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Baseball players to make $3.5 billion this year — they should be making more

Mar 26, 2014, 11:35 AM EDT

Money Bag

My dad was a federal government employee. For years we lived in Flint, Michigan where, back then anyway, everyone in the city worked for General Motors. Big UAW town, obviously.

His favorite part of that whole dynamic — apart from when his Toyota would get keyed in parking lots and, later, have the windows bashed in — was the difference between how government salaries were reported compared to UAW salaries. If government workers got a raise, it was always reported by the Flint Journal in the aggregate: “Government employees get $1 billion raise,” the headline would scream, along with some sidebar about how Gerald Ford was busy bankrupting the nation. If the UAW got a new contract it’d be reported by the hour, as in “Autoworkers get 50 cent raise,” with a sidebar about how crazy inflation was and how 50 cent raises didn’t get you jack squat.

I bring all of this up because you’ll see a roughly similar dynamic once this news starts to circulate, courtesy of CNBC:

Baseball been very, very good to a lot of people.

The 30 teams in Major League Baseball will collectively pay their players some $3.45 billion this year, according to data tabulated by The Associated Press . . . By way of perspective, at an average of $4.6 million, the average player would make more than 100 times the average American wage earner, based on Social Security Administration data.

Expect a lot of “those greedy players” rhetoric shortly!

Of course, absent in this report and presumably absent in the impending rhetoric is the fact that baseball as an industry brought in a record $8 billion+ last year, meaning player salaries are around 43% of revenues. Which seems high — depending on the industry, labor usually costs anywhere between 10 and 30 percent of revenues — but shouldn’t be all that surprising considering that in baseball, labor and the product being sold is one and the same. Indeed, the ballplayers and the games they play are the only reason the owners make that $8 billion. They are not a mere input to a more valuable finished product. The owners are not fabricating sheet metal before they can sell their product and stuff.

So enjoy your $3.45 billion, ballplayers. To be honest, I think you should be making more.

  1. renaado - Mar 26, 2014 at 11:38 AM

    Does Milb players salary count on that too?

    • Craig Calcaterra - Mar 26, 2014 at 11:44 AM

      Nope. 25-man roster.

      • renaado - Mar 26, 2014 at 11:50 AM

        I see, Thanks for that .

      • stlouis1baseball - Mar 26, 2014 at 1:56 PM

        “My dad was a federal government employee.”

        This explains everything!

    • paperlions - Mar 26, 2014 at 12:45 PM

      Also separate revenue streams, many MiLB teams are profitable and player salaries are paid by those teams (unless it is a player who has had his contract purchased by the parent club).

      • eshine76 - Mar 26, 2014 at 12:50 PM

        When the players get paid, they receive a paycheck from the parent club, not the affiliate they play for.

      • paperlions - Mar 26, 2014 at 12:51 PM

        So when there is transaction that states “Player X had his contract purchase from AAA affiliate by Team Y”…that means what?

      • paperlions - Mar 26, 2014 at 12:58 PM

        Huh, my apologies. I went and looked and apparently all players salaries are picked up by the parent club (as well as coaches salaries), but the MiLB club is responsible for all other expenses.

      • DJ MC - Mar 26, 2014 at 1:04 PM

        The “contract purchase” stuff is a relic from the days of the independent minors.

      • eshine76 - Mar 26, 2014 at 1:05 PM

        Honestly, I don’t know that, but my best guess is they “purchase” just means the replacement of that minor league contract with a major league contract, since they’ll be subjct to the pay minimums, benefits andrights under the MLBPA.

      • paperlions - Mar 26, 2014 at 1:07 PM

        Yep, after a bit of research, that is probably what that means…but like you said, the source of the salary doesn’t change, just the amount, benefits, and union membership.

      • kevinbnyc - Mar 26, 2014 at 2:59 PM

        Thanks for the knowledge. I’d honestly like to see someone (cough…CRAIG…cough) write an article on a contract being “purchased,” a player being “outrighted” vs. “optioned” to AAA, etc. For all I know, most of the terms are just different ways of saying the same thing, but I have no idea.

      • rockymountainoysters - Mar 26, 2014 at 8:50 PM

        I have no idea what a contract being purchased really means, but I can explain to you the difference between optioning a player and outrighting him.

