We’re going to break some news here on SportsAndMaybeOtherThings.com: The Dodgers are a very good baseball team and have been for a while (yes, I know the title says “NFL;” stay with me, football fans).

People have a lot of feelings about this and things seemed to have reached a fever pitch on the eve of the trade deadline when the two-time reigning champions traded for two-time Cy Young Award winner Tarik Skubal.

A loud sentiment after the trade was that the Dodgers are “ruining baseball” (or something to that effect) and the league office needs to take measures to stop them. The most popular of these proposed measures is a salary cap (I generally reject this sentiment overall and I would argue the bigger problem is teams towards the bottom of the payroll rankings not spending enough of their revenue).

This chorus was growing louder even before the Skubal trade¹ (though an unnamed team executive told CBS Sports that “the owners and the league are pumped,” presumably because the move will make their desire to cap payroll an easier sell), but the actual results on the field challenge the notion that MLB has a competitive balance problem in the first place.

In a Bluesky thread earlier this year, YES Network researcher James Smyth compared results of the major North American men’s sports leagues and noted that MLB acquits itself quite well. As of the time of his post, he found (among other things) that baseball was the only one of the four to see more than half its teams win championships this century and the only one since 2015 to get at least half of the league to the championship round. He added that coming into this calendar year, baseball had seen the highest rate of teams make multiple playoff appearances, and the highest rate of teams to reach both the league quarterfinals and league semifinals.

While these might not be perfect barometers of competitive balance, they’re also far from what you would expect from a league “dominated by a small number of big market teams,” as the refrain goes.

Still, one thing we should be mindful of is the structural differences between the sports; basketball is by far the least prone to upsets² while one position in football has outsized importance — of the 27 Super Bowls this century, only six have not featured Tom Brady, Patrick Mahomes, Peyton Manning or Ben Roethlisberger.³

These differences mean that when judging the efficacy of a salary cap, we need to also look at how things may have changed within each sport itself.

We’ll point the microscope at the NFL since it seems to be most lauded for its parity, and look at results since it implemented its salary cap in 1994 (while making a mental note that unrestricted free agency was put into place a year earlier, a potentially confounding variable that would be difficult, if not impossible, to fully disentangle).

One tool we can use is the Gini coefficient. It is usually used to measure income inequality⁴ but we’ll use it to measure if winning percentages have gotten more equal over time. The metric is scaled between 0 and 1, with higher numbers representing more inequality (note the nature of sports means one team cannot hoard all the wins, so our upper bound is not actually 1).

An effective salary cap should in theory correspond with lower Gini coefficients, so if this has been the case in the NFL, we should see a drop after 1994.

Looking at the league since the merger, there is indeed a noticeable dip here, but it’s in 1978, not in 1994. This may not be a coincidence, as 1978 was when the league went to a 16-game schedule and began to base a team’s schedule in part on where it finished the previous season.

If we look at the entirety of the pre-salary cap era, the average Gini coefficient is about 0.230, compared to 0.221 from 1994 onwards. This marks a slight, statistically insignificant, improvement in competitive balance.

Isolating the 16+ game era instead,⁵ we see that the period from 1978-1993 has an average mark of 0.217, meaning intra-season competitive balance actually got ever so slightly worse with the salary cap.⁶

If we instead compare the eight seasons before and after the league began using prior standings to inform the schedule, we do see a statistically significant improvement in competitive balance⁷ (the schedule changes are almost certainly not doing all the work here, as the late 1970s also saw expansion and on-field rules changes).

Perhaps the lesson is that there are more levers to pull to increase competitive balance than just capping payroll. In fact, a 2011 study looking at all “Big Four” leagues found that revenue sharing was the most impactful policy affecting competitive balance⁸ (compared with salary caps, salary floors and free agency), while reaching the same conclusion as we did that salary caps did not significantly reduce the spread in wins.

That said, concentration of winning percentage is not the only way to measure competitive balance.⁹

While a league where every team goes 8-8-1 has more parity than a league littered with 15-2 and 2-15 teams, there is more to the story than just the current season.

What if a bunch of those 2-15 teams went 15-2 the following year, while the 15-2 teams had an equivalent reversal? These developments would not lead to any change in Gini coefficient, but it would be wrong to say this hypothetical league lacks parity or competitive balance.

In Part 2, we’ll keep this in mind, and look to see if there has been a significant difference in this kind of year-to-year churn before and after the implementation of the salary cap.

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