May 26, 2018

The Catch-22 Of Baseball

December 30, 2010 by · 3 Comments 

For a non-baseball fan, it seems ridiculous that a bunch of men holding a wooden stick can make millions of dollars for hitting a piece of leather stuffed with yarn. For a baseball fan, on the other hand, it’s all relative. If Alex Rodriguez makes $32 million, that’s fine; but how does that affect, say, Derek Jeter’s next contract?

Baseball is a never-ending chasm of market analysis — what does one deal mean for the next? However, very seldom do we sit back and take a look at the results of these deals. But thanks to some data from and Cot’s Baseball Contracts, we can finally make some unprecedented observations.

Let’s first look at the two players with the two biggest contracts in baseball history. Those two players are, not surprisingly, Derek Jeter and Alex Rodirguez. Both their deals were for 10-years, a record high.

Here are two graphs, one showing A-Rod’s salary and his home runs per year, and one showing Jeter’s salary and his yearly batting average.

For those wondering, I chose home runs for Rodriguez and batting average for Jeter because those are the stats that make their careers such successes.

Evidently, both Jeter and A-Rod — and likely all players with long term deals — see a constant increase in salary. That, however, does not correlate with success. In other words, the salary is a sure-thing, while the success is not.

The consequences are obvious and are evident every season. Teams give players the monster contracts they demand, and the players don’t necessarily live up to it. When a player signs a contract, he is guaranteed money, while the team is guaranteed nothing other than a chance.

A great deal for the player, a horrible deal for the team.

Now, let’s look at a player who did not have the luxury of enjoying a long-term contract. For arguments sake, let’s observe Matt Stairs, who has signed 10 contracts in his career: nine one-year deals and one two-year deal.

Here is a graph of Stairs’ salary and his yearly WAR (wins above replacement). The 1992, 2006, and half the 2008 season is missing due to an unknown or disputed salary.

As expected, his salary is all over the place. Unlike the players with the long term deals, there is new criteria for a deal each season, and the salary flucuates accordingly.

In this case, however, things are still a bit off. Graphically, as one line goes up, the other goes down, or visa versa. Theoretically, that means that success one year means a bigger contract the next year — makes sense.

But the team still loses out here. While the player deserves to make more money after a successful season, it does not mean he will succeed the next season. (Quite the opposite in Stairs’ case.)

So how do we make this fair? How do we get salary and success to correlate the way it should?

The only way either of those can happen would be if teams decided they were only going to hand out incentive-based, one-year deals. That is the only way to make it fair, and the only way to make these salaries make sense. But, thanks to the Players Union, you can kiss that dream goodbye.

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3 Responses to “The Catch-22 Of Baseball”
  1. James Morgan says:

    Normally, I love your posts, but this one is just wrong. The Players’ Union has nothing to do with the lack of incentive driven short-term contracts.

    In fact, in Marvin Miller’s book he admits he was worried that free agency would be universally used by all the MLB teams via short-term contracts to flood the market of available players and thus lower salaries.

    Also, if baseball salaries weren’t so high, then we would not get our fair share of the athletic talent in relation to the NFL and NBA. Youth see those dollars and want to play hard ball instead of being the Bama or Trojan QB. But again, no one legislates how the owners spend their money. Just ask The Boss or his heirs.

  2. James Morgan says:

    Do you think the Black Sox got their nickname for throwing the World Series? And why do you think the team skipped their ace’s starts for the last 3 weeks of the 1919 season?

  3. Mike Lynch says:

    Originally Posted By James Morgan
    Do you think the Black Sox got their nickname for throwing the World Series? And why do you think the team skipped their ace’s starts for the last 3 weeks of the 1919 season?

    Actually, yeah, the Black Sox did get their nickname for throwing the World Series. There’s no proof whatsoever that they got their nickname because Comiskey charged the players for laundry and the team rebelled by wearing dirty uniforms. And even if that actually happened, I defy anyone to find any reference to the nickname prior to the scandal. I’ve searched dozens of papers and the only reference I’ve ever found to the Black Sox prior to the throwing of the World Series was in reference to Negro League teams called the Black Sox. Otherwise, the nickname as it pertained to the White Sox didn’t appear in print until after the scandal.

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