        Every player gets 3 option years after they’ve been placed on a 40 man roster. This is where a team can call him up and send him back down to the minors at will. This is your typical move for most young players who bounce between AAA and the majors. Even at AAA, they remain on the parent club’s 40 man roster.

        Outrighting a player means the parent club wishes to remove him from the 40 man roster entirely. The club has to place the player on waivers, where any other team can claim him if they so choose. If no one claims him, they can send him to AAA and open up both a 25 and a 40 man roster spot.

        Hope that helps, and that I got the details right…

  2. tn16 - Mar 26, 2014 at 11:53 AM

    I completely agree. But I feel like the extra money should be heading towards the minor leagues when some guys are making Maybe 10,00 a year lots of lower level guys like A level or summer league making way lower

    • voteforno6 - Mar 26, 2014 at 11:59 AM

      I think that there’s already a lawsuit regarding minor league salaries.

    • eshine76 - Mar 26, 2014 at 12:41 PM

      Minor leaguers are playing for their dream to make the big leagues – the money doesn’t / shouldn’t matter. Besides, during the season their salary (outside of cheap rent, possible car payment and taxes) is almost all profit as they have many expenses during the season paid for. That’s more than what they were getting playing in high school or college the year before.

      I remember when I was fresh out of college and my dad asked how my job was going. I told him that it was ok, but I was hungry (like Ramen Noodle “hungry,” not begging or eating out of garbage cans “hungry”). His response – “Good; you’ll work harder.” That’s life. If you really want something, you have to sacrifice.

      • paperlions - Mar 26, 2014 at 12:47 PM

        Right. The fact that the vast majority of them will never make it and will have no saving with which to go to college or a trade school and will have no marketable skill….that’s fine, just pay them nothing because 1 out of 100 will realize their dream.

      • eshine76 - Mar 26, 2014 at 12:56 PM

        Minor league baseball is not a career (although I acknowledge it isfor some); it’s more like a paid internship. These guys figure out pretty quick whether they have the tools to make it or not, with many weeded out before they hit AA. That’s only about two years of their life. How many of your friends had everything figured out two years after high school or college? How many had substantial savings two years out of high school or college? Let’s not act like these guys are screwed for life because of two or three years of minor league ball.

      • DJ MC - Mar 26, 2014 at 1:09 PM

        Minor-league baseball isn’t an internship. It is an entry-level job. As you develop your skills and prove yourself better than your peers, you get promoted until finally you get in a position to make real money. However, that doesn’t mean workers at lower levels–while they should obviously be paid significantly less–get essentially nothing.

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 1:23 PM

        Minor leaguers are playing for their dream to make the big leagues – the money doesn’t / shouldn’t matter. Besides, during the season their salary (outside of cheap rent, possible car payment and taxes) is almost all profit as they have many expenses during the season paid for. That’s more than what they were getting playing in high school or college the year before.

        I’d highly recommend reading Dirk Hayhurst’s books about this. Crashing at his grandmother’s house while borrowing her car because he can’t make ends meet is more a reality for most minor leaguers than what you wrote.

      • eshine76 - Mar 26, 2014 at 1:34 PM

        Internship, entry level job, whatever you want to call it. Minor league pay is not locked in where Low-A players only make $X, and AA players only make $Y. Obviously, clubs, like any business, have a range they prefer to work within a certain range, depending on talent, league level, etc. However, all of these players have agents to negotiate for more money than the guy next to them.

      • eshine76 - Mar 26, 2014 at 1:52 PM

        While I’m very familiar with the book, I admit I haven’t read it. It’s one I’ve been meaning to pick up.

        With that said, I don’t know where I’m wrong in my statement. It’s true that many of their expenses are paid for during the season. It’s also true that the $15k they make is more than the $0 they were making before. Is it minimum wage? Yes. Its not good money; not at all. However, many have off-season jobs and still live with their parents, like a lot of other kids fresh out of high school / college. Yes, there are certainly guys who struggle to make ends meet, but that’s happening today all around us. However, those outside of minor league baseball don’t have the shot at making millions.

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 3:04 PM

        It’s true that many of their expenses are paid for during the season.

        Like what? They pay their own housing, transportation to and from the ballpark, food and other living expenses.

      • careyb44 - Mar 26, 2014 at 3:56 PM

        I agree. When the time comes that minor league teams can’t get enough players
        to field a team, then the pay will go up. The market will and should determine the
        compensation. If advocating for raises in professions makes us all feel better, I am all
        for it, as long as we start with mine first.(although I may be unworthy since I am actually
        on company time right now…..)

