"The era when only the LA Dodgers smiled has ended." Why MLB ultimately did not adopt a salary cap, and winning the World Series for the first time in 56 years in the OTT era... [Lee Jong-seong's Sports Culture & Industry]

*This content was translated by AI.View Original

Unlike other American professional sports leagues, Major League Baseball (MLB) does not have a salary cap. This means there is no upper limit on the total payroll of a team. As a result, MLB has become the most unequal league structure in the United States, as wealthy teams with large budgets are more likely to achieve good results.

Instead, MLB utilizes a luxury tax. The official name of the luxury tax is the Competitive Balance Tax. It is imposed on "big market teams" whose total payroll exceeds a certain threshold. Approximately 50% of the revenue collected through the luxury tax is distributed to "small market teams." This is done to promote balanced development within the league. However, its effect is limited compared to a salary cap.

Before the start of the 2026 MLB season, the biggest concern for baseball fans was whether the LA Dodgers would achieve a three-peat in the World Series. If the wealthy Dodgers were to win their third consecutive title, arguments emerged that MLB should introduce a salary cap. Voices rose stating that small market teams could no longer compete fairly with big market teams relying solely on luxury tax distributions.

There was another unique aspect of MLB involved here. Local broadcasting rights fees account for approximately 23% of the total revenue of MLB teams, which is the highest ratio among American professional sports leagues. Big market clubs located in major cities have recorded enormous revenues based on local broadcasting rights fees over time. For small market clubs located in mid-sized and small cities, local broadcasting rights fees were also an important source of funding.

The problem is that with the media environment being restructured around OTT platforms and YouTube, the local broadcasting model based on cable TV has lost its competitiveness. Amidst this situation, local broadcasters primarily located in areas where small market teams are based have reduced the number of games they broadcast or even gone bankrupt. This was a direct blow to small market teams. It was difficult for small market teams to overcome the crisis with only luxury tax distributions.

Interestingly, two small market teams advanced to this year's World Series. The protagonists were the Milwaukee Brewers and the Tampa Bay Rays, who ranked 19th and 28th, respectively, in total payroll among MLB teams this season.

A characteristic of both teams is "small ball," a style that frequently employs strategic plays such as stolen bases and sacrifice bunts to increase on-base percentage. Tampa Bay and Milwaukee successfully stole 164 bases (tied for 2nd) and 162 bases (5th), respectively, this season, and recorded 0.29 (1st) and 0.24 (4th) sacrifice bunts per game.

The frugal baseball of these two teams, which relies less on home runs and extra-base hits, was completed with various strategies to score one run once a runner is on base. This was a realistic alternative for small market teams that must build their rosters with cost-effective players who offer "low salary, high efficiency." Instead of restraining themselves from signing free agents (FA), the two teams focused on smart trades and developing young players.

The Milwaukee Brewers, who claimed their first-ever World Series title this year, could be said to be a team created by Bud Selig. Bud Selig, who accumulated wealth through an auto dealership business in Milwaukee, acquired the Seattle Pilots, which was on the brink of bankruptcy, in 1970 and became the inaugural owner of the Brewers.

He had been nurturing the dream of establishing a new professional baseball team in Milwaukee by forming an investment group since 1966, when the Milwaukee Braves relocated to the major city of Atlanta. Passionate baseball fan Bud Selig could not forget the memory of the Milwaukee Braves winning the World Series championship in 1957 thanks to the outstanding performances of Hank Aaron, who was the home run champion at the time, and others.

Selig's dream seemed to be realized in 1982. The Milwaukee Brewers advanced to the World Series and aimed for the championship. Milwaukee held a series lead of 3 wins and 2 losses, bringing their first-ever title within reach, but they lost consecutively to the St. Louis Cardinals in Games 6 and 7, falling short of victory.

Selig, who became the interim commissioner of MLB in 1992, left many significant achievements during his 23-year tenure. He expanded the number of MLB teams to 30 and created interleague play, which consists of regular season games between National League (NL) and American League (AL) teams. Additionally, he increased the number of postseason participating teams to maximize MLB's revenue. This was the background behind MLB's revenue growing significantly from 1.6 trillion won in 1995 to 9.8 trillion won in 2014.

However, among his many achievements, the most notable is that he introduced a revenue sharing system and a luxury tax, partially resolving the wealth imbalance between teams. He originally intended to introduce a salary cap in MLB, but it failed due to fierce opposition from the MLB Players Association, which was concerned about reducing player salaries. This led to the 1994 strike and the cancellation of the World Series. The luxury tax and revenue sharing system were alternative measures established afterward.

At 92 years old, he handed the ball to team legend Robin Yount, who served as the ceremonial pitcher for Game 1 of this World Series. As the eternal advocate for small market teams, he emphasized in an interview with The Athletic on the 23rd that a salary cap is necessary for the balanced development of MLB teams.

The Milwaukee Brewers have retired jersey number 1 to honor their inaugural owner, Bud Selig, and his statue stands in front of their home stadium. Mark Attanasio, the current owner of the Milwaukee Brewers, has stated, "Without Selig's blood, sweat, and tears, neither the team nor the home stadium would exist."

In that regard, the World Series championship for Milwaukee, which waited 56 years, is a tribute to Selig. It also became a beacon of hope for poor teams struggling in competition in MLB without a salary cap.

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*This content was translated by AI.View Original