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Why are baseball players paid so much money?

This week Giancarlo Stanton signed the most expensive deal in the history of US sport.

Giancarlo Stanton will be getting the rounds in from now on.
Giancarlo Stanton will be getting the rounds in from now on.
Image: AP/Press Association Images

THIS WEEK, GIANCARLO Stanton signed the biggest contract in sports history when he agreed a $325 million, 13-year deal with the Miami Marlins.

Stanton’s contract eclipses that of Miguel Cabrera, the previous record-holder, though the Detroit player’s $292 million deal is worth more annually as it’s over 10 years.

Stanton and Cabrera’s deals are far from unique though. Indeed, if you look at the list of the largest contracts in US sports history, there are 29 baseball players before you see the name Kobe Bryant whose deal is the largest among NBA, NFL and NHL players.

But why are baseball players paid so well in comparison to other sports, especially when American football is more than twice as popular among fans and has been for three decades?

Well, the answer is three-fold.

1. No salary cap

Hawks Cavaliers Basketball How much is LeBron worth without a salary cap in the way? Source: AP/Press Association Images

NFL teams must maintain a 53-man roster with a salary cap of $133 million (that figure was $123 million last season). That works out at just over $2.5 million per player, per season. Stanton is set to earn $25 million per year of his contract (though it is likely to work out more like $18 million per year because of certain clauses in the deal).

Having no salary cap in baseball allows teams to bet the house on individual players and, while Major League Baseball does have a ‘luxury tax’ only one team – the LA Dodgers – is set to surpass it in 2015.

2. A long season means more TV money

Rockies Dodgers Baseball Hanley Ramirez plays around with a TV camera. Source: AP/Press Association Images

162 games is double the length of the NBA season and 10 times more than what most NFL teams have to play.

This means teams can negotiate lucrative TV deals with local cable channels and regional sport networks. The Yankees, for example, are set to make about $358 million a year from their 20-year deal with the YES Network in New York.

That’s currently the biggest TV deal in baseball but even the San Diego Padres – whose deal ranks 10th among MLB teams – is worth approximately $70 million per year making it easy to fund  players.

3. Moneyball

Dolphins Lions Football Megatron in action. Source: Jeff Haynes

Few sports are measured as minutely and comprehensively as baseball and the linear nature of the game makes it much easier to distinguish between a player’s individual performance and that of his team.

That’s not so easy in other sports.

Calvin Johnson, for example, is an elite wide receiver – and owner of the biggest contract in the history of the NFL – but it’s much more difficult to value his contribution when he’s relying on a quarterback to throw him the football.

If/when the Lions move on from Matthew Stafford, how will that impact Megatron’s contribution? Nobody can tell.

Stanton, on the other hand, has hit a total of 154 home runs in five MLB seasons and, despite missing the final 17 games of the season after being hit in the face by a pitch, his 37 homers in 2014 were the most in the National League.

So there it is. If you want your son to earn more money than they could possibly spend, buy them a baseball bat this Christmas.

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About the author:

Steve O'Rourke

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