      • Jason - Mar 26, 2014 at 5:02 PM

        careyb44 – MiLB isn’t a free market.

        The players are the property of the team that drafts them until they have 6 years of Major League service time. They can’t negotiate a higher salary or leave for another minor league team.

        Once they sign their initial contract they have two options: take the pay they get or quit baseball.

      • careyb44 - Mar 26, 2014 at 5:33 PM

        “Once they sign their initial contract they have two options: take the pay they get or quit baseball.”

        Jason, that is exactly my point. If the pay is substandard, don’t sign the contract. No one
        is forcing them to sign, just as nobody forced me to take my current job. When enough
        of the “applicants” refuse to sign, then the pay will naturally go up. ( or we won’t have
        minor league baseball….)

      • davidpom50 - Mar 26, 2014 at 5:49 PM

        carey, your analogy to your own job is not accurate. If you don’t like your pay, you can probably market the same skills you’re already using to another company – depending on what you do, perhaps a competitor, or perhaps a completely different industry, but where skill sets transfer (for example, every industry needs accounting people like myself). Baseball players don’t have that right. They can’t market their baseball skills to a different team.

        MiLB players are getting screwed by their own union, who does not fairly represent them.

      • careyb44 - Mar 26, 2014 at 11:29 PM

        I never said they “had” to play baseball? Most of the kids drafted are on college
        scholarships. If the minor league money is so bad, why not finish school and get a better
        paying job. There are other options besides baseball, especially when you are 22 years old.
        As long as these kids keep chasing their dreams and signing these contacts at the
        current pay levels, nothing will change. For ever player that signs now, there are 100s of
        other that would have, that didn’t get offered. As long as MLB has this endless supply of
        prospects that will play a game for basically room, board, and a dream, the system will
        carry on. There is no point in collectively wringing our hands over it.

      • eshine76 - Mar 27, 2014 at 10:45 AM

        Church – if you are still reading this thread, here are the other expenses they have covered: food is always available in the clubhouse, both home and away. They receive a per diem when on the road. Gear is paid for by a combination of the parent club, minor league club, agents and companies endorsed by the player. In addition, minor league clubs negotitiate low rent rates on apartments for the players in exchange for guaranteed occupancy, tickets, and marketing at the ballpark. Finally players can also earn additional money for doing public appearances for the team and through endorsement deals (yes, even guys in A ball drafted in the 20th round have deals with companies, although I will admit its not much and is usually in exchange for merchandise moreso than cash). They also have health insurance.

        I offer all of this because I worked in minor league baseball for several years. I got to know several of the guys along the way. They come from all walks of life – some from strong families with income; some from broken homes and nothing to fall back on; some bonus babies; some not drafted; some with kids; some with a girl in every town. All of them wanted to make it to the bigs for various reasons. Maybe the big money payoff mattered, but the money they were making at that time was only a stressor to the guys with kids.

  3. jikkle49 - Mar 26, 2014 at 12:06 PM

    From what I understand baseball brought in 8 million dollars of revenue not profit.

    I’m don’t take issue with what players make because as noted they are a big reason the MLB makes what it does but I don’t think they deserve anymore either.

    Players aren’t the ones that take on the costs of operating a business and are just responsible for keeping in shape, keeping their skills sharp, and showing up for work.

    • chiadam - Mar 26, 2014 at 12:10 PM

      If revenue was $8 million and players get $3.5 billion, they did pretty well. Some owners might need night jobs as Costco greeters to cover the $3.492 billion shortage.

    • renaado - Mar 26, 2014 at 12:15 PM

      I think it was 8 Billion though not “million”.

    • paperlions - Mar 26, 2014 at 12:48 PM

      Every owner makes more money owning his team than any player will ever make during his career, no matter how horrible they are at owning and running their team.

      • stlouis1baseball - Mar 26, 2014 at 3:10 PM

        Sure. It’s about risk versus reward Paper. You are a smart guy. This is how the business world works..and you know it. I fully expect to make more money running my business than any of my employees will make in their respective careers. The only difference for me is…if I am horrible at running my business it fails and everyone loses their jobs. I absolutely will not apologize for being compensated accordingly.

