Since the end of the World Series, speculation about where ace pitchers and free agents Gerrit Cole and Stephen Strasburg will sign has been widespread. While we cannot yet know where they will sign, it is all but certain that they will receive multi-year contracts worth at least $200 million each. Most reasonably educated baseball fans know that free agency was not always part of the game and are familiar with the origins of free agency. Players like Curt Flood, Andy Messersmith, Dave McNally and Catfish Hunter as well as Marvin Miller, the former leader of the Major League Baseball Players Association (MLBPA) challenged the reserve clause, in the case of Flood at great personal cost, and created free agency as we know it today.
The first big year of free agency was the 1976-1977 offseason where several big name players changed teams. By far the most famous of these players was Reggie Jackson who signed a five-year contract with the Yankees and became the face of free agency, as well as, for many, the archetype of the modern, money-driven, egotistical player. In the late 1970s, Jackson and others were held up as examples that ballplayers were overpaid and that money was ruining the game.
Jackson’s contract paid him $3.3 million over five years, meaning his annual salary was $660,000. That was a lot of money in 1977 when the median household income was $11,692. This meant that in the first year of his new contract, Jackson was making about 56.5 times the amount of the median American family. Only a decade earlier the highest paid ballplayer was Willie Mays who made $125,000 in a year when the median household income was $5,934. Mays made 21 times the income of the average American household in 1967. That was still very good money, but nothing like what Reggie made with the Yankees.
Baseball salaries, and their relationships to what ordinary Americans make are totally different today than what they were in the late 1960s, late 1970s or any time in the 19th or 20th century. In 2018, the highest paid player in the game was Clayton Kershaw who made $35.5 million. Meanwhile, the median household income in the US for 2018, the most recent year for which data are available, was $63,179. Kershaw’s income was almost 562 times that of an American household. The increase in the ratio between what baseball players earn and what fan earn has, thus, changed dramatically in recent decades. If we looked at the average baseball salaries rather than just the highest, the change would probably be even more dramatic. For example, the average ballplayer salary in 2018 was $4.41 million or almost 70 times the median household income for the US.
This rapid increase in player salaries relative to the incomes of ordinary Americans has dovetailed with an awareness of income and wealth inequality that has not been seen in the US since the Great Depression. The Occupy Movement, which began in 2017, gave rise to use of the phrase “the one percent” to represent the very small proportion of the population that controls an enormous amount of our country’s wealth. In both 2016 and 2020 Democratic presidential candidates have run on platforms that explicitly challenge the legitimacy of extreme wealth in the US. Both Bernie Sanders and Elizabeth Warren, two of the leading candidates for the democratic nomination, have embraced a wealth tax aimed at only the richest Americans. Similarly, the slogan “every billionaire is a policy failure” has gained traction on the left.
Fans have long resented the high salaries paid to ballplayers even when, like when Reggie Jackson was hitting home runs for the Yankees, the relative income of the players was much lower than it is today. However, in recent years some of this rancor has been turned on ownership as well. The Ricketts family’s support for President Donald Trump has upset many Cubs fans. Similarly, the contribution that Charles Johnson, a member of the Giants ownership team, made to Senator Cindy Hyde-Smith from Mississippi in 2018, a Republican who had made racist comments during her campaign that year, infuriated many Giants fans.
For the moment, this is on the periphery for MLB which has its hand full with potential labor unrest and a cheating scandal involving the Houston Astros, but the central challenge of marketing a game whose players’ and employers’ income exponentially exceeds that of most Americans is unlikely to go away. Simply put, baseball’s future relies on people continuing to spend increasingly large amounts of money to see players who make somewhere between 70 and 600 times the income of the average American, despite accelerating changes in how extreme wealth is viewed by the American people.
This discrepancy between the wealth of those who watch the game and those who play it, and profit from it, could raise other problems as well. First, the steady increase in the cost attending games is not sustainable. Second, resentment of the wealth of the players could lead to more angry fans, who make baseball less enjoyable for everybody. Lastly, if more Americans simply stop worshiping accumulation of wealth for its own sake, something that is very possible in the current political climate, baseball in its current economic configuration will become less attractive for many.
Baseball, likes other professional sports, is facing a dilemma. MLB could ignore the huge gap between the income of those playing the games and owning the teams and that of ordinary Americans. They could hope the growing rancor towards the wealthy, and the revitalization of leftist economic policies, does not spill over into how working Americans choose to spend their entertainment dollars. That strategy might work, but even if it does it will likely only be a short-term solution as divisions between the wealthy and everybody else, and the politics around that, will almost certainly get more, not less, intense in the coming years. The second option for MLB would be to recognize that they are not just in the business of dividing money between owners and players, but that there is a third party too– fans. Considering the economic interests of fans would be in the long term interest of the game, but it is about as likely to happen as Cole and Strasburg both signing with the Florida Marlins.
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