Jordan Montgomery, Rangers, Diamondbacks is proof MLB desperately needs a salary cap

The Arizona Diamondbacks made a surprising move on March 26 by signing left-handed pitcher Jordan Montgomery, a free agent whom the Texas Rangers had an interest in but were hesitant to pursue due to financial considerations. This occurred in the backdrop of both teams having recently competed in the 2023 World Series, where their deep playoff journeys had boosted their revenues.

Despite facing disruptions in their regional television deals with the bankrupt Diamond Sports Group, the Diamondbacks, according to their owners, were in a better financial position to secure Montgomery's services, even though the Rangers typically have a higher payroll.

Montgomery, 31, agreed to a one-year contract worth $25 million with an option for 2025 that could also reach $25 million, set to start his season in Triple-A and make his major league debut no later than April 19.

Ray Davis, the Rangers' owner, cited concerns over potential competitive-balance tax penalties and uncertainties regarding future local television revenue as reasons for not signing Montgomery, highlighting his crucial role in the Rangers' first World Series win last October.

Conversely, Ken Kendrick, the Diamondbacks' owner, attributed his decision to sign Montgomery to three factors resulting from the team's unexpected success in 2023: significant increases in playoff-generated revenue, season-ticket sales, and single-game ticket sales, bolstered by the team's performance and heightened fan interest.

Despite this, the Diamondbacks' financial strategy and spending have been cautious, aiming for sustainability and competitive growth without compromising their future prospects or financial stability. This approach reflects a broader ambition to remain competitive in a challenging division while managing resources effectively, as illustrated by their investment decisions and the flexible contract offered to Montgomery.

What Jordan Montgomery, Rangers and Diamondbacks mean for MLB's salary cap potential

This scenario sheds light on several aspects of Major League Baseball that could be used to argue in favour of implementing a salary cap. Here are the key points as to why the MLB urgently needs to implement some sort of salary cap:

Financial Uncertainty and Risk - The Rangers expressed concern about potential penalties and the uncertainty of their local television revenue, impacting their willingness to engage in high-value signings. A salary cap system could introduce a more predictable and level playing field, reducing the financial risk associated with such uncertainties and allowing teams to make more strategic long-term decisions without the fear of severe financial repercussions.

Sustainability and Long-term Planning - The Diamondbacks' approach to financial management and player signings, opting for shorter contracts to mitigate risk, reflects the broader challenges teams face in maintaining competitiveness without jeopardizing financial stability. A salary cap could help ensure that teams are not only competitive but also financially sustainable, encouraging more prudent financial planning and investment in talent development.

Fan Engagement and Marketability - Competitive balance is crucial for maintaining fan interest across all markets. When fans believe their team has a fair chance of competing, engagement and support can remain high. A salary cap could ensure more teams are competitive more often, enhancing the overall marketability and appeal of the league.

Implementing a salary cap in MLB would not be without its challenges, including negotiations with the players' union, which might see a cap as limiting earning potential. However, by addressing issues of competitive balance, financial uncertainty, sustainability, and equality, a salary cap could potentially lead to a more dynamic, competitive, and financially healthy league, benefiting teams, players, and fans alike.