      • paperlions - Mar 26, 2014 at 3:16 PM

        Nor should you be….but your employees are replaceable, in MLB the entire basis of profit is the talent of the players. Without their monopoly in place and their control of stadiums built with public money, the owners would be up a creek. Baseball is not a normal business…owners are not taking any financial risk by owning the team (heck, they won’t even build their own stadiums), they are just making most of the money from some one else’s work/talent. As in other things, pro sports don’t translate well to normal business models.

      • stlouis1baseball - Mar 26, 2014 at 3:29 PM

        Sure…they are replaceable. But they are skilled tradesmen. Much like I feel about ballplayers (skilled tradesmen). I am only as good as my weakest employee and vice versa. If I take care of my employees, they take care of me. It really is that simple. Same as a baseball franchise. I can’t just pluck a guy off the street and tell him to open up a set of Architecturals and start estimating projects. Whereas, Bill DeWitt can’t just pluck a SS off Spruce Street. They are giving almost 45% of revenue to their employees. Wrap your head around that for a minute. That in mind…I wholeheartedly disagree with your claim that the owners have no financial risk. 45% of revenue!

      • paperlions - Mar 26, 2014 at 3:44 PM

        Find me the last baseball owner that lost money owning his team…then I’ll admit there is risk. McCourt made over a billion dollars off of his team and it is hard to be worse at owning a team than he was…same with Loria.

      • stlouis1baseball - Mar 26, 2014 at 4:04 PM

        Lol! As I stated…we should have gotten in the baseball ownership market. I mean…it’s easy. Right?
        We missed the boat!

      • paperlions - Mar 26, 2014 at 4:05 PM

        At least you had a chance, you went into business…but I don’t think you are dishonest enough to have become a billionaire so you could buy a team.

      • stlouis1baseball - Mar 26, 2014 at 3:33 PM

        Aside from this…we can both agree we would have been far better served owning a baseball club. Lol!

      • stlouis1baseball - Mar 26, 2014 at 4:08 PM

        I will give you that. Chances are…most billionaires were quite dishonest at some point during their respective climbs up the proverbial corporate ladder.

      • paperlions - Mar 26, 2014 at 4:11 PM

        I don’t mean to be judgmental about that…it is just that it is a dirty game with high stakes, if you play honestly, someone is probably gonna beat you. I guess I’m jealous of the freedom that kind of wealth provides, but I am definitely not jealous of the life you have to lead to develop the wealth in the first place.

      • stlouis1baseball - Mar 27, 2014 at 10:36 AM

        “I guess I’m jealous of the freedom that kind of wealth provides, but I am definitely not jealous of the life you have to lead to develop the wealth in the first place.

        Well put Paper. 100% on point…for both of us.

    • forsch31 - Mar 26, 2014 at 12:49 PM

      Yes, revenue is not profit, and that’s the $8 billion.

      In saying that the players should be making more than 43.7 percent of the team’s revenue, Craig is not factoring in the money of that revenue that goes toward employee salaries (coaching staff, sales, security, stadium, scouts, administration, etc.), benefits, insurance, maintenance costs, taxes, and other operating expenses. Remember, even though the minor league players aren’t part of the players union, those teams’ staff and players are still paid by the major league organization and thus part of operating costs. So, major league players are pretty much taking a little less than half of a team’s revenue off the top.

      Players put their bodies on the line and allow the team to use them to market the business, so what they make in relation to that revenue is pretty important. But what usually gets lost in these discussions is how the team as a company bears the financial cost of the game, and that there are other major operating expenses outside of player salaries.

      • crackersnap - Mar 26, 2014 at 1:48 PM

        In fairness, there have been quite a bit of articles in recent years concerning how severely the owners have been cutting back on staff and staff salaries via intern abuse, cutting staff insurance & benefits in the process or in parallel, and cutting scouting departments. Not to mention deferring responsibility for stadium maintenance to local governments or, as in one recent infamous example in Anaheim, seeking creative ways to reduce maintenance costs without consideration for greater consequences.

      • forsch31 - Mar 27, 2014 at 3:19 PM

        Which teams have those articles been focusing on? Because according to Forbes, 17 of the 30 teams in the majors make less than $10 million a year in operating income, with 11 of them with a loss. Anaheim’s operating income last year, for instance, was $5.8 million.

