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January 22, 2013

Out of Left Field

Why You Should Quit Caring About Salaries

by Matthew Kory

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I’m o-l-d-e old so I can remember when players made a few million dollars a year. I’m talking good players. The best. It’s a pittance compared to what they make today. Dave Winfield once signed a 10-year, $23 million contract. A Hall of Fame outfielder signed for $2.3 million a year. Infuriating! Rage! No way he’s worth that! But I can’t remember a time when players’ salaries were not a public discussion point.

For roughly the last three decades, salaries have been published, debated, and outraged over. Information on player salaries is ubiquitous nowadays but, if you think about it, that’s pretty weird. Baseball players and professional athletes in general are some of the only non-municipal workers in the world whose salaries are public information. Most people’s salaries aren’t made public. Front office executives don’t have their salaries appear in the papers, except occasionally.*

* Our own meticulously maintained Cot’s Contracts lists the salaries of only two General Managers or Team Presidents, those of the Yankees and Cubs. Every other team has managed to keep the salaries of their GMs and Team Presidents private.

Everywhere I’ve ever worked my employers have actively discouraged my fellow employees and I from talking to each other about our salaries. I’ve always freely admitted my salary to others, mostly because I see silence on the issue as an unfair advantage for management. Put it this way: you can’t hire Ted for $30,000 a year to do the same job as Larry, who started at $45,000, unless Ted doesn’t know what Larry makes. So too with relief pitchers, sluggers, back-up catchers and the like. I suspect this is why baseball player’s salaries end up in newspapers and on websites. The information comes from the players and, more specifically, their agents in an attempt to do on a large scale what I once did over coffee breaks or in my cubicle. So I get that.

But what makes it especially odd is that, while publicizing salary information has at least helped to establish equal wages for equal work, fan’s knowledge of player salaries has turned that particular part of the game into our own little hate-fest. Not a day goes by without some columnist, commenter, talk-radio host, or caller complaining that a player is overpaid. Because players’ salaries are freely available information has accidentally opened up a vein of attack.

Like that metaphor, the public’s reaction itself is strange. Overpaid compared to what? Teachers? Well, sure. Firefighters? Absolutely. How about overpaid compared to what players made when Whiney Olderson was young? Of course. But that’s not how it works. If you want to change that, then you’re looking at altering our financial system. Calling a player overpaid compared to other current players is also odd because of the different tiers of compensation that exist, as a player in his second year of arbitration has vastly different earning power than a free agent, regardless of which player is better (or more valuable) on the field. Players get paid for what they do on the field, but also by seniority. The second gets lost sometimes.

Some part of the complaint stems from, I believe, jealousy. It’s easy to think, "I’m doing my job and I work hard and in my lifetime I’ll never see the money that [insert player here] makes in [small time frame] and all he does is play baseball." That’s true to a certain extent and I won’t attempt to justify the way we as a society have allocated value to different professions. I admit there are times when you hear about negotiations between a player and a team and they’re haggling over “a few million” and you just internally sigh because, well you know because.  

But most fans, most intelligent fans that do more than drink beer and scream at stuff (not that there is anything wrong with that) care because of the perceived impact that player salaries have on their team. We want our favorite teams to get the best players and spending dollars on one player means those dollars can’t be spent on another player. It’s true that acquiring players takes more than just money, but it definitely takes money. But here’s the thing: if you own a professional baseball team you can afford player salaries. Dave Winfield’s $2.3 million dollars a year seems quaint now. But more than that it seems antiquated. Do you think for a moment that the Red Sox or Dodgers couldn’t have paid Winfield $2.5 million a season back in 1980? I have no doubt that they could. But they didn’t. There are reasons for this, of course. Just because management can afford it doesn’t mean they should pay it (at least from their perspective). But no team is going broke because of player salaries now and none did, nor came particularly close, in 1980 either.

This leads me to question whether player salaries have the impact we think they do. Does signing Zack Greinke mean you can’t sign or trade for some other expensive player? I used to assume so but with the money in the game and three decades of history indicating otherwise, I’m not so sure. The Dodgers are testing this with assists from the Detroit “You know? Sure. I’ll sign Prince Fielder for $200 million. Say, are you going to finish those chips?” Tigers and the Washington “How many closers should a team have? Three? Sounds about right” Nationals.

