Analysis. History. Perspective.

Sports Then and Now




Baseball Salaries Through the Years

Posted on August 15, 2014 by Felix Senett

 

Salaries in baseball, as in all sports, has exploded over the last 30 years.

Salaries in baseball, as in all sports, has exploded over the last 30 years.

Baseball as with other major sports in the US, has seen a huge rise in salaries over the last 100 years. This may come as no surprise to most, as you would expect salaries to rise with inflation, but sports stars’ salaries has risen far beyond this.

One man has conducted a study into these salaries over the years, with interesting conclusions. Professor Michael Haupert, who is the professor of economics at Wisconsin La Crosse, found some interesting patterns and trends, but the most surprising thing seems to be the lack of full data available to great a comprehensive report.

Despite financial information being more freely and readily available, there still seems to be a lack of recorded salaries on file for a lot of major league players. Hauperts study takes into account only 50% of players who have played at least one major league baseball game since 1874.

The study only takes into account actual salary details, excluding any bonuses. Even without taking any additional bonus earnings into account, it’s clear to see from Haupert’s study that earnings have increased exponentially since 1874.

The highest salary recorded for a player at time was $2,000. Of course this was still a large salary almost 150 years ago, but when compared with inflation, it works out as an annual salary of just over $41,000. This is a fairly modest earning for anyone, never mind top players today, like Alex Rodriguez who earned a whopping $29 million in 2013. Alex Rodriguez’ last annual salary would have been worth over $1 million in 1874 – a far cry from Fergus Malone’s salary at the time. In essence, Alex Rodriguez earned more per plate – $56,000 this year – than Malone did all year in 1874 (with calculated inflation).

Even Joe Dimaggio’s huge 1949 earnings of $100,000 is still worth under $1 million in today’s money. This means that even in the last 60 years, the salaries of major league baseball players has multiplied by over 300%. This is a huge rise not seen in any other profession outside of major league sports.

Alex Rodriguez signed the largest contract in baseball history in 2001 (and again in 2007).

Alex Rodriguez signed the largest contract in baseball history in 2001 (and again in 2007).

Part of the exponential rise in earnings has come from the opening of the market and the end of the reserve clause, pushing up the bids for players and allowing them the opportunity to move between clubs more freely. The main reason for the rise however can be attributed to huge deals clubs now get in terms of sponsorship and revenues from broadcast deals. For example the Los Angeles Angels signed Albert Pujols just before the start of the 2012 season, with a 10 year contract worth $240 million. This value is almost exactly identical to the sum the club was due from a recently negotiated cable television package. This is of course a very straightforward example, with all of the deal amount going to one player, rather than spread across a few players or used to push up a whole clubs salary, which is the most commons outcome of these deals.

Whilst we all dream of one day earning so much, with this salary you can’t let yourself play on bingo sites. It wouldn’t be practical and you probably wouldn’t have the time to play, with such a demanding training schedule. Not only that but with so many other things to fill your time and spend your money on, you’d be better off accomplishing some of those things first, as you don’t want to get addicted to the game for many reasons!


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