        When companies get into a financial crunch, they begin to cut financial corners, which means staff and salary cuts and finding other ways to pass along costs to others. Unfortunately, that also means people are out of jobs.

        Since I went through that myself for far too long, that’s pretty much why I have zero sympathy for either owners or major league players when it comes salaries. It’s just greed without, as you say, consideration for greater consequences.

      • stevesherman161 - Mar 29, 2014 at 4:15 PM

        Compare the percentage of revenue ballplayers get to that in the NHL and NBA, where the split is defined by the CBA. Even granting that MLB franchises have player development expenses that the other leagues don’t, it’s still a nice deal. You’ve got to work pretty hard at it to lose money in baseball these days (and a well-heeled owner may even choose to in order to be competitive). And given the inflation in franchise value, when you sell you’ll make back your losses and then some.

        But I wouldn’t say that therefore players ‘should’ make a higher percentage of revenue. The market seems to be working out very nicely for everybody–at the major league level.

  4. bluemoonking - Mar 26, 2014 at 12:13 PM

    Really… I am not a fan of the owners but to be fair, what about the costs associated with the other 15 players on the 40 man roster. The minors and the signing bonus(s), winter leagues and other player development. How much are the people who work for the franchise paid? Maybe a good portion is about the players but what about the managers, coaches, trainers, medical staff and the front office staff in general.

    You also failed to mention that about 10 percent make 90 percent of that 3.45B… How many teams made a profit off that 8+ billion last year and actually had a good record? You want a fair disbursement? It’s not going to happen until we see a salary cap and revenue sharing in baseball… The sun will burn out first.

    Come on… Sounds like a communist manifesto to me….

    • Craig Calcaterra - Mar 26, 2014 at 12:25 PM

      You’re using rhetoric similar to “the One Percent” stuff people talk about in income inequality and I’M the commie? 😉

      • bluemoonking - Mar 26, 2014 at 1:58 PM

        Do you wanna be? Lol…

    • renaado - Mar 26, 2014 at 12:29 PM

      I’m pretty sure some euphemism was added to that.

    • churchoftheperpetuallyoutraged - Mar 26, 2014 at 12:41 PM

      The minors and the signing bonus(s), winter leagues and other player development.

      Minors = aren’t most minor league teams affiliates, and not outright owned by the MLB clubs? So cost is nothing

      Winter leagues = there might be some MLB investment in things like the Cape Cod league or Arizona Fall League, but does MLB have any investments in the winter leagues in South/Central America?

      Bonuses = not every player got the Strasburg/$10M contract. Actual expenditures on the draft are peanuts compared to the rest of the “overhead”. For instance, the last uncapped year in the draft, the Pirates were the highest spenders and spent $17M total in ’11 (for 6 years of control remember).

      How many teams made a profit off that 8+ billion last year and actually had a good record?

      Without looking at the financials, I can guarantee almost every team made a profit last year, and will again this year because of the amount of TV money coming in.

      • eshine76 - Mar 26, 2014 at 12:48 PM

        The parent club pays for the players’ salaries plus some other expenses.

      • bluemoonking - Mar 26, 2014 at 1:13 PM

        Again, most of the TV money goes to the large market clubs… so, that theory blows…

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 1:26 PM

        The parent club pays for the players’ salaries plus some other expenses.

        Agreed, it was poor wording on my point. What I should have clarified is things like stadium costs and other costs of business aren’t provided by the MLB club. Although I’m shocked more of them don’t do it. Why not throw a couple hundred thousand, or maybe a few million into improving the lives of the minor leaguers? Wouldn’t having a healthy spread of food be far better than forcing the players to eat at *insert fastfood chain* due to their terrible $5 per diem?

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 1:31 PM

        Again, most of the TV money goes to the large market clubs… so, that theory blows…

        There are two national TV (ESPN/Fox) deals that put almost $40-$50M in the pockets of EVERY team which is what I was referring to. Lower revenue clubs also get a larger portion of luxury tax money to reinvest in their team.

    • stevesherman161 - Mar 29, 2014 at 4:20 PM

      A salary cap is compatible with the law of supply and demand?

      ‘Fair disbursement’ is compatible with a free market?

      Are you sure you didn’t flip the ‘capitalism’ and ‘communism’ tabs on your crib sheets for Economics 101?

  5. runhigh24 - Mar 26, 2014 at 12:31 PM

    The NFL, NBA and NHL all guarantee players around 50% of revenues so MLB is comparatively doing very well with its current labor deal it seems.

