Major League Baseball Salaries and the Economic Effect Competition and the Consumer
As long has there has been business, Management and Labor have warred against each other for a bigger piece of the pie. Major League Baseball is no different. In the early years of professional baseball the owners controlled the salaries of the players and decided where they could play and what they would be paid. The players were bound to their team by the Reserve Clause that stated, the services of a player will be reserved exclusively for that team for the next season. This resulted in keeping the player’s salaries artificially low because the players were not allowed to offer their services to any other team. The Reserve Clause was in effect for more than One Hundred years of baseball history. It was challenged several times but the owners had won every time, until in 1970 when the St. Louis Cardinals traded outfielder Curt Flood to the Philadelphia Phillies. Flood refused to play for the Phillies and sued to become a free-agent. Flood’s case was in court for several years going all the way to the Supreme Court. He was never able to play in the Major League again. While he did not win his case, he laid the groundwork for a later case that involved two pitchers, Andy Messersmith and Dave McNally who filed a grievance against the league contending that, because they didn't sign contracts with their previous teams they were free agents. The owners and the Players Association agreed to submit to binding, impartial, arbitration in order to settle this case. On December 23, 1975 the arbitrator Peter Seitz ruled in favor of the players and the Reserve Clause was broken, and the era of free agency began in the Major Leagues. In 1976 when free agency began the average player salary was only $52 thousand dollars, but it has increased steadily ever since. By 1990 the average salary for a Major League Baseball player had risen to $589 thousand dollars. This Year baseball will start the 2001 season with an average player salary of more than $2 million, about 40 times higher than the typical wage in 1976 when free agency began.
Average Major League Player Salaries 1976-2000
Year Average Increase/decrease Median1976 $52,300 --- *1977 74,000 41.49% ...
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Do Major League Baseball teams with higher salaries win more frequently than other teams? Although many people believe that the larger payroll budgets win games, which point does vary, depending on the situation. "performances by individual players vary quite a bit from year to year, preventing owners from guaranteeing success on the field. Team spending is certainly a component in winning, but no team can buy a championship." (Bradbury). For some, it’s hard not to root for the lower paid teams. If the big money teams, like Goliath, are always supposed to win, it’s hard not cheer for David. This paper will discuss the effects of payroll budgets on the percentage of wins for the 30 Major League Baseball teams of 2007.
...t pool is not adequate to call up enough players to fill two new expansion teams, while maintaining the same level of play in all facets of the game. “The influx of inferior talent filling those new roster spots fundamentally altered the competitive environment: it allowed elite players, especially hitters, to excel” (Bradbury). Up to this point in time, the major league of baseball continued to populate the league with better-quality baseball players through the exploitation of rapid population growth, and racial integration. However, this growth trend was reversed through the implementation of expansion in 1990s. By filling the expansion teams with subpar talent in juxtaposition to the major leagues’ talent level, the dilution of player quality was felt throughout the entire league and throughout all phases of the game including, pitching, hitting, and defense.
For the last 30 years, the New York Yankees have been a dominant force in Major League Baseball. Other teams do not make as much money as the New York Yankees therefore they have less capital to spend on big name players. In 1994, the Major Leagues put the luxury tax into place. The idea was to tax a club’s payroll if the total payroll exceeded a certain limit. However, the Yankees seem to exceed this limit every year. The Yankees are a notable team not only for their impressive history on the field, but also for their financial situation. The Yankees owner spends more on player salaries than any other franchise in baseball. “As of 2004, the team payroll is more than $182 million, which is $51 million more than the second-highest team, the Boston Red Sox, and more than the six lowest-payroll teams combined” (Wikipedia Encyclopedia”). The millions of people who are associated with baseball in this country, many of whom had only a vague idea of what was happening, are now asking themselves whether or not the game is being played fairly. Even though teams like the New York Yankees are able to assemble top-notch teams by ignoring the spending limit, a salary cap is necessary to maintain the equal competitive nature of major leag...
However, if the current rules remain in place and baseball continues without a salary cap, the only hope a small market team may have is to fend for themselves on the big market with financially superior teams. This becomes an exceedingly harder task when one team can afford the salary of two top players while those contracts are equal to the entire payroll of another team’s entire roster. Therefore, the question remains should baseball implement a salary cap, and if they do, how would it come into play. When asking the question regarding the salary cap, four supporting ideas arise for either the implementation of a salary cap or keeping it nonexistent.
Under the protection of Major League Baseball’s (“MLB”) longtime antitrust exemption, Minor League Baseball (“MiLB”) has continuously redefined and reshaped itself according to Baseball’s overall needs. But while MLB salaries have increased dramatically since the MLB reserve clause was broken in 1975, the salaries of minor league players have not followed suit.
A salary cap gives all the teams an equal chance to sign players. It also keeps teams with a lot of money not able to acquire every all-star they want , or any player who is a free agent. Some Major League Baseball teams like the Anahiem Angels and the Atlanta Braves are owned by very wealthy people and companies. The Anaheim Angels are owned by Disney.(Worisnop, 128) So with no surprise the Angels can produce a team which can be very competitive, and have several all-star players. Just recently they exercised this advantage by signing Mo Vaughn for ninety million dollars over seven years.(Antonen, 2) There were at least four other teams that wanted to sign this all-star, but the Angels easily had the money, and outbid everyone who wanted to sign him. If there was a salary cap in Major League Baseball then the Angels would have thought twice about giving that much money to one player. With the its roster for one year. So giving one player 12.8 million dollars for one year does not really make sense if the salary cap is fifty million dollars a year. That would leave only 37.2 million dollars for the twenty-four other players, which equals each player getting on average a little less than one and a half million dollars a year.