Dave Winfield’s deal with the Yankees was for 10 years and $23 million, or so Winfield thought. As the story goes, Yankees owner George Steinbrenner thought the deal was for 10 years, $16 million. Now, $7 million over 10 years is a rounding error in baseball contracts. The Dodgers are paying Zack Greinke $147 million over six years. Would either team or player notice if an extra $4.2 million was taken off or added to that contract? I mean, that’s real money, more than most of us will ever see, but in the course of this contract it doesn’t really matter. But in 1980 it was important enough to warrant a decade-long hissy-fit on the part of Steinbrenner. Except, I wonder if it really was. I’m sure the context was important, but I wonder if the dollars really were.

At least today, player’ salaries are affordable for all teams. Player salaries continue to rise and that wouldn’t be the case if teams couldn’t pay them. Deals signed 10 years ago look silly cheap now, just as deals signed now will likely look silly cheap in 2023. Don’t you think the Royals or Pirates would love to acquire a player for the cost of what star players made in 2003?

As long as that continues—indefinitely as far as I can see—owners will try to hold the line on salaries and present their cheapness to fans as fiscal sanity. Whether it is or not is up to you to decide. For me, the older I get the less I care what players make. If they’re good, sign them. Three decades of baseball history says owners can afford it. 

Matthew Kory is an author of Baseball Prospectus. 
Click here to see Matthew's other articles. You can contact Matthew by clicking here

32 comments have been left for this article. (Click to hide comments)

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BayCityM

Personally, I love the growing salaries in baseball. I live just outside an MLB city on the same street with a couple prominent players. The houses that they have built has raised the profile, and property value of my house. It is also nice having them around to spend the millions of dollars they are now getting paid in my neighborhood. That money makes it down to stake house waiters, car salesmen, and sprinkler companies. I thought I would offer a different perspective to the astronomical salaries.

Jan 22, 2013 06:05 AM
rating: 0
 
CrashJones

Nice read.

I have felt for years that players in a league should make roughly the same amount each. The star power a player has can make that player more money outside of their regular salary.

In that case, the players who were "replacement level" would still make a nice paycheck, but the league would also have better retirement/pension plans in place. The average length of a career isn't very long, but it takes the former part of that players life to make it all the way to the top.

My reasoning for this was so that the "common fan" wouldn't be left out in the cold, because of ticket prices, when it comes to attending games.

We seem to be way past all that these days, and the only way to set it up like that now, would be for a collapse of the current system(s).

If I were a player in today's game, I wouldn't want to "go backwards" either.

As a fan though, what is one to do besides boycotting something that you love. It's quite the pickle.

Jan 22, 2013 07:00 AM
rating: -1
 
Dodger300

Ticket prices are completely unrelated to the cost of players' salaries.

When the salaries of high-priced players come off the books, do you see the team's ticket prices go down? Of course not.

The free market dictates that teams will set the price of tickets at whatever they believe the market will bear.

Jan 22, 2013 07:26 AM
rating: 9
 
tonyfranco

Ticket prices have little to do with the salaries being paid to players but are a function of supply and demand.

Jan 22, 2013 07:31 AM
rating: 4
 
flyingdutchman

No one can afford to games anymore, and besides, they're always too crowded.

Jan 22, 2013 08:29 AM
rating: 15
 
GMaroni
Other readers have rated this comment below the viewing threshold. Click here to view anyway.

If no one can afford to go to games, then how are they also too crowded?

Jan 22, 2013 16:05 PM
rating: -5
 
RaysProf

Been to a Rays game?

Jan 22, 2013 18:11 PM
rating: 0
 
TonyinAsia-Pacific

Ignore salaries? I'm already there and I don't mean that in a flippant way. There's more interesting things to consider on and off the diamond...

Jan 22, 2013 08:15 AM
rating: 1
 
CrashJones
Other readers have rated this comment below the viewing threshold. Click here to view anyway.

I know there is much more to a teams income then actual ticket sales/pricing... but imagine(because that's what we have to do)...

Players salaries were reduced to $100,000 per year each on the 40 man... the price of tickets wouldn't go down?

I think they would.

I'm not an economist, and can't begin to know how that would affect everything from merchandising all the way to the local sports bar's price on draft beer.

I think though, that it would be reflected in the price of a ticket. At the least I would hope.

Jan 22, 2013 08:17 AM
rating: -4
 
flyingdutchman

They would go down slowly over time because baseball wouldn't be as good, so fewer people would want to go to games.

Why is this so difficult to understand?

Jan 22, 2013 08:33 AM
rating: 6
 
AdamSt

Why would ticket prices go down?

Right now, in general terms, people are pretty willing to pay $50-75/ticket for good seats to watch major league baseball and $7-12/ticket for "bad" seats. How does this willingness change if the players are paid less? Why would owners sell tickets for $20 if they could get $75 for the same seat?