    • dadawg77 - Mar 26, 2014 at 1:48 PM

      Its a percentage of a revenue pool, which doesn’t include all revenue. The 8 billion does include all revenue, I think. Thus it isn’t exactly an apples to apples comparison.

  6. bluemoonking - Mar 26, 2014 at 12:35 PM

    What I am saying is if you are going to blanketly say that the players need to be paid more, you could actually make a reasonable case besides just being based upon what MLB grossed…

    I am sure you are not a communist, but “the One Percent” is alive and well in Baseball, Football, Basketball and Hockey. Most of what you have in collective bargining these days is the “One Percent” trying to protect that over anything that is better for the players in general.. Besides, you started it… Lol.

    • churchoftheperpetuallyoutraged - Mar 26, 2014 at 12:43 PM


      This word, it doesn’t mean what you think it means (communist != socialism). And what’s wrong with the people who actually make the product getting more of the money?

  7. gbrim - Mar 26, 2014 at 12:37 PM

    MLB should offer the MLBPA 50% of revenues in exchange for a salary cap and revenue sharing. Better for the players and better (long-term) for the game. I know it is not happening any time soon, but competing with the Yankees, Red Sox and now the Dodgers makes every other team a second-class citizen, hoping to ‘win the lottery’ and grab a playoff spot, then get lucky in the playoffs. Not the best way to build the sport, in my opinion.

    • churchoftheperpetuallyoutraged - Mar 26, 2014 at 12:45 PM

      The Yankees missed the playoffs last year, the Red Sox 3 of the last 4 years, and what have the dodgers won recently? And why not include the Phillies, Cubs and Mets who haven’t don’t anything recently either but are big spenders?

    • bluemoonking - Mar 26, 2014 at 12:47 PM

      No, it is not the best way to build a sport. But you have the owners against the “One Percent” and the networks that like “feel good” story’s about small market teams, but only while it generates ratings. If the networks had their way, it would be the Yankees vs the Dodgers every year in the World Series.

      Baseball is a unique game. It is not a talent acquisition game like Football and Basketball, but a talent development game. Even with the money spent by the large market teams, they have also been successful at developing talent.

  8. sdelmonte - Mar 26, 2014 at 1:07 PM

    Anyone know the percentages in the other sports? Because I was under the impression that baseball players are actually doing better than others after the most recent very pro-owners CBAs.

    I do agree with this premise, though. No one buys a ticket because of the owner.

    • bluemoonking - Mar 26, 2014 at 1:18 PM

      But no one buys bread because of the grain farmer either… It is much more complicated than that. I think baseball players do better than the other sports but I do not know much about the financials of Basketball…

    • churchoftheperpetuallyoutraged - Mar 26, 2014 at 1:28 PM

      The NFL is going to get worse (more pro-owner) because the cap amount is fixed compared to a possible significant increase in TV revenue (aka it’s not percentage based). Who knows about the NHL because they’re probably 2 years away from another lockout.

      • dadawg77 - Mar 26, 2014 at 1:51 PM

        Not sure on the NHL, but the NFL cap is a percentage of revenue and not set amount. Also different streams of revenue have different percentages going to the players. TV revenue has the highest percentage going to the NFL players so when the TV contracts come up again, the players pool will be greatly expanded.

      • bluemoonking - Mar 26, 2014 at 1:56 PM

        Again, the NFL is a talent acquisition league. The “One Percent” did sign a bad deal but it is also setup for teams to get better quickly. It is an anti-dynasty deal.

        The NHL is somewhat of an enigma. It is a game that is trying to make it in a foreign country. It desperately needs the American market but still has to retain the Canadian style of the game. It really needs to pick one or the other. Both are not working…

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 3:21 PM

        but the NFL cap is a percentage of revenue and not set amount

        I double checked, the owners wanted a set amount but it looks like the players wised up. My mistake. Here’s a link:

        %s are on page 83 (roughly 48% to 47% during this CBA).

  9. pappageorgio - Mar 26, 2014 at 1:11 PM

    Part of the problem with the “they should be making more” stuff for me……everytime the players get together and argue they want a bigger slice of the pie the bigger slice always goes to the top players. I love, just once, for a CBA to be constructed so that the minimums go up dramatically and the stars get paid about the same. Even if they increased it to a 50/50 split it really means the very best players get 5 million per year more and the bottom of the roster guy gets screwed.

