Stop being surprised. It has been happening for years, and the end is nowhere in sight.
Whether you think it is bad or good, the level of care from the payers and the payees is virtually nonexistent. There will always be a market, and there will always be someone willing to meet the price.
Giancarlo Stanton’s 13-year, $325 million contract with the Miami Marlins and owner Jeffrey Loria is more proof that Major League Baseball’s spending habits will not stop. To call this latest deal exorbitant is inaccurate, simply because it is right in line with what MLB teams have been doing since the start of this latest millennium.
MLB loot is nothing new. Baseball owns 21 of top 22 richest contracts in sports history. Boxer Floyd Mayweather ($180 mil) on list at 12.
— Rob Parker (@RobParkerLocal4) November 18, 2014
Regardless of how those contracts have played out, are playing out or will play out, they won’t stop coming. From Kevin Brown in 1999 to Alex Rodriguez in 2001 (and 2008) to Albert Pujols in 2012 to Clayton Kershaw in 2014 to Giancarlo Stanton now, baseball players snatch the largest and longest contracts in North American sports.
And just when we think we have seen the pinnacle of these kinds of deals, someone reaches a new level. That is likely to happen again since Stanton’s deal is likely to set the bar for guys like Mike Trout and Bryce Harper. Trout is the best player in baseball and was just named the American League’s unanimous MVP, making it entirely likely that his next mega-contract will trump Stanton’s—inflation in 2020 could help. Harper is younger than Trout and Stanton and has Scott Boras as his agent, again making it possible that he can at least match Stanton’s level of financial security.
It is no accident that baseball is the sport that keeps setting the mark for richest athletes. Despite the completely false insinuations that the game is dying in this country, owners continue handing out nine-figure contracts and television companies contribute billions to franchise revenues. Those television contracts, coming in an era where live sports coverage is valued more than ever, can transform teams with dwindling payrolls into big spenders overnight.
As these contracts are locked in, it brings an annual glut of “baseball needs a salary cap” disgust. MLB is the only one of the four major North American sports leagues—we are counting baseball, the NFL, NBA and NHL here—without a salary cap, and that is because it does not need one. Competitive balance in baseball is just fine—the Kansas City Royals just came within a game of winning the World Series—and a hard salary cap does not ensure a league will have it anyway.
Not only is the argument’s premise wrong, but also a salary ceiling is just never going to happen. People should stop wasting time, keystrokes and breath on lobbying for an MLB salary cap. The players have the strongest union in sports and maybe the world, and even the owners have stopped harping about a cap. Once that happens, you know it’s a futile point because the entire purpose of salary cap is to help line ownership’s pockets.
Complaining about baseball not capping payroll is the same as fighting for the richest people in the sport to get more money. It’s not like that unspent revenue will go to lowering ticket prices or merchandise.
What could curb the spending is seeing some of the more recent contracts play out badly, which is almost a certainty. Looking at what Pujols and Miguel Cabrera do from here until the end of their deals—Pujols has seven years remaining, Cabrera has eight—could scare teams into not handing out such massive contracts to players on the evil side of 30.
Big deals still will come in the way Stanton’s just did, where teams sign a player well before he hits free agency and while he is still in his mid-20s. This kind of deal makes more sense than waiting for a player to become a free agent at 29 or 30 and then handing him nine figures and seven to 10 years.
Not that teams have to give out those deals.
The way baseball’s pay system works is a player needs more than three years of service time before he can become arbitration eligible. This keeps costs down, even for elite players as it became common knowledge two springs ago when the Los Angeles Angels were paying Trout $510,000 for the 2013 season. He still made only $1 million this year, which is way cheap relative to the market.
Even after those first three years, elite players still come at a low cost because they can’t hit free agency until they have six years of service time. That means for six years, a team can have a top-flight player for well below market value and through many of his prime years.
That isn’t the best way for teams to keep those stars, though. Rather than running the risk of upsetting the player to the point where he won’t re-sign with that club after six seasons, teams are willing to sign those players to contracts that are under market value. Again, Trout is a fine example as he signed a six-year, $144.5 million contract last March.
This benefits the player because it gives him guaranteed financial security. This benefits the team because it gives it cost certainty and the player at less than what an open market would dictate.
Unlike the NFL or NBA, MLB has the only true open market when it comes to free agency. There are no “max contracts” or caps, meaning teams can give a player any amount of money, and the only penalty for high spending is a “competitive balance tax” that rich teams have no problem paying. That means the highest bidder can win the player, and the highest bid has no ceiling, giving us another reason why baseball’s wild spending has no reason to end.
Owners will continue giving out contracts the general public dubs as “absurd,” and players will happily sign them even if circumstances are less than ideal, as B/R’s Scott Miller documented Monday. While TV money floods in and a salary-cap debate continues to not exist, there will be money to spend.
So if you haven’t done so yet, get accustomed to more deals like Stanton’s coming down the chute. Baseball’s reality is it can afford these contracts and will continue to do so for the foreseeable future regardless of risk.
Anthony Witrado covers Major League Baseball for Bleacher Report. He spent the previous three seasons as the national baseball columnist at Sporting News, and four years before that as the Brewers beat writer for the Milwaukee Journal Sentinel. Follow Anthony on Twitter @awitrado and talk baseball here.
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