Put it the other way, if every player's salary doubled next year would you willing pay more for your tickets?

For a given team acting independently increasing or decreasing payroll may impact ticket prices because it impacts that quality of the team and that shifts the demand.

Jan 22, 2013 08:56 AM
rating: 2
 
flyingdutchman

I think we mostly agree, Adam, but I think you missed my point. It is my belief that baseball attracts better talent when the salaries are commensurate with what those players bring to the game. Furthermore, the players work harder to stay in shape, etc, when they don't want to leave potential millions on the table.

Baseball is better now because the players are getting a more fair share of the gross.

CrashJones presented a hypothetical where 40 players make $100,000 each, presumably because of lower overhead. I agree with him that ticket prices would go down, but not for the reason he was implying. I think they'd go down because the product would not be as good, and demand would be lower. I personally think it would suck.

Jan 22, 2013 09:07 AM
rating: 0
 
prs130

How many ballplayers could make more than $100k if they weren't playing baseball? How many are currently foregoing a career in law or medicine? Probably not very many (even if you restrict the discussion to American-born players).

I'm guessing the on-the-field product would be fairly comparable in a parallel universe with $100k salaries. Drop it to $50k, then you'd definitely see some changes.

Jan 22, 2013 09:15 AM
rating: -2
 
flyingdutchman

All I can say is that I disagree.

Jan 22, 2013 09:18 AM
rating: 1
 
prs130

Babe Ruth made $20,000 in 1920, $80,000 in 1930. According to an online inflation calculator that comes out to $222k and $1.06M in 2011 dollars.

I'd be curious to know what replacement-level players were making back then.

Jan 22, 2013 09:25 AM
rating: 0
 
flyingdutchman

I think maybe $1,000 to $3,000. Just a guess, but I think it's close...

Jan 22, 2013 09:27 AM
rating: 0
 
gweedoh565

pres130, the real risk wouldn't be players forgoing baseball for medicine/law/etc., but for other sports where salaries are market driven. Many top prep athletes are heavily recruited for football and/or basketball in addition to baseball and certainly would be more likely to choose those routes if the potential salaries were so widely disproportionate.

Jan 22, 2013 10:40 AM
rating: 2
 
flyingdutchman

This is more than just a risk. It's the reality. Let's also not forget about all of the other people who put time and energy into funneling talent into professional baseball, be it Latin America or elsewhere. These are people that, one way or the other, get a cut of the action.

Anyway, this is somewhat beside the point. In so far as player salaries affect ticket prices, it is not in the way that is repeated ad nauseum on sports talk radio, some of which is bloviated by people who get to vote for MVP and the Hall of Fame. Generally speaking, higher player salaries have, if anything, driven up ticket prices slightly by making the game better. Attendance is currently at a historical high. This is a good thing in some ways, but it's bad if you're looking to take in an inexpensive game.

One more thing, on that note: When people complain about the price of a game, half of the complaint is about having to buy a bunch of garbage, in both food and styrofoam forms (sometimes both) for themselves and their kids. There is no real reason to turn a baseball game into a trip to Disney World. Pack a couple of sandwiches, an apple, and your own bag of peanuts, and if you want to guzzle lager then wait until you get home, where it's vastly less expensive.

Sure, I'm a curmudgeon, but the product on the field is still the best in the world, so if there's anything to boycott at your local mallpark it should be the now overwhelming emphasis on food and merchandise that is otherwise in no way special. Tough sell to the kids, I suppose, but I guess you could give them a choice - either one game the gluttonous American way or three games daddy-the-righteously-indignant-cheapskate-way.

This is probably one of the reasons I wouldn't make a good father, but I digress.

Jan 22, 2013 11:27 AM
rating: 4
 
CrashJones

My hypothetical would include that M.L.B. was still the highest paid league for ball players world wide, thus the one with the most talent...the talent goes where the money is, is your point I believe flyingdutchman.

So it would take a world wide collapse of ALL sports leagues and for them to begin anew in whatever forms. Only way I see that happening is alongside a world financial collapse.

I would rather not go through that though.

Adam LaRoche said they are all paid to much, and he's a player. I think he understands that society may be a little out of whack when it comes to financial matters while comparing different careers.

This is why it's at least still interesting... and why some people do still care.

Jan 22, 2013 19:20 PM
rating: -1
 
jnossal

What make you entitled to a cheaper ticket that some other person should take a paycut?

Feb 01, 2013 11:11 AM
rating: 0
 
CrashJones

"No one can afford to games anymore, and besides, they're always too crowded".

