Earlier in 2019, the Colorado Rockies gave superstar third baseman Nolan Arenado a $260 million deal, the San Diego Padres landed Manny Machado with a $300 million contract, and Bryce Harper signed a 13-year, $330 million deal with the Philadelphia Phillies.
If you are a die-hard baseball fan, it is easy to lose perspective on just how massive these deals are. Trout’s $430 million deal alone is worth as much as or more than eight NHL franchises and all 23 Major League Soccer clubs, according to Forbes‘ valuations.
[/vc_column_text][/vc_column][/vc_row][vc_row equal_height=”yes” content_placement=”middle”][vc_column][vc_column_text]Trout is also leaps and bounds above the top-paid players in these other leagues.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]This raises the question: How can the baseball clubs afford these contracts, and more importantly, how can players from other leagues follow in the footsteps of baseball players?
Major League Baseball has historically been an industry leader when it comes to maximizing the value of its players, clubs and the overall product of the league. Even though the league is not the top revenue-producing league anymore, MLB is still more effective at running a business than any other league.
Sport League Revenue
RYAN LAKE
The NFL is the clear leader when it comes to total league revenue, but unlike the NFL Players Association, the MLB Players Association has been successful in giving players more access to the total revenue generated by the league.
The labor struggle pioneered by the MLBPA has provided rights to professional athletes in all of the major sports in the U.S. One of the most important achievements of the MLBPA is free agency. This was a long and challenging battle led by three-time All-Star Curt Flood in 1969. Flood’s pursuit of free agency went all the way to the Supreme Court.
In 1972, the Supreme Court held that while Flood should have had the right to choose where he would like to play, the only way players could receive free agency was either by an act of Congress or through the collective bargaining process. In 1976, MLB and the MLBPA agreed to amend the Collective Bargaining Agreement to allow players who have played for at least six seasons to become free agents — thus giving birth to modern-day free agency.
Today, every player in the four major sports in the United States enjoys a form of free agency. Without open competition for players, it would not be possible for Trout, Arenado, Machado and Harper to sign such massive deals.
The MLBPA has also been able to obtain fully guaranteed contracts, something the players in the NFL have not been able to secure. NHL and NBA players have also fought for and won fully guaranteed contracts. For more on the NFL’s lack of guaranteed contracts, read my article “Why NFL Players Need A Rookie To Be A Hero To Make Everyone’s Contract Better.”
Another key to achieving massive guaranteed contracts for players is the lack of a salary cap. The NHL, NBA and NFL all have a hard or soft cap. These caps limit either how much an individual player can be paid or how much a club is allowed to spend on the entire roster. In the case of the NHL, the cap places limitations on both how much any individual player can make and the total salary of the active roster. Although MLB does have a luxury tax, this has not proved to be much of a deterrent when it comes to paying the top players in the sport.
The lack of a hard or soft cap is again a credit to the hard work of the MLBPA, and something the other unions should strive for.
While MLB and the MLBPA certainly have room for improvement to ensure every player is fairly compensated, the MBLPA has clearly done more for its players than any other union in North American sports. The sheer size of the contracts signed this winter is just the latest evidence of the benefits of having a strong union.[/vc_column_text][/vc_column][/vc_row]