(NOTE: This is a copy of the email I sent out earlier, except for the sentence in green. That does not change the import of the message, since it merely articulates an applicable rule.)
Our rules direct that I set the salary cap each year based on MLB team salaries. The rules say our salary cap is to be set at
“75 percent of the median MLB team salary from the most recent MLB Opening Day salary list”
In light of salary declines in MLB, I hereby set out the ruling for the 2019 Opening Day Salary Cap:
Our 2019 Opening Day Salary Cap is $94,000,000. The salary cap will increase by $500,000 each month, starting May 1, to an eventual maximum of $96,500,000. No one over the salary cap can make a trade that increases his team’s salary obligations this year, nor may anyone make a trade that puts a team over the cap. The rules also make a team over the cap ineligible to draft. But, in light of the precedent set the last time we had a team over the cap, every team is guaranteed the right to use the $500,000 monthly increases to draft with during the summer, and can carry over unused balances in the monthly increase for use in later drafts.
EXPLANATION OF MY RULING:
First, a note about my possible conflict of interest: the Wolverines are well under the salary cap, with the second-lowest salary in the league. To the extent the Wolverines would benefit from any decision, it would be for as low a cap as possible, and with no grace for those over the cap, to reduce the competition for players and maximize the value of the scarce money the Wolverines have in abundance. My proposal is counter to my Wolverine interests to the extent it raises the cap, or offers grace to those over the cap.
Second, about the rules: they don’t specify where to get the MLB salary information. We have used two main sources for our opening day salary list: USA Today and Baseball Prospectus. We don’t specify which one, which I have treated as allowing me to consult them both (or even other sources) and use whichever data that year seems to be most reliable and give us the most consistent treatment for setting our salary cap each year.
The “75% of the median” quoted above wasn’t our original salary cap rule. At first we set our cap at 25% percentile of MLB teams’ salaries. Then one year that rule seemed to penalize us with a salary decrease despite generally rising MLB salaries. So we voted to switch it to 75% of the median salary, which is our current rule.
This year generally the average MLB team salary load has declined. How far it declined depends on what source you use. Last year we used a figure of $132,548,946 as the median, which I got from … I don’t know for sure. I can’t find that figure anywhere. It’s not far from BP’s median last year, but that seems to have been adjusted sometime after Opening Day. 75% of that was $99,400,000, so we rounded it to the nearest quarter million to make our cap $99,500,000, about a 2.5% increase.
This year BP reports the median team salary at $123,144,583, midway between the 15th highest team (Milwaukee at $123,430,400) and the 16th highest (Arizona at $122,858,766). Applying our current rule would produce a figure of $92,358,437, which I should round down to $92,250,000 EXCEPT our current rule also limits cuts in salary to 6% per year. That would make the salary cap $93,500,000 using BP data and our current rule. Four teams would be over the cap.
USA Today sets the median MLB team salary at $125,352,688. 75% of that is $94,022,015 , for a salary cap of $94,000,000. Four teams are still over that cap.
If we were to go back to our original rule (25th percentile of all team salaries), USA Today would put us at $102,500,000 for a salary cap. BP would put us at $97,500,000. We would all be under the USA Today cap, but two teams would still be over the BP cap with the original rule.
So here are the four options.
Option Z (25th percentile using USA Today numbers): $102,500,000.
Option Y (25th percentile using BP Numbers): $97,500,000.
Option X (75% of the 50th percentile, using USA Today): $94,000,000.
Option W (75% of the 50th percentile, using BP): $93,500,000
My ruling applies the current rule in the manner most favorable to most teams. I add something NOT in the rules: the right to draft with the $500,000 increases we get each month, even if the team is over the cap.
Here’s why I did that. The last time we had a decline, it left one of our teams over the cap with no resources to draft with during the summer. We either created the $500,000 increase per summer month to respond to that problem, or we adapted it to the problem, I can’t remember which. Either way, we let the team over the cap use the $500,000 per month increase to draft. I believe we even let that team carry over unused increases from one month to the next. But we never wrote that into our rules.
To my mind, it is so hard for us to anticipate drops in salary cap that it is unworkable (and thus unfair) to penalize people for not foreseeing such an event. Also it makes the summer a lot less fun for them. Teams under the cap still have a huge benefit in having more money to draft with. So, for fairness and fun, I favored giving every team at least a little bit with which to draft.
WHAT YOU CAN DO ABOUT MY RULING:
The amount of the salary cap is not reviewable unless you think I violated the rules. The rules give me the task of making any judgments they allow. If you think I violated the rules, bring it up at the next meeting and the owners will vote.
The provision allowing teams over the cap to draft with our $500,000 monthly increases is not strictly within the rules. It is only justified by an implied power in the commissioner’s office to act in the best interests of the league. The rules don’t say I have that power. If I do, my actions are reviewable on petition of three owners and majority vote of the ownership. If I don’t, then my ruling acts as a proposed rule change (perhaps temporary) requiring approval of a majority of the owners. Either way, I propose that part of the ruling to be voted on at our next meeting.
If you want to try to talk the league into going back to the 25th percentile rule I am happy to see the league vote on that. I consider going back to the old rule to be beyond my discretion. However, I will advocate against the $102,500,000 salary cap in an era of declining salaries.
On reflection it seems clear we should decide our salary cap issue BEFORE the next meeting. The ruling I’ve posted is the default: if we don’t decide to do something else, our rules require us to have a salary cap of $94,000,000, a decrease of $5.5 million. If we want to change that outcome, we can, by vote of the league.
We aren’t ready to vote yet. I’d like more discussion. So far the alternatives we can discuss are:
1. Adopt a rule allowing us to choose between 25th percentile salary, or 75% of the median salary, at least in cases of salary cap decline. That would allow us to use a $97,500,000 salary cap. There would still be two teams over that cap.
2. The Lampe Proposal, which I will articulate like this: in years in which our salary cap declines, we repeat the previous year’s salary cap and implement the decline in the following year’s salary cap, GF Employee Empowerment style. Everyone is at or under last year’s opening day salary cap.