When things come to an end, it’s usually time to reflect, and as Drew Fairservice brought to our attention yesterday, the Minnesota Twins with their $100 million payroll and potential to lose 100 games, could stand to do a lot of reflecting this off season.

While any team that loses so much while spending even more is a good argument against the need to implement a salary cap, Tom Tango puts into words an additional argument that, in typical Tango fashion, seems obvious upon reading it, but to the best of my knowledge, hadn’t been expressed before. The man behind The Book takes issue with an offhand remark from Pittsburgh Pirates owner Bob Nutting who says:

There’s no question that, a market like Pittsburgh, a salary cap would be advantageous.

Oh, really? Tango points out that with the inefficiency in cost / value comparisons between free agents (with MLB playing time) and draft picks (as well as  international free agents), a salary cap on payrolls might do more harm than good to small market teams.

Let’s say that the Yankees currently spend, on payroll and player development (minor leagues, drafts, recruiting, etc) a total of 250MM$.  Let’s say that, currently, they spend 210MM$ on payroll and 40MM$ elsewhere.  Now, MLB imposes a hard cap of say 150MM$.  What do you think the Yankees will do with the 60MM$ that they are used to spending on free agents?

Tango assumes that a large portion of those additional dollars would be spent on draft picks, foreign signings and player development.

 If you shut out the Yankees, you are simply going to force a redistribution of spending.

And that redistribution would actually force the Yankees to spend their money in a more efficient manner, leaving less opportunity for teams like the A’s and Pirates to do so. In other words, the real problem in baseball’s pursuit of an increased competitive balance isn’t the distribution of wealth, but rather the knowledge gap between the smart general managers and the not so smart ones.

Instead of looking for a cap on payroll expenses that would only force money to be better spent by big market clubs, small market teams would do better to take advantage of the inefficiencies in free agent spending.

The resulting discussion on Tango’s blog is almost as interesting as the post itself.