston, and Seattle of the AFC with the fewest at one (the last two can be easily explained as the Houston Oilers relocated to Tennessee and the Houston Texans did not start playing games until 2002 and the Seattle Seahawks moved to the NFC beginning with the 2002-03 season). In MLB, there were a total of four teams that did not make the playoffs even one time, the Blue Jays (who won back to back world titles just a few years prior to these numbers), the Kansas City Royals, the Pittsburgh Pirates, and the Montreal Expos/Washington Nationals. However, given that two fewer teams in each league make the playoffs in MLB, it is not that statistically significant that some teams would miss the playoffs altogether as compared to the NFL’s low counterparts that reached the playoffs just the one time.
Also of note is that both leagues clearly had teams that were successful outliers. In the NFL, the Packers were the most successful franchise having made the playoffs a total of 11 times in that fifteen year span, with both the Steelers and Patriots accomplishing the same feat 10 times, followed closely by the Indianapolis Colts and Dallas Cowboys who reached the playoffs 9 times apiece. In Baseball, the New York Yankees and the Atlanta Braves garnered the most appearances in baseball, reaching the playoffs a total of 14 and 11 times respectively. The next best teams were the Boston Red Sox and the St. Louis Cardinals, who reached the playoffs 8 times each, and the Cleveland Indians, who accomplished this feat a total of 7 times.
The question then becomes, how best to use this data comprehensively to determine if there are meaningful differences in the competitive balance of the two leagues visa-via access to each sports’ postseason tournament. In the NFL, over a fifteen year period of time, there is a total of 180 playoff spots available to the teams (not distinguishing between the conferences) and a total of 32 teams. That means that statistically, if each team earned an equal playoff share, each team would capture 5.6 playoff spots over the fifteen year period (calculated as 180 divided by 32). Furthermore, since no team can capture more than one playoff spot per season, this number would also by definition reflect the number of different seasons throughout the fifteen years that a team should qualify for the playoffs if they earned an equal share. The same calculation was made for MLB, however, using their total number of playoff spots for the fifteen years (120) and dividing it by the total number of MLB teams (30) to arrive at an even 4.0. And again, this reflects the number of years in a 15 year span that a team should make the playoffs given the number of teams competing for the number of available slots in the post season tournament (note : for reasons that have never been clear, there are 16 teams in the NL and 14 in the AL. This means that, when taken together, the numbers are correct, though the chances of making the playoffs in the AL are statistically greater than they are in the NL).
All that is left to do is compare the number of teams that qualified for the playoffs for at least the average share number (4.0 in MLB and 5.6 in the NFL) to see how each league is doing relative to the other. In MLB, 16 of the 30 teams qualified for the playoffs four seasons or better, for a percentage of 53.3%. The matter becomes a bit trickier for the NFL, given that it is impossible to qualify for a playoff spot a fraction of a season. As it turns out, there were five total teams that qualified for the playoffs exactly five total times, meaning that the numbers are going to be fairly skewed if you either completely include or exclude all five of these teams. Thus, as a compromise, I chose to err on the side of inclusion, including three of those teams while excluding two of them (I did this even though 5.6 is slightly closer to six and thus you could argue to round up). Including three of these teams means that a total of 18 of the 32 NFL teams made the playoffs at least 5.6 years or better, for a percentage of 56.2% of the total teams eligible to do so. In other words, approximately 3% more of the NFL teams qualified for the playoffs the expected number of times (3% of 32 teams comes out to .96 of a team, meaning essentially one extra franchise in the NFL qualified the expected number of times over a 15 year span).
Now the author wants to make one additional point, and it’s that the numbers above were not meant to be exact, just close approximations of the playoff activity over a fifteen year span for two sports leagues. For one, both leagues went through expansions (the Cleveland Browns were added in 1999 and the Houston Texans in 2002 in the NFL and the Arizona Diamondbacks were added in MLB in 1998) which would slightly throw off these numbers as I simply used the base of 30 and 32 teams throughout the fifteen year analysis. The point is that it is close, that this gross disparity that many fans and the media assume exist between a league with a cap and one without in fact does not exist (imagine if I ran the NBA numbers given that the same teams seem to qualify for the playoffs and win championships each year). And it’s also worth noting, that, missing from the analysis above is the possible effect that the luxury tax could have on further increasing competitive opportunities in MLB. This tax, which started in 2003, taxed teams for exceeding payroll figures above a certain amount, redistributing the income to the “smaller” market teams to use for their payroll (although this last part is a foreign concept to an owner of team in South Florida who will remain nameless). This author chose not to run these numbers because the sample size is too small, but common sense dictates that if the luxury tax has any effect at all, it will be to increase the opportunities for the smaller market teams in MLB to get into the playoffs.
In part two of this article, the author will specifically talk about why the salary cap, as used in the NFL, is unfair to those teams that consistently draft and develop well. He will also talk about some common sense approaches to improve the competitive balance in both leagues, assuming, of course that this is something that the leagues are genuinely interested in doing (as opposed to paying lip service to the concept as a means of selling the use of payroll caps to control salaries).