Friday, August 21, 2009

BASEBALL CONTRACTS ARE OUT OF CONTROL!!!!

First overall pick in the 2009 mlb draft, Stephen Strasburg, signed a $15 million contract. And, of course, people are pissed. Scott Boras is greedy. Baseball sold out. Lost it's innocence. All that shit.

Look, idiots. How much baseball players make doesn't affect you. You don't own a professional baseball team nor do you play baseball for one. If Strasburg signed a $150 million contract your life wouldn't be any different.

And Strasburg's contract is not going to ruin baseball. The salaries these young men are making are the price of their labor, and prices are communicators. They communicate value. Value is determined by millions and billions of economic decisions. So when someone says that a draftee who has never played a major league game doesn't deserve X amount of dollars, that person is inadvertently claiming to have knowledge of the millions of decisions that communicate the value of the draftee's labor. Which is ridiculous.

I know it seems like MLB operates in a vacuum outside of the price system. MLB essentially has a monopsony on baseball players wishing to sell their services at a high professional level. However, there are market forces involved. It may seem like Boras and the Nationals brass just sat down and invented a price to their liking, but baseball salaries - just like all other prices - are subjected to the laws of supply and demand.

So, let's say that Strasburg's contract jacks up the price for future draft picks. Furthermore, let's say that many of these draft picks bust. As a result clubs will conclude that paying a bunch of money for unproven draft picks is not a worthy investment and thus, the demand for draft picks will go down. So will the price. The bubble will pop. People that don't like high baseball salaries can go back to being grouchy about something else.

It is more likely, however, that clubs will realize that investing in draft picks is a good idea and the salaries of these picks will grow.

And for those that are worried that MLB contracts are out of control, let's look at how much the MLB average salary has increased in recent years.


For comparison, the average accountant's salary increased about seven percent last year. Now lets look at a much darker time, a much greedier time in baseball history. A time when children were forced to play with rodent carcases in alleys blackened by the soot and ash from the bonfires of money baseball agents used to light their cigars.


Somehow Scott Boras polluted baseball with greed before he was even a sports agent. Damn that guy's good.

5 comments:

haasertime said...

nice fucking use of google docs and tables and graphs. That pretty much clinches whatever argument you were trying to make in the thing I just sortof read.

haasertime said...

I once read that, in pure capitalism, your salary is directly related to the amount of money you bring to your employers.

I think where people get pissed off is that with draft picks, they're only dealing in potential money they will bring. Strasburg is an investment. An investment that could blow out an arm. And it's a valid thing to argue about wacky predictions of revenues Strasburg will bring.

But yes, I don't really care since it's all MLB monopoly-money anyway.

Anonymous said...

I just learned today that Jacksonian Democrats opposed paper currency. They advocated an exclusively metal currency. I have no idea why. I'm glad they lost (to that Whig, Wm. H. Harrison)and I'll bet Mr. Strasburg and Mr. Boras are glad, too. Imagine a $15 million bonus being paid with silver dollars!

FrontRowSeats

Daymonster said...

If my math is correct that would be about 15 million silver dollars!!

bizmarkie507 said...

Actually Soup, Players salaries do affect us fans. Higher salaries = higher ticket prices. Ask Yankee and Red Sox fans about that.