Friday, December 5, 2008

Major League Baseball and the Economy


Whether people want to admit it or not, it is clear that we are facing the worst economic crisis since the Great Depression. But will the tumultuous economy have a profound impact on Major League Baseball? A recent New York Times article addressed this question:

At the moment, baseball is bucking a trend. Teams are about to start awarding free agents lavish contracts that, in at least two instances, will almost certainly top $100 million. Meanwhile, the stock market continues to sink, retirement accounts are disappearing and the Big Three automakers are on the verge of bankruptcy.

It is unclear how much baseball is insulated from the nation’s economic problems and whether teams will cut back on the money they might normally offer free agents, or take other measures to save money.To date, the most vivid example that teams are keeping a close watch on the economy came last week, when the Boston Red Sox, a model of success on and off the field, announced they would not raise ticket prices for the first time since 1994.

As for baseball’s free agents, first baseman Mark Teixeira and pitcher C. C. Sabathia seem likely to end up with multiyear deals that could be worth close to $150 million. Others, like outfielder Manny Ramírez and pitcher A. J. Burnett, could easily get deals that top $50 million. Volcker’s remarks to the owners were unlikely to dampen those deals, but lesser free agents could be affected.

In my opinion, I believe it is time for teams to cut back on spending, at least until our economic issues are resolved. Now don't get me wrong, I believe players earn their paychecks, and I'm not complaining about high profile players. Instead, I believe the issue lies within low level players with inflated salaries.

Craig Calcaterra of ShysterBall recently worte an article discussing average salaries in the MLB. According to the MLBPA, the average salary in major league baseball is $2.93 Million. Although this is a slight decrease from 2007, I still believe that number is too high for an average salary. I have no problem with guys like A-Rod, Johan Santana, and CC Sabbathia getting contracts upwards of $100 Million. But the problem exists with contracts such as Geoff Jenkins ($13 Million/2Y), Marlon Anderson ($2.2 Million/Y), Kenny Rogers($8 Million/Y). Its killing the free agent market. If a career pinch hitter like Marlon Anderson gets $2.2 Million, then what is an all-star caliber Outfielder worth. Apparently about $100 Million (Torii Hunter).

My opinion on this subject is an unpopular one, but quite frankly I don't really care. As long as average players continue to get inflated contracts, my ticket prices will continue to rise. And in our current economy, thats something we cannot afford.

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