When it comes to North American sports, baseball is treated as a cultural pastime. Though the MLB spans both Canada and the US, it’s considered particularly American in the same sense hockey is decidedly Canadian. Both have storied histories that are relevant to fans today.
But baseball doesn’t compare with other major sports like hockey, football, basketball, and soccer. It’s slower, requiring players to put out high levels of concentration for a longer stretch of time. A single lapse can cost a team the game.
Despite baseball’s emphasis on technical skill, the sport has just as many fans as its high-octane counterparts. According to Statista, baseball fans are a bit older, with only 14% of participants between ages 18-34 claiming to be avid fans. But unlike other leagues, over half the population interview claimed to be at least a casual fan.
Despite baseball’s older and generally less engaged fan base, the league still sells out stadiums. Sportsbooks cover MLB betting odds throughout the year, including the offseason, while formal and informal fantasy leagues continue to be hugely popular.
Clearly, the MLB has a winning formula… but many sports fans are surprised to learn just how lucrative that model is—especially given the sport’s casual fanbase. According to Forbes, the New York Yankees are the world’s second-richest sports team with a value of $5.25 billion, beating out powerhouses like Spain’s Real Madrid and Barcelona franchises.
Recently, big names like Mike Trout and Gerrit Cole made headlines for their jaw-dropping contracts, worth $426 million and $324 million, respectively. Sure, everyone knows the hotdogs at the baseball stadium are a rip-off, but just how exactly can the MLB afford these salaries?
A Look at League Earnings
For the 2019-20 season, the NBA posted the largest average annual salary for its players at $8.32 million. Close behind was the Indian Premier League ($5.3), followed by the MLB ($4.03). In fourth and fifth place came the English Premier League and the NFL, according to Statista.
These figures can be a bit misrepresentative. The NBA has a higher average because players are valued higher because rosters are small. Other leagues, like the IPL and NFL, have much larger rosters with high salaries concentrated on a few star players. Though less extreme, the same goes for the Premier League.
Those who follow the money will find it leads back to league policy. Organizations implement salary caps and expenditure ‘taxes’ in order to keep the playing field more level. For example, a team in a major city like New York will earn more from broadcasting deals than those from smaller areas like St. Louis.
A league imposes a salary cap to prevent teams from hoarding resources and elite players with their deeper pockets. The NBA has a cap of $112 million, while the NFL has a cap of over $208 for the coming season. But, similar to the English Premier League, there’s no salary cap for the MLB.
A Strong Union… and no Ceiling
Teams like the Angels and the Yankees, who signed Trout and Cole, respectively, can shell out hundreds of millions without violating league policy. However, there are a few conditions, which include three tiers of ‘luxury taxes’ on teams that spend more than $230 million in a year.
With teams earning millions, if not billions, each year, many franchises are happy to foot the bill. However, it’s the MLB’s killer player union that’s to thank for the league’s high salaries. Marvin Miller, director of the MLBPA, was a pivotal figure in keeping salary caps out of the MLB. Under his guidance, Miller created a minimum wage while preventing a cap.
He also fought for contract rights, which means MLB teams are motivated to keep players onboard rather than cut them loose (as is common in the NFL and NBA). In the case of baseball, this makes sense. Though a team sport, elite athletes often make tangible differences each inning, which directly correlates to their salary and contract.