    I wouldn’t say I’m pro owner….but the way players unions do deals completely to favor stars way above role players makes it really hard for me to feel for them.

    • bluemoonking - Mar 26, 2014 at 1:22 PM

      I think that is the way most of us feel. Craig, you did a great job on this in hind site. Better than spraying water on a bee’s nest… Lol

      Again it would be nice to make a case for it and compare the other sports financials in support. I think you have the chops but this maybe this is not he best forum for that…

      • churchoftheperpetuallyoutraged - Mar 26, 2014 at 1:32 PM

        You’re making claim after claim after claim that’s wrong and you want Craig to do some work for you?

    • stevesherman161 - Mar 29, 2014 at 4:32 PM

      I haven’t looked lately but I believe the MLB minimum salary is somewhere near half a million bucks a season. If that’s how the union screws the bottom of the roster guy, where do I sign up for some of it?

      The MLBPA is the most successful union in sports PRECISELY because it takes care of everybody. That’s why it’s also the only union that hasn’t required a work stoppage to complete a CBA in nearly 20 years. The owners know that, if push comes to shove, the players will hang together and outlast them. Labor peace has come about because of player solidarity, which is there because all members of the union know that their interests are represented.

  10. scoutsaysweitersisabust - Mar 26, 2014 at 1:27 PM

    And yet, they owners still can’t afford to build their own stadiums and rely on monies taken from the people in forced taxes, tax relief, and anti-trust immunity.

    • Professor Fate - Mar 26, 2014 at 1:59 PM

      Chances are very good they could in fact afford their own infrastructure, but there is no incentive for them to do so as long as they can squeeze that investment out of someone else. Why spend your own money to make a profit if you can put the risk on someone else’s back?

      Owners are very rich and can afford to have lobbyists and politicians carry their water with claims that a new stadium will make money for the hosting county and/or city. Voters need to pay more attention to the details of these scams (don’t hold your breath on that) or else all citizens in the affected area will continue to get fleeced.

      The NFL has yet to come up with a solution to the lack of a team in the nation’s second-largest market because they cannot see past their (very successful) business plan of extorting huge amounts of money from desperate communities who will do anything to get awarded a franchise. And that’s just for the chance of fielding a team, not counting the actual expense of doing so.

      L.A. has decided to forgo an NFL franchise because the voters will not give hundreds of millions of dollars to the league’s owners for the right to have a crappy expansion team. Investing private money to buy a franchise in the NFL would likely be a money-loser for many years, which is why no self-respecting billionaire has ponied up the cash.

      Professional sports in the U.S. is an anti-trust-protected monopoly (in the case of the NFL it is also tax-exempt). As long as investment interests can get others to pay for capital improvements, while those interests receive the majority of the profits, they will continue to do just that.

      • scoutsaysweitersisabust - Mar 26, 2014 at 2:01 PM

        Yea, my comment should have been read with the word afford in air quotes.

    • stlouis1baseball - Mar 26, 2014 at 2:57 PM

      Look…I absolutely despise tax payer funded stadiums.

      This in mind…how difficult do you think it would be to grow your business, build new facilities, hire new people, purchase new equipment, spend on new technology, etc… when almost 45% of your revenue is spent on employee salaries?

  11. bluemoonking - Mar 26, 2014 at 1:42 PM

    I do… This is entertainment… Nothing more and nothing less. And Craig was either having a bad day or wrote the column like that intentionally… I have the unique ability to disagree with some one but still engage respectfully… Now if the government could only do that….

  12. bluemoonking - Mar 26, 2014 at 2:47 PM

    The 40/50 million TV revenue from ESPN, et al. That does not even cover the Royals payroll…. Luxuary tax.. Really and that was 100 million per team???

    Larger market teams have their own TV/Radio deals for big bucks and share with no one… How do you think Texas affords the free agents?

    So, again, unless you are pulling TV money from where the sun don’t shine… It blows…

    • churchoftheperpetuallyoutraged - Mar 26, 2014 at 3:44 PM

      The 40/50 million TV revenue from ESPN, et al. That does not even cover the Royals payroll…. Luxuary tax.. Really and that was 100 million per team???

      I’m sorry, should TV contracts cover everything or does the team need to sell tickets first?

