Home MLB Major League money 2010: Part Two

Major League money 2010: Part Two

by Matt Smith

MlbHlSqOn Tuesday, we took a look at the final MLB payrolls from 2010. 

From the New York Yankees’ free-spending ways to the San Diego Padres’ frugal flirtation with a playoff spot, the figures showed the considerable financial gap that exists, but also that money doesn’t guarantee success.  Those without big spending power are at a disadvantage, but it’s far from being an insurmountable barrier.

How does this situation compare with English Premier League football teams?  Does the financial might of the Premier League make the MLB payrolls look less imposing, or do footballers’ wages pale in comparison to the big stars of baseball?

Making meaningful comparisons between the two competitions is difficult. That’s partly because we rarely get a clear picture of what football teams actually spend. 

Baseball fans can look on the roster pages at websites like ESPN.com, or consult dedicated resources such as the indispensible Cot’s Baseball Contracts, and find out exactly what every player earns. In football, you normally only find out how much the biggest stars are earning when they get a new contract and even then the figures are informed estimates by journalists that vary from publication to publication (one newspaper will say £70k per week, another £80k etc). 

Despite these limitations, newspapers do publish details of expenditure by football clubs following the analysis of accounts and work by companies such as Deloittes. 

Back in June 2009, the Guardian’s David Conn put together a breakdown of Premier League clubs’ turnover, wages and debt in 2007-08. Chelsea were the biggest spenders with a wage bill of £149m. The pound/dollar exchange rate has changed significantly since then, but on a current conversion that would amount to $232.4m: similar to the Yankees’ total in 2010.

More recently, David Conn has stated Manchester City’s wage bill for all staff as being £133m, which amounts to close to $207.5m. Most of that wage bill will go to the players and when you add on City’s large outlay in transfer fees, their 2010/11 expenditure on playing staff is likely to be significantly more than the Yankees’.

What about the gap between the largest spenders and the least wealthy?

Generally the gap would be similar to that in MLB, albeit with the Premier League gap covering just 20 teams rather than 30; however, the difference between the haves and the have nots is all the more stark in 2010/11 due to the presence of Blackpool.  Estimates of their wage bill vary between £6m or £10m, but we do know that they currently operate a wage cap in which no player earns more than £10k per week.  That’s the equivalent of an annual salary of $810,376.

What can you get for that sum in MLB.  When you look at the Yankees’ roster and see Alex Rodriguez earning $33m in 2010, CC Sabathia earning $24.3m and A.J. Burnett ‘earning’ $16.5m the natural reaction would be to think ‘not a lot’.  But then you scroll down and realise that you could have had Phil Hughes, Brett Gardner or Joba Chamberlain with several hundred thousand to spare. 

In fact, you could put together a very impressive group within the $810k limit when looking at some of the top performing young players from 2010.

Position Player 2010 Salary
C Buster Posey Less than $400k*
1B Joey Votto $525k
2B Martin Prado $440k
3B Casey McGehee $427k
SS Starlin Castro Less than $400k*
OF Carlos Gonzalez $406k
OF Jason Heyward $400k
OF Nelson Cruz $440k
SP Clay Buchholz $443k
SP Clayton Kershaw $440k
SP Tommy Hanson $435k
SP Mat Latos $408k
SP Gio Gonzalez $405
CL Neftali Feliz $402k

* Posey and Castro didn’t play a full MLB season, so their salaries aren’t readily available.  They would have earned less than the minimum $400k though during the period they were in the Big Leagues.

That’s quite a collection of talent, all at bargain basement prices.  However, those figures have to be put into context.

The other main reason why comparing MLB and Premier League expenditure is that the contract situation in both sports is completely different.  Those salaries are relatively low because the players are at the start of their Major League careers and they hide the fact that the team (or another team if the player was traded as a Minor Leaguer) had to pay the player a signing bonus when he was acquired in the annual amateur draft. 

Blackpool could afford Buster Posey’s 2010 salary, but the $6.2m bonus he received from the San Francisco Giants when they selected him in the 2008 Amateur Draft would be beyond their means.  Mind you, Tommy Hanson’s $325k bonus would fit much more easily into their budget. 

After three years, sometimes two if they are particularly successful, a player will start earning more money as they become ‘arbitration eligible’ and their annual salary will be determined by an arbitration panel if the team and player cannot come to an agreement.   In an attempt to limit large year-by-year increases, a team will try to negotiate a multi-year contract with the best young players, and it’s at that stage that Backpool’s charge for MLB glory might come unstuck.

Joey Votto won the National League MVP award while earning $525k, but the Reds knew his salary would greatly increase in the years ahead and therefore signed him to a six-year/$51m contract (equivalent to £105,323 per week over the period).  Carlos Gonzalez finished third in the NL MVP voting and is reportedly on the verge of signing a seven-year/$80m (£141,729 per week) contract extension with the Colorado Rockies. 

The bargains don’t last long and the players earn more money when they hit free agency.

Typically a player becomes a free agent after six years, sometimes longer if they sign a contract extension earlier in their career.  At that point the best players hit the financial jackpot, able to field offers from any team and signing a multi-year contract without a transfer fee needing to change hands (i.e. a ‘Bosman free’ type situation). 

Carl Crawford spent eight years with the Tampa Bay Rays before becoming a free agent for the first time this offseason.  In his first year in the Majors, Crawford earned $300k.  One month ago, he signed a seven-year/$142m contract with the Boston Red Sox.  That’s the equivalent of earning £251,519k per week for the duration of the contract.  As a comparison, Yaya Toure’s contract with Man City, that has caused plenty of outrage among some football fans, is worth £220k per week for five years. 

So, the very best players in MLB can outstrip their Premier League rivals when they hit free agency, but they typically reach the top tier of the sport at an older age, earn less in their first few years and give up a significant amount of freedom at the beginning of their careers: they don’t get a choice of who drafts them and can be traded at any point without their consent.

One thing’s for certain, the biggest teams and the best players in both MLB and the Premier League deal in figures the rest of us can only dream about, regardless of a recession.

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