At a certain point of wealth, it’s all cartoon bags with dollar signs on them, with the actual amount of money not really mattering all that much.
Mike Trout, the best player in baseball now and maybe ever, is not going to notice a huge difference between the $430 million he’ll make over the next 12 years after signing what is simultaneously the largest contract ever and a huge bargain, and the $500-plus million he may have been able to earn as a free agent in two years. Trout sacrificed some future pay in order to have certainty about his future, both in where he figures to spend the rest of his baseball career and to lock in almost half a billion dollars now without having to worry about what happens if he gets run over by a bus before 2021.
You can’t blame Trout for taking a deal that will pay him more money than he could ever dream of spending. Seriously, since The Weather Channel sold for $300 million last year, the most famous amateur meteorologist in baseball could make his dream purchase and still have nine figures left in his bank account. Maybe he could get a piece of the action at SuperPretzel, too, who knows?
What happened with Trout, though, is not just about Trout. It’s about where Major League Baseball is now, and is continuing to go, as the sport’s collective bargaining agreement ticks ever closer to expiring after the 2021 season.
Ten years ago, Alex Rodriguez made $33 million while playing for the New York Yankees, which basic math tells us is less than the $36,833,333 that Trout will receive this year. Only, when you convert A-Rod’s salary from 2009 into today’s dollars, an easy thing to do thanks to Baseball-Reference, you can see that Jennifer Lopez’s fiancé made the equivalent of $38,538,390, which the same simple math tells us is more than the $36,833,333 that Trout will receive this year.
It should be noted that Trout is entering his age-27 season, right in his prime, while Rodriguez in 2009 was playing his age-33 season, which is typically around when players start to decline. Indeed, although the Yankees won the 2009 World Series, with A-Rod an instrumental part of that victory, he had his lowest home run total since 1997, and it was the last time he finished in the top 10 in MVP voting.
A superior player, earlier in his career, is making less money when adjusted for inflation than 10 years ago. Meanwhile, in that same time period, revenues for Major League Baseball have gone from $6.6 billion to $10.3 billion. The top payroll in MLB in 2009 belonged to the Yankees at $220,024,917, while last year it was the Red Sox at $239,481,745. The top team is paying less, after adjusting for inflation, than it did 10 years ago, at a time when revenues have gone up 56% – or 33% when adjusted for inflation.
The argument has been made countless times when players get paid enormous sums of money that it shows the need for a salary cap in baseball. It turns out, the opposite is true. In the NBA, NFL, and NHL, the players get a set percentage of league revenues – that’s how the salary caps are calculated. In baseball, where players are getting less of the revenue all the time, a salary cap would force management to do what a supposedly free market no longer is doing, and mandate that labor get its fair share.