What has changed the way America’s pastime is looked at forever and prompt worldwide discussion? Joe Jackson and his seven teammates changed the face of baseball forever during the intimate scandal of 1919. No other time in baseball history did Americans question the state of the game. Pete Rose had also brought a debate like no other before in baseball. Since his banishment in 1989 the country has been split on the issue. Gambling by these men and others has caused great problems in baseball. The game of baseball has been destroyed by gambling.
Right now in America, the world of sports is constantly changing and growing to make the sports safer and fairer. People want sports to be as exciting and thrilling as before, but without the human error that may turn some baseball fans away. Along with this fear, people also want every sport to be as fair as possible, and by doing this most sports have incorporated an instant replay rule. This spring will be the first that the review rule will be in effect, it is a radical decision and game changing because baseballs history is so rich and its structured has not been changed in so long. These changes are not without skepticism though because people believe that the game has been so successful and before being “fair” was not the biggest priority of the game. By adding this rule, baseball’s fairness will be protected in a way it was not previously, but this set of rules is not without skepticism by people who believe there is nothing wrong with the game now.
In terms of racial inequality in baseball there have been many eras of integration. Baseball originally is seen as America’s national game belonging to the white men of America. However, throughout history there have been steps taken in recognizing and integrating those groups deemed “less favorable” by the American community. These groups include German immigrants, Irish immigrants, African Americans, Latinos, Native Hawaiians, Native Americans, and Asians. America used the game of baseball as a tool to indoctrinate the American ideals and values of teamwork, working hard, and collaborating for the greater good into the cultures of the “uncivilized world.” These groups used baseball as a medium to gain acceptance into the American community as racially equal counterparts.
Many Dominicans dream to make it to the big leagues to break free from the inevitable poverty of their country. The road is long and requires many stops, such as training academies and the minor leagues, in order to reach Major League Baseball. While very few will reach the pinnacle, signing a contract with the training academies or minor leagues in itself provides a higher
When looking into the history of our culture, there are many subtopics that fall under the word, “history.” Topics such as arts and literature, food, and media fall into place. Among these topics reside sports. Since the beginning of time, sports have persisted as an activity intertwined with the daily life of people. Whether it is a pick-up game of football in the backyard, or catching an evening game at the local stadium, sports have become the national pastime. According to Marcus Jansen of the Sign Post, more specifically, baseball is America’s national pastime, competing with other sports (Jansen 1). Providing the entertainment that Americans pay top dollar for, live the role models, superstars, and celebrities that put on a jersey as their job. As said in an article by Lucas Reilly, Americans spend close to $25.4 billion dollars on professional sports (Reilly 4). The people that many children want to be when they grow up are not the firefighters or astronauts told about in bed time stories. These dream jobs or fantasies have become swinging a bat or tossing a football in front of millions of screaming fans. When asked why so many dream of having such job, the majority will respond with a salary related answer. In today’s day and age, the average athlete is paid more than our own president. The cold hard facts show that in professional sports, the circulation of money is endless. Certain teams in professional baseball and football are worth over millions of dollars. Consequently, the teams who are worth more are able to spend more. The issue that arises with this philosophy is virtually how much more? League managers, team owners and other sports officials have sought out a solution to the surfacing problem. Is it fair to let...
The problem with this is the inflation of players' salaries. When players are drafted young, they demand to be paid what they want; teams pay them millions right out of college.
The controversy of athletes being overpaid dates back to 1922, when well-known baseball player George “Babe” Ruth received $50,000 within the first year of his career. Ruth’s extensive wealth was bolstered by dozens of endorsements (Saperecom). As it is shown in figure 1, in the Fortunate 50 Tiger Woods takes the number one spot for highest paid athlete. Tiger’s salary for 2011 is $2,294,116 and like Babe Ruth, his endorsements exceed his salary earning $60,000,000 making his total $62,294,116 (Freedman). It’s crazy to think that 89 years ago professional athletes scarcely made more than the average person today. This is of course not counting the inflation that has occurred since the years which Babe Ruth played baseball.
"Money makes the world go 'round." Sports could not exist without the presence of money. You have high paid athletes asking for multi-million dollar contacts, while at the same time you have doctors not even making close to that amount. There are corporations buying out sports teams, buying stadiums, and buying everything that has to do with sports. Someone may ask why they do this. Sports are one of the most profitable industries in the world. Everyone wants to get their hand on a piece of the action. Those individuals and industries that spend hundreds of millions of dollars on these sports teams are hoping to make a profit, but it may be an indirect profit. It could be a profit for the sports club, or it could be a promotion for another organization (i.e. Rupert Murdoch, FOX). The economics involved with sports has drastically changed over the last ten years. In the United States, we spend about 13% of all money on sports and entertainment. Sports has obviously done its job; entertained and drained money out of our pockets.