You know you're on the fast track to gluttony when rappers are envious of
your lifestyle. What exactly is baseball money?
Baseball money is 9 of the 10 largest contracts in the history of sports. Or 17 of the 20
largest contracts or 30 of the 50 largest contracts. That’s amazing. 60% of the
50 largest contracts in the history of sports belong to one sport. But these
salaries don’t match with the popularity of Major League Baseball and hint at changes in the future.
In 2011, the sports universe almost imploded. The potential
of protracted work stoppages in the NBA and NFL, far and away the two most
popular sports in the US, almost trapped fans in sports' no man’s land. I don’t
know what I was going to do without an NFL AND NBA season last fall. It’s the
sports equivalent of sending fans into the Heart of Darkness, savagery was
almost guaranteed.
These work stoppages produced immense change in NBA and NFL
landscapes. The NBA completely revamped its business model, amnestying almost $342 million worth of contracts and adding jersey patch sponsorships to try to
rake in an additional $100 million. The NFL made drastic changes
as well. Rookie contracts were growing faster than Rex Ryan’s waistline
(shoutout to Rex for dropping over 100 lbs this summer) but now these contracts are scaled.
Even star players in the NFL have trouble demanding sizable contracts (remember
the Drew Brees saga?). Meanwhile, the Houston Astros signed Carlos Lee to a 6 year/$100 million contract
(in 2006) that was twice the size of the Red Sox's David Ortiz’s contract that same fall. When
you have a chance to lock up a guy that’s half as good as David Ortiz for twice
the money, you have to do it, right?
More troubling is that MLB salaries don’t correspond with
baseball’s popularity. The NFL has the lowest average salary despite the best
fan attendance and largest television audiences in the 4 major sports. NBA players enjoy much greater
endorsement contracts than their peers in MLB and they can’t demand the salary
that MLB players take for an afterthought. Consider, the top 10 compensated athletes
in MLB and the NBA:
- 90% of the $250 million earned by the top 10 MLB players in 2012 was from salary
- 61% of the $308 million earned by the top 10 NBA players in 2012 was from salary
- These NBA players earned $120 million in endorsements or 380% more their peers in MLB
- NBA endorsement money is equal to 53% of the salary made by MLB’s top 10
The posterchild for baseball money is the Yankees' Alex Rodriguez and he
demonstrates the salary/popularity mismatch. Rodriguez, the highest paid player
in MLB, has signed two contracts totaling over half a billion (that’s with a
b) in salary. However, A-Rod only made $3.5 million in endorsements last year (I love
putting "only" before an amount in the millions…). In contrast, Kobe Bryant, the
NBA’s highest paid player in 2011, collected $28 million in endorsements. MLB stars
like the Minnesota Twin's Joe Mauer who are not tainted by the specter of steroid aren’t
that marketable either, Mauer pulled down $2.75 million in endorsements last year.
I bring up endorsements as a way of gauging popularity
because I’m not sure the American sporting public will miss baseball if a work
stoppage is imminent. The NBA and NFL are stocked with stars that marketers and
the public enjoy courting and even that level of popularity wasn’t enough to
derail work stoppages in each sport last fall. Maybe baseball owners are
wealthier than owners in the other sports so they don’t care that their
business model doesn’t look as endurable as the other major sports. One
thing is certain, when it comes to giving $100 million contracts, MLB owners
have less restraint than Christian Grey in his red room of pain. Only time will
tell if fans can free themselves from these seductive billionaires.
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