In 1930 Babe Ruth was demanding a yearly salary of $80,000 from the New York Yankees, by far the highest ever in Major League Baseball at the time. When a reporter objected that Ruth’s demand was more than that of U. S. President Herbert Hoover’s ($75,000), Ruth replied, “I know, but I had a better year than Hoover.”
Ruth’s salary seemed exorbitant, but then ne never met Clayton Kershaw, current pitcher of the Los Angeles Dodgers who leads all major-league players with an annual salary of $33M. As a contrast to the huge difference, Ruth’s $80K salary would be equivalent to $1.1M today. Admittedly, the economics of the game are much different today where free agency and a market-based system have led to what seem to be outrageous salaries.
USA Today Sports Weekly recently published its report of Major League Baseball’s 2017 salaries for the active 25-man rosters of each team. It shows that the minimum salary amount for major-league players is $535,000, while the average salary for all players in 2017 is $4.47M. Of all the current gripes about the state of baseball, player salaries aren’t one of them, certainly not by the players themselves.
Kershaw and all of the current major-league players owe the current salary situation to a former player named Curt Flood, who challenged the MLB’s reserve clause system in 1970 that eventually led to free agency for players after their contract term ended.
Pitcher Andy Messersmith is credited with signing baseball’s first free-agent contract after the 1975 season, when he inked a three-year $1M deal with the Atlanta Braves after the Los Angeles Dodgers refused to give him a no-trade clause for the 1975 season. Prior to Messersmith’s landmark contract, baseball salaries were relatively paltry compared to today’s standards.
In 1980 Nolan Ryan became the first $1M per year player. That set off a rash of multi-million dollar player contracts, with each one outdoing the previous signings, and it continues today. Miami’s Giancarlo Stanton signed the richest contract in baseball history, $325M over 13 years.
The salary report shows that the Los Angeles Dodgers are now what the Yankees used to be in terms of total team payroll. The Dodgers’ ownership has deep pockets and are shelling out $187M in 2017. Yankees GM Brian Cashman has been on a mission during the past few years to curb team payroll, but his team is still within the top eight teams with a team payroll of $170M. However, this is significantly less than the $200M the team had been accustomed to spending.
The Dodgers are still waiting for the results of their big payouts, since they have finished in first place in their division for the past four seasons, but have yet to bring home National League pennants or World Series titles.
The San Diego Padres bring up the rear with a team payroll of $34.5M, only slightly ahead of Dodgers pitcher Clayton Kershaw’s $33M by himself. However, because baseball salaries are guaranteed, the Padres are paying more for players that aren’t on their current roster than their entire current 25-man roster, as a result of a spending spree by the Padres in 2015 that turned sour. James Shields and Melvin Upton Jr. were among players acquired in multi-year deals by the Padres prior to the 2015 season, but were dealt away after playing only a partial season with the Padres in 2016. Without a winning team on the horizon for the next few years, the Padres ownership has significantly scaled back how much they are willing to spend.
Average player salaries by teams are led by the Tigers ($6.9M), Giants ($6.3M), Cubs ($6.5M), Nationals ($6.3), Yankees ($6.3M), and Dodgers ($6M). All of these teams expect to be in the playoff hunt and contenders for a league pennant. By contrast, the Padres ($1.1M), Rays ($2.2M), A’s ($2.4M), Brewers ($2.3M), and Reds ($2.7M) have low probabilities of reaching the playoffs in 2017. The situation demonstrates that teams are shelling out the big bucks to significantly improve their chances to be competitive each year.
Besides Kershaw, other top-salaried players are pitchers Zack Greinke ($31.9M), David Price ($30M), and Justin Verlander ($28M), while first baseman Miguel Cabrera commands $28M. They are considered the critical components of their respective team’s success.
On the other hand, outfielder Jason Heyward, acquired by the Chicago Cubs in 2016 at an annual salary of $26M, was vastly overpaid for what he contributed to their World Series championship. He was actually benched at times by manager Joe Maddon during the playoffs because of his inability to hit. That’s a pretty steep pay for a bench-warmer. When you consider that his teammate Kris Bryant, the National League MVP last year, made only $1.05M, the Cubs didn’t get a positive return on their investment in Heyward. This just goes to show that winning covers up for a lot of mistakes.
Albert Pujols, CC Sabathia, Joe Mauer, Prince Fielder, and Jayson Werth signed long-term, big-dollar deals years ago that are still strapping those teams after their prime years have passed. Looking back, the soundness of these investments have been debated many times. For example, Mauer ($23M in 2017), a former three-time batting champ, last had more than 66 RBI in 2012.
