January 22, 2013

Out of Left Field

Why You Should Quit Caring About Salaries

by Matthew Kory

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I’m o-l-d-e old so I can remember when players made a few million dollars a year. I’m talking good players. The best. It’s a pittance compared to what they make today. Dave Winfield once signed a 10-year, $23 million contract. A Hall of Fame outfielder signed for $2.3 million a year. Infuriating! Rage! No way he’s worth that! But I can’t remember a time when players’ salaries were not a public discussion point.

For roughly the last three decades, salaries have been published, debated, and outraged over. Information on player salaries is ubiquitous nowadays but, if you think about it, that’s pretty weird. Baseball players and professional athletes in general are some of the only non-municipal workers in the world whose salaries are public information. Most people’s salaries aren’t made public. Front office executives don’t have their salaries appear in the papers, except occasionally.*

* Our own meticulously maintained Cot’s Contracts lists the salaries of only two General Managers or Team Presidents, those of the Yankees and Cubs. Every other team has managed to keep the salaries of their GMs and Team Presidents private.

Everywhere I’ve ever worked my employers have actively discouraged my fellow employees and I from talking to each other about our salaries. I’ve always freely admitted my salary to others, mostly because I see silence on the issue as an unfair advantage for management. Put it this way: you can’t hire Ted for $30,000 a year to do the same job as Larry, who started at $45,000, unless Ted doesn’t know what Larry makes. So too with relief pitchers, sluggers, back-up catchers and the like. I suspect this is why baseball player’s salaries end up in newspapers and on websites. The information comes from the players and, more specifically, their agents in an attempt to do on a large scale what I once did over coffee breaks or in my cubicle. So I get that.

But what makes it especially odd is that, while publicizing salary information has at least helped to establish equal wages for equal work, fan’s knowledge of player salaries has turned that particular part of the game into our own little hate-fest. Not a day goes by without some columnist, commenter, talk-radio host, or caller complaining that a player is overpaid. Because players’ salaries are freely available information has accidentally opened up a vein of attack.

Like that metaphor, the public’s reaction itself is strange. Overpaid compared to what? Teachers? Well, sure. Firefighters? Absolutely. How about overpaid compared to what players made when Whiney Olderson was young? Of course. But that’s not how it works. If you want to change that, then you’re looking at altering our financial system. Calling a player overpaid compared to other current players is also odd because of the different tiers of compensation that exist, as a player in his second year of arbitration has vastly different earning power than a free agent, regardless of which player is better (or more valuable) on the field. Players get paid for what they do on the field, but also by seniority. The second gets lost sometimes.

Some part of the complaint stems from, I believe, jealousy. It’s easy to think, "I’m doing my job and I work hard and in my lifetime I’ll never see the money that [insert player here] makes in [small time frame] and all he does is play baseball." That’s true to a certain extent and I won’t attempt to justify the way we as a society have allocated value to different professions. I admit there are times when you hear about negotiations between a player and a team and they’re haggling over “a few million” and you just internally sigh because, well you know because.  

But most fans, most intelligent fans that do more than drink beer and scream at stuff (not that there is anything wrong with that) care because of the perceived impact that player salaries have on their team. We want our favorite teams to get the best players and spending dollars on one player means those dollars can’t be spent on another player. It’s true that acquiring players takes more than just money, but it definitely takes money. But here’s the thing: if you own a professional baseball team you can afford player salaries. Dave Winfield’s $2.3 million dollars a year seems quaint now. But more than that it seems antiquated. Do you think for a moment that the Red Sox or Dodgers couldn’t have paid Winfield $2.5 million a season back in 1980? I have no doubt that they could. But they didn’t. There are reasons for this, of course. Just because management can afford it doesn’t mean they should pay it (at least from their perspective). But no team is going broke because of player salaries now and none did, nor came particularly close, in 1980 either.

This leads me to question whether player salaries have the impact we think they do. Does signing Zack Greinke mean you can’t sign or trade for some other expensive player? I used to assume so but with the money in the game and three decades of history indicating otherwise, I’m not so sure. The Dodgers are testing this with assists from the Detroit “You know? Sure. I’ll sign Prince Fielder for $200 million. Say, are you going to finish those chips?” Tigers and the Washington “How many closers should a team have? Three? Sounds about right” Nationals.

Dave Winfield’s deal with the Yankees was for 10 years and $23 million, or so Winfield thought. As the story goes, Yankees owner George Steinbrenner thought the deal was for 10 years, $16 million. Now, $7 million over 10 years is a rounding error in baseball contracts. The Dodgers are paying Zack Greinke $147 million over six years. Would either team or player notice if an extra $4.2 million was taken off or added to that contract? I mean, that’s real money, more than most of us will ever see, but in the course of this contract it doesn’t really matter. But in 1980 it was important enough to warrant a decade-long hissy-fit on the part of Steinbrenner. Except, I wonder if it really was. I’m sure the context was important, but I wonder if the dollars really were.

At least today, player’ salaries are affordable for all teams. Player salaries continue to rise and that wouldn’t be the case if teams couldn’t pay them. Deals signed 10 years ago look silly cheap now, just as deals signed now will likely look silly cheap in 2023. Don’t you think the Royals or Pirates would love to acquire a player for the cost of what star players made in 2003?

As long as that continues—indefinitely as far as I can see—owners will try to hold the line on salaries and present their cheapness to fans as fiscal sanity. Whether it is or not is up to you to decide. For me, the older I get the less I care what players make. If they’re good, sign them. Three decades of baseball history says owners can afford it. 

Matthew Kory is an author of Baseball Prospectus. Follow @mattymatty2000
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