When Major League Baseball Instituted the Luxury Tax during the last collective bargaining agreement, it wasn't meant to be a fix-all to baseball's struggling economic conditions. Economists and baseball owners were hoping for revenue sharing, or a salary cap. The strength of the players union, and the need for the game to avoid another labor strike, led to an agreement in 1998 which would use a sliding scale, to penalize the teams which pay the most on player salaries, and re-apportion that money to the teams that spend the LEAST amount on player talent.

While this seemed like a good idea since the small market teams were struggling to compete, there were no controls put in place to manage how that money was spent, and also there were no controls in place to show whether or not a team was cheating by spending less and turning a profit, and then being subsidized additionally for it.

The Pittsburgh Pirates, having turned 17 consecutive losing seasons, the most in professional sports history, have been one of the teams with their hands out, claiming that their small market status doesn't allow them to compete on an equal foothold with larger market teams in New York, Chicago, Los Angeles and other large U.S. Cities. This year, the Pirates once again pushed the reset button, trimming massive amounts of payroll, going again below 50 Million in player salaries, and having the youngest average age of any team in the Major Leagues.  Since 1992, the Pirates have claimed they've been forced to trade away top talent prior to free agency so to get something back for players who would be paid much larger contracts than they could afford, and while this was once the case, let's examine the true facts as they stand today.

Anyone with time and motivation, can easily find the financial information available for all major league teams on Forbes, the link for the Pittsburgh Pirates follows:http://www.forbes.com/lists/2009/33/baseball-values-09_Pittsburgh-Pirates_339965.html. To summarize the information there, the Pittsburgh Pirates have turned an operating profit, on average, of $18.6M per year since 2005, including a $16M profit in 2009, when they were "forced" to trade popular and productive players such as Jack Wilson and Freddy Sanchez after their failure to agree to contract extensions which were considered far below market value. In 2008 when they traded all-star left fielder Jason Bay (amongst many others) to Boston for prospects, the Pirates turned an operating profit as $18 Million. In another interesting statistic, Forbes allows us to see the average player cost per win for each francise. Any ratio over 100 would be spending less/win than the average team in the league. The average ratio for the Pirates over this time period is 133, which is 33% less money/win than the average franchise. Basically, we don't invest in our players, so even though we don't win many games, our bottom line doesn't particularly suffer because of it.

With the Pirates receiving 10-20 Million each year in luxury tax, and their operating profit being at least that, one can easily surmise that the Pirates ownership is simply pocketing that as profit rather than reinvesting it into long-term contracts for popular and productive players, or by improving the team via free agency. When this is done, noone wins. Not the teams being charged the tax for trying to make the team better, and surely not the fans for the teams who ar struggling, but that which ownership doesn't use the tax in good faith to compete.

The suggestion of this writer is to make the luxury tax only payable to teams who spend an allotted minimum on player salaries. For example, to receive the 15 Million, you must spend at least 60 million on player salaries, thereby decreasing the ability for management to pocket the money, have it increase at the same rate as player salaries each year. Teams like the Pirates would no longer be able to cut salaries below a certain range and then expect to get a windfall for their efforts. The fans don't care if the team is profitable, and after 17 losing seasons, why should they? This tax wasn't created for owners to make a profit, it was created to allow them to compete and remain operable. Just read some of the public comments from the stories posted on mlb.com or the PIttsburgh Pirates fan page on Facebook, for example....the fans are wise to this abuse.

Another idea would be to force teams to spend the prior year's profit on extra player salaries the next year. If you claim a 20 Million operating profit in 2008, and you were given 15 Million on revenue sharing, then you have to increase your player salaries by 15 million the following year to show you've spent the money towards increasing the competitiveness of your team. There is no reasonable argument against this type of arrangement. It helps everyone win, and keeps anyone from cheating the system. Major League Baseball Owners take note: the fans are watching, do not lie to us.