In MLBPA Lockout, Who's Advocating for the Fans?
Major League Baseball players earn an average of $4.2 million dollars per year, while team owners covet $2 billion valuations of their teams. In 2022, these two groups are butting heads over terms around player pay, a dispute that has threatened to delay the season.
Over the last few years, largely via Twitter, podcasts, and interviews, the players have expertly convinced many in the public to carry water for their side in the saga of public sentiment around the dispute. Thus frames the narrative of baseball's current predicament. But the issues at stake are not cut and dry.
To shed some light on these issues, as part of Capital Frontiers' research for our past story, The New Corporate Art of the Baseball Stadium, we unearthed several compelling statistics about baseball's money game.
In terms of the players...
MLB players make a lot of money:
Major League Baseball players earn an average of $4.2 million per year. This figure is less than the average NBA salary, but higher than average salaries in the NFL and the NHL.
Major League Baseball players average 2.5 years in the league, more than in the NFL but less than NHL or NBA players.
The average Major League Baseball player earns 122 times what the average American citizen earns in a year.
In short...it's best to be an NBA player, great to be an MLB player, less great to be an NFL player, and really not great to be an ordinary American citizen, who cannot remotely relate to the salaries of any of these athletes.
Far from shrinking, player salaries have grown astronomically:
One of the popular talking points used by players as they seek to convince the public that they are being slighted is that player salaries have decreased in recent years.
According to an AP report, player salaries have declined about 4 percent since 2016.
However, player salaries have grown around 300% since 1990, adjusted for inflation, and 2500 percent since 1960, also adjusted for inflation.
In 1960, players on average made only the modern equivalent of $85,000 on average, less than 3% of the game’s current median salary.
In short...Insinuations that salaries have declined are disingenuous misrepresentations of the broader trend. It’s hard to believe in the modern context that the players of yesteryear were paid like ordinary human beings. Today we take as a given that players earn salaries stratospherically greater than those that ordinary office workers make.
In terms of the owners...
Baseball teams are still worth a lot of money:
Major League Baseball teams are worth an average of around $2 billion.
Compared to 1990, revenues for the major league game have grown nearly 400 percent. Despite a popular narrative that baseball is on the decline, baseball today is more lucrative than it has ever been.
But, baseball teams have lost value compared to teams in other sports:
Relative to teams in other sports, Major League Baseball teams are losing value. Major League Baseball teams used to be the most valuable of all professional sports franchises, but today are worth much less than NFL franchises, slightly less than NBA franchises, and more than NHL franchises. NFL franchises are worth an average of $2.9 billion, NBA teams are worth an average of $2.2 billion, NHL teams are worth an average of $667 million, and MLS teams are worth an average of $312 million.
Major League Baseball team valuations are growing at a slower rate, around 4 percent, than those of all other major sports.
The slow growth means has affected team valuations, which are lower relative to revenues than those in the NBA, NFL, or MLS. Major League Baseball teams are valued at around 6 times annual revenues. In comparison, NHL teams are valued at around 4 times annual revenues, NFL teams are valued at around 6.3 times annual revenues, NBA teams are valued at around 7.3 times annual revenues, and MLS teams are valued at around 9 times annual revenues.
Major League Baseball team profits are around half of those in the NFL, and less than in the NBA, but still around double the profits of NHL teams. MLS teams generally do not make a profit.
The costs of ownership have increased. Stadiums today cost double what they did in 1990, even adjusted for inflation.
In short...With profits of around 2 to 3 percent per year, and valuation increases of around 4 percent, owning a Major League Baseball team earns owners less money, dollar for dollar, than they would earn if they instead invested that money in the S&P 500.
In terms of the fans...
Baseball's popularity problem is perhaps a bit overblown:
Contrary to perception, Major League Baseball attendance has grown broadly over time. Attendance today is slightly lower than it was a decade ago, but is around 10 percent higher now than it was in 1990, and around 300% higher than it was in 1960.
As we wrote in our previous piece... "Compared to the baseball of 30 years ago, the game today is a bigger ordeal – for cities, for teams, and for families paying to attend a game. In 1960, often highlighted as one of baseball’s golden eras, attendance was only 11,000 viewers per game, 38% of what it is today."
But, while the players and owners make money, the fans are being squeezed:
The prices of tickets and concessions have doubled since 1990, even adjusted for inflation.
As we wrote in our previous piece... "while it might be considered admirable that in 60 years ticket prices have only doubled while player salaries have grown 25-fold (TV deals have made up most of the difference), even a modest doubling means that baseball today is less accessible to the average fan. To many fans, the price of going to the ballpark today is prohibitive and feels like a fleecing. To teams and cities responsible for paying the large sums that fund ever-higher player salaries and increasing stadium costs, the amounts are quickly becoming inexcusable and indefensible, especially as the rising price to attend a game, and the accompanying exclusivity of the sport, has made it more difficult to argue that the sport itself is a public asset."
In short...Amid all the bickering between players and owners, the reality is both are better off today than they were 30 years ago. But fans aren't. While team valuations have increased and player salaries have soared, fans are paying twice as much to attend games today as they did three decades ago. But neither group is advocating for fan interests, and the fact that it's more difficult and expensive for fans to attend games today will hurt the long-term prospects of the sport to survive.
Our word of advice to the fans...Stop carrying water for the players or the owners so long as the interests of both are harming the interests of the fans. The players aren't carrying water for you, so stop doing it for them.
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