Nobody Has a Better Deal Than Major League Baseball Owners
By Ken Reed
There are still a lot of unsigned free agents in Major League Baseball as spring training nears its end.
I hear and read a lot of chatter about how greedy Major League Baseball players are. Some people say it will serve these unsigned free agents right if they get a much smaller contract than they were hoping for, or no contract at all.
Fans seem to have an especially big problem with the new contract Jose Altuve signed with the Houston Astros. Altuve inked a $163.5M contract for seven years earlier this week.
One fan wrote on social media:
“No insult to him, no one is worth that kind of money. Our society has priorities out of whack if that is what people are getting paid to play baseball.”
I’d agree that’s a crazy sum to play baseball. But how about the obscene profits the MLB owners are making while sitting in the owners’ suites sipping scotch and eating shrimp cocktails?
Baseball franchise owners’ revenues are skyrocketing, as are the values of the teams they own.
According to Statista, a statistics website:
Major League Baseball (MLB), with its 30 teams, generated around 9 billion U.S. dollars in total revenue in the 2016 season, almost twice the revenue generated ten years ago, when total revenue was at 5.5 billion U.S. dollars.
On average, each team generated almost 300.9 million U.S. dollars in revenue in 2016. The New York Yankees were the highest-earning team in Major League Baseball with 526 million U.S. dollars in revenue in 2016, while the Tampa Bay Rays were the team with the lowest earnings with revenues at around 205 million U.S. dollars.
On top of that, MLB franchise values are soaring:
Strong revenue growth has had a large impact on the valuation of MLB franchises. In 2017, the average franchise value was estimated at 1.54 billion U.S. dollars. The New York Yankees are the most valuable franchise with an estimated worth of 3.7 billion U.S. dollars, followed by the Los Angeles Dodgers with an estimated value of 2.75 billion U.S. dollars.
If someone bought a big league team 10 years ago, held it for a decade, and then sold it, they would walk away with a humongous profit.
There is no business better from an owner’s perspective than Major League Baseball. Congress has granted MLB and its owners a variety of benefits through the years, including an antitrust exemption. The result is a self-regulated cartel. There may be competition on the field but the owners, who claim to be diehard capitalists, benefit from a socialistic system.
As long as the owners are making obscene profits, players like Jose Altuve deserve their fair share of the pie.
Jim Bouton, the former New York Yankee, put it best when describing the owners’ situation a couple decades ago:
“Who’s got a better deal than baseball owners? You have no factories, no raw materials, no inventory and no technological obsolescence in a monopoly business that binds your employees to you for the first six years after they’re hired. The media give you free publicity, the taxpayers build the stadiums and the players provide the labor.”
Can’t put it any more succinctly than that …
— Ken Reed, Sports Policy Director, League of Fans
Sports Forum Podcast
Episode #30 – League of Fans’ Sports Forum podcast: The State of College Athletics with Dr. David Ridpath: Problems and Potential Solutions – Ridpath is a sports administration professor at Ohio University and a long-time member of The Drake Group, a college sports reform think tank.
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Episode #29 – League of Fans’ Sports Forum podcast: The Honorable Tom McMillen Visits League of Fans’ Sports Forum – McMillen is a former All-American basketball player, Olympian, Rhodes Scholar and U.S. Congressman. We discuss the state of college athletics today.
Episode #28 – League of Fans’ Sports Forum podcast: A Chat With Mano Watsa, a Leading Basketball and Life Educator – Watsa is President of PGC Basketball, the largest education basketball camp in the world. We discuss problems in youth sports today.
Episode #27 – League of Fans’ Sports Forum podcast: Kids’ Sports: How We Can Take Back the Game and Restore Quality Family Time In the Process – Linda Flanagan is author of “Take Back the Game: How Money and Mania Are Ruining Kids’ Sports and Why It Matters.” We discuss how commercialized and professionalized youth sports are hurting kids and their families.
Episode #26 – League of Fans’ Sports Forum podcast: How Can We Fix Youth Sports? – John O’Sullivan is Founder and CEO of Changing the Game Project and author of “Changing the Game: The Parents Guide to Raising Happy, High Performing Athletes and Giving Youth Sports Back to Our Kids.”
Episode #25 – League of Fans’ Sports Forum podcast: Physical Education Should Be a Critical Component of K-12 School Design – Michael Horn is co-founder of the Clayton Christensen Institute for Disruptive Innovation.
Media
"How We Can Save Sports" author Ken Reed appears on Fox & Friends to explain how there's "too much adult in youth sports."
Ken Reed appears on Mornings with Gail from KFKA Radio in Colorado to discuss bad parenting in youth athletics.
“Should College Athletes Be Paid?” Ken Reed on The Morning Show from Wisconsin Public Radio
Ken Reed appears on KGNU Community Radio in Colorado (at 02:30) to discuss equality in sports and Title IX.
Ken Reed appears on the Ralph Nader Radio Hour (at 38:35) to discuss his book The Sports Reformers: Working to Make the World of Sports a Better Place, and to talk about some current sports issues.
- Reed Appears on Ralph Nader Radio Hour League of Fans’ sports policy director, Ken Reed, Ralph Nader and the New York Times’ Tyler Kepner discussed a variety of sports issues on Nader’s radio show as well as Reed’s updated book, How We Can Save Sports: A Game Plan. Reed's book was released in paperback in February, and has a new introduction and several updated sections.
League of Fans is a sports reform project founded by Ralph Nader to fight for the higher principles of justice, fair play, equal opportunity and civil rights in sports; and to encourage safety and civic responsibility in sports industry and culture.
Vanderbilt Sport & Society - On The Ball with Andrew Maraniss with guest Ken Reed, Sports Policy Director for League of Fans and author of How We Can Save Sports: A Game Plan
Sports & Torts – Ken Reed, Sports Policy Director, League of Fans – at the American Museum of Tort Law
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