However, not all teams are making those mistakes. As an example, the St. Louis Cardinals refused to extend Pujols’ contract with a long-term deal after the 2011 season. Pujols wound up signing a 10-year contract with the Angels. The Cardinals were heavily criticized because Pujols was the best player in the game back then. Now the Angels are being criticized for having to continue to keep Pujols, who has suffered through several injury-plagued seasons.
After last season, the Toronto Blue Jays decided not to offer 36-year-old hitting star Jose Bautista a multi-year extension, fearing a future situation like Pujols or Werth’s deal with the Washington Nationals. Bautista wound up having to settle for a one-year $19M deal with the Blue Jays for 2017, when he didn’t attract multi-year offers from other teams.
Just a few years ago, the Houston Astros were where the Padres are now, holding salaries dramatically low while re-building its team. However, the Astros’ younger players delivered ahead of schedule with a playoff appearance in 2015. And now the Astros need veteran help to augment the youngsters and consequently are paying $46M this year, increasing their annual payroll by almost 50%, for veterans Carlos Beltran, Brian McCann and Josh Reddick who were acquired over the winter. The Astros figure their window of opportunity to get to a World Series is immediate and are now willing to pay handsomely for the additional help.
Teams in the middle of the team salary pack, who are relatively efficient with their dollars, include the Cleveland Indians, Houston Astros, Pittsburgh Pirates, and Kansas City Royals. These mostly small-market teams have payrolls in the $94M to $132M range and have reasonable expectations of reaching the playoffs, particularly the Indians who narrowly missed defeating the Cubs in the World Series last year.
The Pirates will face the situation of having to shell out a huge sum of money after this season to retain their player who has become the face of the franchise, Andrew McCutchen. He’s presently a bargain at $14M in his final year of his contract. The Pirates actually shopped him around to other teams over the winter in the hopes of obtaining some top young talent in return, but a deal never happened. However, the 30-year-old star will likely be put on the market again during this season if the Pirates are out of playoff contention early.
McCutchen is indeed worthy of the money he will command, as he has been one of the best all-around players in the game. But to illustrate the irrationality of some of the other salaries being shelled out for players not nearly as talented, there is Chris Davis of the Baltimore Orioles. Because the O’s put top value on the home run hitting prowess of Davis, he is their top paid player at $21.2M. Yet nearly half of his plate appearances last year resulted in a strikeout (leading the league with 219) or a walk. Even if Davis slams 40 home runs this year, it will be at a rate of over $500K per homer. That’s pretty steep.
Miguel Montero is making $14M this year with the Chicago Cubs. He lost his starting job last year to the younger Willson Contreras, who became one of the new stars of the Cubs. Under the first full year of his contract, Contreras will make a little above the minimum MLB salary this year.
The Astros’ Yulieski Gurriel will earn $14M this year after playing only 51 professional games in the United States last year. A defector from Cuba in early 2016, the 33-year-old he had been an elite player in his home country. The Astros were willing to take a chance on him, thinking he could immediately help the club. Yet the budding all-star shortstop they drafted as the overall Number 1 pick of the 2012 MLB Draft, Carlos Correa, currently makes the lowest salary ($535K) on the team.
Joe DiMaggio reached a payroll milestone in 1949 when he became the first six-figure baseball player at $100,000 for the Yankees. That was a big deal at the time. Mickey Mantle nearly doubled his salary in 1957, from $32,000 to $60,000 after his historic Triple Crown season of 1956, but then took a $10K pay-cut in 1960 after he had a down year (yes, he only hit 31 HR and 75 RBI) as the Yankees failed to reach the World Series in 1959.
To further demonstrate how times have changed, some fifty-five years after Mantle, the Yankees’ Alex Rodriguez still received nearly $3M of his salary even though he sat out the season due to a PED suspension. The Yankees still owe Rodriguez $21M in 2017 after releasing him late last year. “The Mick” is probably turning over in his grave.
One of baseball’s pre-eminent pitchers, Nolan Ryan, made $3,600 in his first big-league season in 1966, which preceded free agency. He received baseball’s first million dollar salary in 1980, on his way to earning an estimated $27M during his entire 27-year career ending in 1993. Now, guys like Kershaw, Price and Grienke are making more than that in a single year.
It makes you wonder what will those young Cubs stars will be making ten years from now!