Pricing themselves out of the market?

March 4, 2016 · Posted in Business and industry, Delmarva Shorebirds, Sports 

Class envy comes once again to the sports world.

I was perusing my browser when I came upon an article from AP writer Paul Newberry, one which whines about baseball sending the wrong message to its fans. This is a good example of its tone:

Given that many struggling Americans haven’t had a raise in years, their frustration epitomized by a tumultuous presidential race, perhaps it wasn’t the best time for (MLB player Yoenis) Cespedes to arrive at New York Mets camp in a different ride six days in a row.

The flashy outfielder pulled up in a Ford F-250, Lamborghini Aventador, Alfa Romeo 8C Competizione, Jeep Wrangler and a pair of Polaris Slingshot three-wheel motorcycles — all of them customized to the tune of about $80,000. Of course, that’s a pittance compared to the cost of the actual vehicles, with the Lamborghini alone going for more than $300,000.

Cespedes signed a three-year deal over the winter for $75 million, so he has the coin to spend on these cars. Yes, to most it would seem excessive to have so many cars but then how many people make $25 million a year to play a game? This is nothing new: back in the early days of the Depression, Babe Ruth held out for a contract that exceeded the amount President Hoover was paid at the time. His reasoning? “I had a better year than he did.”

The point is that these athletes are participating in a relatively free market, so the owners of the teams are willing to pay $25 million a year or more to the most elite players, those who have played long enough to earn the right to be free agents. (By comparison, the Orioles’ Manny Machado had an outstanding season last year for the bargain basement price of $548,ooo. This season he will make a cool $5 million, and that will likely increase again next year when he becomes arbitration-eligible. Machado can become a free agent after the 2019 season.)

Perhaps it’s a function of having the most games in a season (and most opportunities to create revenue) but baseball is still a cheap ticket in comparison to other sports. The average ticket price for MLB runs about $30, but one can go to anywhere between 4 and 14 MLB games for the price of one average NFL ticket.

Nor does this consider the plethora of minor league teams out there, where the average ticket price may be less than $10 a pop. That’s still more than you’ll pay to see a AP writer bang out a column complaining about how much pro baseball players make.

You see, when people complain about how much money others earn – particularly when they do these comparisons of how much CEOs make compared to workers on the assembly line or checkout lane – they fail to comprehend the skill level and hard work required to be that successful. In the case of pro sports players, there is also the relatively brief length of career to consider. (Some players have accounted for this – for example, Chris Davis of the Orioles will have $42 million of the $161 million he signed for in a seven-season deal deferred over 15 years after the playing contract expires. Davis turns 30 later this month, so he will be paid under this contract until he is 51 years old.)

Similarly, there is only one CEO of a company and perhaps just a few thousand individuals who have the talent and experience to perform the tasks required. On the other hand, the job description of most of those on the low end of the pay scale is generally unskilled or semi-skilled. Granted, some of these tasks require a good face to the public but in general they aren’t adding a tremendous amount to the bottom line on an individual basis.

So pardon me if I think the writer is a whiner. If you don’t want to watch a baseball game, don’t go. But you’ll find me at my Shorebird games, which are still really affordable.

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