Small market MLB teams such as the A’s still won’t spend and chose not to keep their stars (2023)

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As Major League Baseball scrambles back to life after a three-month lockout, with spring training suddenly underway and players kissing family members goodbye before declaring themselves to be in the best shape of their lives, the Oakland Athletics traded a star player for a glut of prospects.

Truly, nature is healing.

The deal, which sent first baseman Matt Olson, Oakland’s best hitter by some distance last season, to the Atlanta Braves, was notable for what it said about the way the lockout had fundamentally changed the economics of baseball. Which is to say, it did not change them at all.

While the lockout dragged on through the winter, and even as games were being cancelled as late as last week, what was striking was how little was on the table. The MLB players’ union had already given up on changes that might have been transformative, such as allowing players to reach free agency earlier or transferring a larger share of revenues from big-market to small-market teams, and were instead haggling with the owners over what was essentially money at the margins.

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For many years now, baseball has seen just a tiny fraction of its 30 teams spend anywhere close to its luxury-tax levels, in sharp contrast to other North American leagues, where having loads of salary-cap space is relatively uncommon. The New York Yankees, Boston Red Sox and Los Angeles Dodgers are the only teams to exceed the tax level more than twice since 2003. More significantly, 12 teams had payrolls below $100 million US last year, when the luxury tax kicked in at $210 million. Another seven teams were under $150 million US. Two-thirds of the league wasn’t within $60 million US, or a couple of superstars, of having to pay the tax. By comparison, 27 of 30 NBA teams were within $16 million of the league’s luxury-tax number last season.
The MLBPA has long held that too many teams are too willing to operate on the cheap, and it went so far as to launch a grievance in 2018 that claimed four teams — Miami, Pittsburgh, Tampa and Oakland — had pocketed revenue-sharing money instead of investing it in improving their rosters. (The league tried to have that grievance dropped as part of the new CBA, but it remains unresolved.)

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But the new deal doesn’t contain any mechanism to address the problem, as Oakland has quickly underlined. In Olson, they had a 27-year-old corner infielder who led the team in hits, runs, doubles, homers, RBI and walks in 2021, and who was two years away from free agency. As is their way, they shipped him away while they could still net a big haul, which they did, getting four prospects from the Braves. If two or three of them are in the majors soon, Oakland might even get four or five seasons out of them before dealing them for prospects, too. You buy an Athletics jersey with a name and number on it at your peril.
Notably, the other side of the trade sees the Braves, recently crowned World Series champions, snag Olson so they no longer need incumbent first baseman Freddie Freeman, the 2020 NL MVP and occasional Canadian, who is a free agent and due a monster contract. Freeman, 32, will get a deal that will significantly overpay him for his declining years, because that’s just how it works in baseball. Very few teams have the stomach for these contracts at all, which helps explain why the Braves didn’t just hold their nose and give the face of the franchise the contract that he and much of the fan base was probably expecting. Letting him go also means the Braves, with a payroll just over $150-million last season, will have an easier time keeping well clear of that luxury-tax number, which jumps to $230-million in 2022.

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And that’s the thing about the baseball negotiations just completed: Even though the owners relented on increasing the luxury-tax levels well above what they had originally proposed, there is nothing that will obligate any team to exceed them, or even come within a shout of them. A few big-market teams will spend, a third of the league will spend less than half of the top teams, and another large tier will spend enough to be at least competitive. But with the playoffs expanded to 12 teams, the incentive to spend aggressively has just been reduced for that middle tier of teams.

And while the A’s trade wasn’t surprising given the team’s history, it does come as the Athletics try to work out the final details of a plan for a new stadium to replace the creaky, old Coliseum. Naturally, the team expects a lot of taxpayer help to pay for it.