:)

I get it. Just a point of discussion. I should stop caring about salaries.

Jan 22, 2013 08:44 AM
rating: 0
 
jsdspud

Salaries of any job/profession are based on supply and demand. The supply of individuals that can hit a baseball is limited, so those that are successful get paid an awful lot of money.

It bothers me when people get upset about athlets getting paid X while(insert low paying job) gets paid much less. If you are not paid a lot for doing your job it is because someone else can replace you easily.

Also, why do actors get a pass when top stars make $20M per movie?

Jan 22, 2013 09:52 AM
rating: 2
 
flyingdutchman

They get a pass in part because the average ticket price for a movie goes up gradually, maybe 5 to 30 cents per year. The average ticket price for a movie is up about 100% from 20 years ago, but percentages don't matter as much at that lower price, especially when the increases are gradual.

People should not be complaining about player salaries raising ticket prices. The typical complaint is that they can't afford to go anymore and so they don't go, which is exactly what they should be doing if they'd like to see ticket prices go down.

Jan 22, 2013 10:09 AM
rating: 0
 
misterjohnny
(925)

You should care about salaries because you pay for them. Only partially through ticket prices. Mostly through your basic cable/satellite TV subscription.

Why did the dodgers spend tons of money this year? The same reason the Lakers signed Howard and Nash and kept Gasol. Because each of them were negotiating new TV contracts. You can't hold cable companies and satellite companies for maximum subscription numbers and maximum per subscriber rates unless the product is compelling. Sure the Lakers stink, but the deals were done before you saw the product on the court.

Paying the players less won't make the subscription rates come down, the increased salaries are more of an indication that your rates are going up. Again.

Jan 22, 2013 13:35 PM
rating: 0
 
Shaun P.
(676)

"You can't hold cable companies and satellite companies for maximum subscription numbers and maximum per subscriber rates unless the product is compelling."

I think this is now somewhat weighed down by the vast use of DVRs. Sports programming is the only programming I can think of that people can be counted on to watch live. Even if you wait 30 minutes after the broadcast starts and skip the commercials, as I often do, eventually you'll catch up to the live broadcast. This is especially true of baseball games, much less true of football games (thanks to timeouts, halftime, checking in on other games, etc).

Even with less compelling product, knowing people are going to be watching the commercials will keep rates for sports high.

Jan 22, 2013 16:52 PM
rating: 0
 
flyingdutchman

Same solution: Don't pay it. Being able to watch Lakers games is not a right, these are for-profit businesses, and they charge what they believe they can get.

This is only serving to obscure the point. Players are getting a larger share of the money that is being raked in, and you can't fault them for that. If baseball or any other sport has to negotiate smaller television deals because people have said "I've had enough of it" to their cable providers, sure, the players will begin to make less, but no matter how you slice it, it's not the fault of the talent on the field that it costs so much to watch a game, in person or on television. Players spent a long, long time getting a laughably small cut of the profits, and they've only recently started being compensated fairly. Wouldn't you know it that within a couple of years everything was all their fault.

Jan 22, 2013 13:56 PM
rating: 0
 
ttt

There's a great portion in The Mick where Mantle has an argument with Yankees' management because he's making less than Yogi, despite having a better year (I think it was his triple crown-winning 1956 year). It's amazing how getting rid of the reserve clause helped, but making contract terms public has probably had a greater impact.

Jan 22, 2013 15:33 PM
rating: 0
 
sroney

If you were REALLY o-l-d-e old, you would remember when a million dollar contract was five years at 200K/yr

Jan 22, 2013 16:10 PM
rating: 0
 
BP staff member Matt Kory
BP staff

I'm 37 so I might be that old but I'm not sure.

Jan 22, 2013 18:29 PM
 
R.A.Wagman

Great article, Matty. It is well understood in hockey that, it was only after then head of the NHLPA Bob Goodenow convinced the players to make their salaries public, the average salary skyrocketed. I read the figures a while ago regarding the before and after and the effect was astronomical.
In that sense, while we shouldn't care what players earn, we should still be interested.

Jan 22, 2013 16:27 PM
rating: 1
 
BP staff member Matt Kory
BP staff

Thanks, R.A.

Jan 22, 2013 19:40 PM
 
gdragon1977

As I recall, Steinbrenner didn't understand (or miscalculated) how the cost of living escalator in Winfield's contract worked. That was so shocking to me, that a big deal businessman could screw up something so simple.

Jan 22, 2013 20:00 PM
rating: 0
 
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