Both the NFL and the NBA have tanking issues; just ask fans of the Dolphins, Browns, and Sixers. This is due primarily to competitive reasons, however–not financial ones. Franchises that tank do so in the hope of trading extremely poor performance in the short run for success in the future.
Due to the adoption of the capitalist model, MLB is in a different position. The franchises break down into three groups:
- A small number of very large market teams with extremely lucrative local TV contracts never tank–the enormous fan base would never tolerate it. That doesn’t necessarily mean these teams will always be good; bad management can get in the way, as Mets fans will be happy to tell you. They are never deliberately bad, however.
- At the other extreme, you have the “Moneyball” teams: Tampa Bay and Oakland. These franchises never increase payroll substantially, due to their financial limitations; they try to beat you with innovation. They’re pretty good at it, too.
- The teams in the middle engage in “cyclical tanking.” At one end of the cycle, when the team becomes expensive, but has no reasonable chance of winning the World Series, ownership sells off the underperforming veteran players, drastically lowers payroll, and plays younger, less expensive players, in the hope that they will improve to the point where it makes sense to invest in a few outstanding free agents. Payroll then increases as the team improves until it is no longer competitive at the highest level, at which point the cycle begins again.
The trend in MLB is for even large market teams which used to be in the first group, such as the Red Sox and the Cubs, to engage in cyclical tanking. Fortunately for fans and the owners, enough teams are on the upswing of the cycle at any given time to prevent the large market teams from winning the World Series every year. The cycles are different for each franchise; some manage to prolong the upswing section by developing good young talent and making shrewd trades in the sell-off phase (Cleveland), while others are poorly managed, never produce good homegrown talent, and are always rebuilding (Baltimore, Pittsburgh). Nevertheless, cyclical tanking means that there will always be several teams that are absolutely terrible, and have no realistic chance of making it to the postseason.
“Cyclical tanking” is a disaster for mediocre veteran players. The median salary in MLB has fallen over the last few years even as compensation for elite performers has soared. It cannot be overemphasized, however, that it was the players, not the owners, who insisted on the capitalist model. They have done this to themselves.
How did the latest labor agreement address the cyclical tanking issue, and help the middle class? I will discuss that in my last post on the subject.