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Inflation?

I'm posting this strictly for discussion, and I'm hoping someone will help with the research on this.  It's something I've been thinking about a lot lately with the economy as bad as it is right now.  I was hoping we could look at baseball salaries and how much they have increased over the past 15 years and what the projections are for the next 5-10 years.

Before I get started, let me say this is not an attempt to say that anyone deserves more or less money, though I may use some hypothetical examples. 

There is a lot of talk about Soriano's contract being worth way too much and way too long.  My question is, how much will it actually be worth towards the end of it?  The AL could be paying 16M for a DH by then, and then we have a great trade!  Or, we could be stuck with a guy who can't run and strikes out a lot (Sammy Sosa?). 

I remember a few years ago when we failed to sign Carlos Beltran, and the newspapers were outraged that he left 15M on the table.  That seems like the starting block for most "stars" now. 

So, does anyone want to figure out any of the salary stats and how much inflation has gone on in baseball?  When you watch the games, you hear a lot about how the smaller market teams "only spent this much" as opposed to the bigger market teams such as NY and Chicago.  I'm guessing that 150M will be common for most of the teams in the very near future.

Again, this was in no way to say we need to spend more or that's how you win.  I think it's a mixture of everything, I'm just hoping someone will help with the research.  Thanks!

This is a FanPost and does not necessarily reflect the views of SB Nation or Al Yellon, managing editor (unless it's a FanPost posted by Al). FanPost opinions are valued expressions of opinion by passionate and knowledgeable baseball fans.

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Fair points...

I for one never really care about how much we pay one guy unless it affects whether we can pay another guy.

I really don’t believe Soriano’s contract is the reason we can’t re-sign Wood, or Dempster, or whoever we want. We’re not the Pirates, after all.

Face it, we’re closer in spirit to the Yankees and Red Sox than the Rays or Marlins.

The worst beer I had was pretty good.

by Worf on Oct 7, 2008 9:01 AM CDT reply actions   0 recs

People frequently say the Cubs are

a large market team with deep pockets. I have always argued that they are a big market team with pocketbook constraints of a lesser team.

By being a subsidiary of a large corporation and forced to televise and broadcast on the corporate owned channels of WGN TV & Radio, the Team has not had the benefit of the big broadcasting deals that fund the Red Sox and Yankees. This revenue benefits the publicly traded corporation and not the ball club.

My hope with new ownership is to become a true large market team and eliminate the constraints on the TV/Radio deals and allow the team to generate cash to spend on the field.

But the wind blew me back via Chicago, In the middle of the night

by N Oakley on Oct 7, 2008 9:05 AM CDT up reply actions   0 recs

I don't buy that for a second

Soriano, Lilly, Dome, DeRosa, the re-signing of Zambrano and A-Ram, the likely re-signing of Wood and Dempster is not the work of a small-market team.

The GMs of the Pirates, Reds, Royals and even the Cardinals would love to have the “constraints” that Hendry has.

I don’t say that as an insult to the Cubs. I couldn’t possibly care less if the payroll went to $500 million.

I’m saying I don’t get all twitchy about Soriano’s contract. I don’t care what he makes. I care what he hits.

The worst beer I had was pretty good.

by Worf on Oct 7, 2008 9:08 AM CDT up reply actions   0 recs

I'm not sure inflation is the right word here.

The fact is that baseball’s revenues have grown at an extraordinary rate in the last 10 years, and consequently so have the salaries.

However, even with the growth in player salaries, team revenue still dwarfs the current players’ salaries by a disproportionate amount – in baseball only 45% of the sport’s revenue goes back to the players, versus guaranteed* (via each sport’s salary caps) shared revenues of 55-58% in the NHL, NBA, and NFL.

At the current rate of growth, Soriano’s salary won’t seem so bad by the end of it. Just remember how a few years ago the Red Sox were literally offering Manny to anyone who would take him because that $20M / year contract seemed so burdensome. By the end of it, even those club option years looked like reasonable options. I can’t find the post now, but someone did a calculation based on current rates of salary growth that suggested Soriano will cost the current equivalent of an $8 / year outfielder by the end of his contract. I could be remembering the exact number wrong however.

As to why have they have grown so much in the last couple of years, JC Bradbury suggests that there may be less collusion going on among owners than there has been in years past.

by Wreckard on Oct 7, 2008 10:22 AM CDT reply actions   0 recs

I was looking at something similar the other day

as I like to mess around with Excel sometimes and came up with some comparisons. I took the data in 5 year chunks. 2008, 2003, 1998, 1993, 1988. Here’s a breakdown of what I gathered:

Average Team Payrolls
1988 – $11.3M
1993 – $30.6M
1998 – $40.3M
2003 – $70.9M
2008 – $88.9M

Five Year Increase
‘88-’93 – 169.8%
‘93-’98 – 31.9%
‘98-’03 – 75.8%
‘03-’08 – 25.3%

Just some other notes:

  • The first time a player made more than an entire team was 1997 – Albert Belle $10M vs Pirates $9.1M
  • Team spending is relatively even as the number of teams spending more than the average were in order 14/26, 15/28, and 15,15, and 14 of 30.
  • The Yankees currently aren’t any more free spending than other teams, though they may have been the first to take advantage. Without the Yankees salaries still increased 24.6% from 2003 vs 25.3% with them. However from ‘98-’03 without the Yankees, salaries increased 68.9% vs 75.8 with them.
  • The disparity between the absolute top and bottom has widened, but again, the current Yankees skew everything. In ’88 the Yankees spent 3.2x as much as the White Sox, in ’93 the Blue Jays spent 5.2x as much as the expansion Rockies, in ’98 the Orioles spent 7.7x as much as the Expos, in ’03 the Yankees spent 7.8x as much as the Rays, and in ’08 the Yankees spent 9.1x as much as the Marlins.
  • If you take the Yankees out the past two calculations, the Mets in both ’03 and ’08 spent 6.1x and 6.0x as much as the Rays and Marlins respectively.

by CubFan81 on Oct 7, 2008 11:38 AM CDT reply actions   0 recs

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