  13. stlouis1baseball - Mar 26, 2014 at 2:52 PM

    Almost 45% of total revenue goes to player salaries.
    Almost 45% of total revenue goes to player salaries.
    Now everyone…say it with me.
    “Almost 45% of total revenue goes to player salaries.”

    Does anyone with a business background care to expand upon this?

    • tearlw - Mar 26, 2014 at 7:15 PM

      The salary share of MLB players in 2002 was as high as 67% It gradually declined and stabilized at around 45% now. Mostly, that’s because MLB revenue went from $3.7B in 2003 to over $8B in 2013. Regional cable TV contracts have simply ballooned revenue for the teams so much in the last 10 years that player salaries (while still growing in dollar amounts) have fallen by 1/3 relative to team income.
      For example, prior to the 2010 season, the Texas Rangers signed a deal with Fox Sports Southwest worth $80M per year. Their cut of the national TV contract (starting this year for the next 7 years) is $25M. Which means the Rangers have $105M coming in without selling one ticket, one jersey, or one hot dog.
      For comparison’s sake, the NFL players’ cut of league revenue is 59%, in the NBA it’s 57%, and in the NHL it’s 56%. Those numbers are from 2008, but, as far as I know, they’re still well above baseball’s split. None of the teams in those leagues are in danger of collapse, much less the leagues themselves.
      As others have stated, baseball is a form of entertainment. It’s difficult to compare it with a normal retail or service business. Those customers don’t pay to watch the employees work, but in baseball they do. The players are the product. A better comparison might be other entertainment businesses like TV, movies, and music. Robert Downey Jr making $50M for the first Avengers movie will cause exactly no one to boycott the second Avengers movie. So why do people get mad about ballplayers making half that?

      • stlouis1baseball - Mar 27, 2014 at 10:46 AM

        Great point about the entertainment aspect of it Tearl. In fact, at the end of the day I have no problems with player salaries (specifcially). It’s the 45% of revenue that hit me in the face.
        It very much is entertainment. And for what it’s worth…I actually wrote a paper in college on this very subject. People pay to see them play. Much like actors…people pay to see their movies. It really does come down to what the market will bear. People aren’t paying to see us perform out jobs. This speaks volumes. I just can’t get my head around the 45% of revenue.

    • clemente2 - Mar 26, 2014 at 8:45 PM

      stlouis–look at the cost percentages in any service, finance. or entetainment business. There is almost no inventory or equipment costs. Lots of rent, computers, and people costs.

      The figure is only large for businesses in manufactoring or others with goods that need to be purchased, acted upon, and resold.

      • stlouis1baseball - Mar 27, 2014 at 10:41 AM

        Good post Roberto. And not that it matters to you…but your last sentence applies directly to my business. So I will admit it certainly hits home with me.

  14. bluemoonking - Mar 26, 2014 at 2:54 PM

    Heck someone with a baseball or sports franchise experience explain it…

  15. genericcommenter - Mar 26, 2014 at 4:02 PM

    The article was provocative but not unreasonable. I think Craig was more or less disagreeing with the “players make too much” crowd more than saying they are underpaid, while leaving open the possibility.

  16. moogro - Mar 26, 2014 at 7:13 PM

    I would go to more games if the tickets were cheaper.

    • renaado - Mar 27, 2014 at 3:48 AM

      That’s understandable. If it were like that average attendance will probably reach 40000 if that were to happen.

    • stevesherman161 - Mar 29, 2014 at 4:46 PM

      How much cheaper? You can see a ballgame in most cities for not much more than the price of a movie. Or do you insist on seeing it from the best seat in the house?

      Anyway, ticket prices are related to player salaries only indirectly, if at all. Franchises charge what the market will bear. Do you seriously believe your local team would reduce prices out of the goodness of their hearts if salaries went down?

  17. forsch31 - Mar 27, 2014 at 3:11 PM

    Forbes has released their annual “Business of Baseball”, and one thing to note is the “Operating Income”, which is the actual earnings of each club:

    11 teams have negative earnings, including the Dodgers, Yankees, Phillies, and Blue Jays. That’s roughly a third of the teams in Major League Baseball.

    The most profitable teams are the Cardinals, Astros, Giants, Braves, and Padres. Obviously, there are different ways to be financially successful in the league, and it isn’t as simple as the “players should be paid less” or “the players should be paid more”.

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