Pat Benson: Record Contracts Are Good For MLB

Over the past two weeks we have seen a flood of gaudy deals and a handful of record contracts signed by MLB players. Manny Machado to the Padres, Nolan Arenado’s extension with the Rockies, and finally Bryce Harper to the Phillies. Team owners and front offices have been pinching pennies all winter causing major free agents to hold out. The players did the right thing by not accepting lowball offers; these giant contracts are good for the league and will help the sport.

Before I defend my thesis, it’s important to give some quick labor relations history. Baseball more than any other American sports league has had the most contention between players and owners.

Despite not having a salary cap (such as the NFL and NBA), MLB has used the luxury tax as a soft cap since 1997.

As part of the 2002 Collective Bargaining Agreement (CBA), the luxury tax has slowly risen from $117 million to $206 million. During that same time, MLB revenue has grown from $3.58 billion to over $10 billion dollars. Comparatively speaking, the luxury tax has increased by 68 percent while the total league revenue has grown by 188 percent. Consequently, players' payroll went from taking home 57 percent of league revenue to near 40 percent.

The growth in revenue has largely been attributed to television contracts, streaming rights, and other sources of sponsorship. In spite of the revenue growth; attendance was down four percent, and television ratings were flat last season. Both attendance and television ratings could seemingly be improved by having superstars on your team’s field.

Over the past three seasons, the trend for front offices in the league has been to slash payroll and do everything possible to get under the luxury tax. Last year’s pennant winners, the Boston Red Sox and Los Angeles Dodgers, have unloaded players to get under the luxury tax while other teams like the Atlanta Braves refuse to get anywhere near the threshold.

I wish the salary problems were isolated at the luxury tax, however arbitration rules for young players and miserable minor league contracts have only exacerbated the problem. Baseball is a multi-billion dollar industry, and any healthy market needs competitive pay. This is America, talent gets rewarded and employees get fairly compensated.

There is a reason why the number of teachers in our country are sinking. And there is a reason why so many of the best and brightest minds are no longer going to medical or law school. Young people with exceptional talent want to get paid, so they would rather work on Wall Street or in Silicon Valley. Kyler Murray crystalizes this conundrum by choosing to enter the NFL Draft rather than playing for the Oakland Athletics.

The current CBA expires in 2021 and player contracts will obviously be the main source of contention. All parties lose during a work stoppage. To avoid a strike, and hopefully start attracting top athletes again, MLB needs to make meaningful reforms to how players are paid. In the meantime, fairly compensating elite players will help soothe the problems that irk the league.

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Pat Benson is a fixture at local high school sporting events. He has been a sideline reporter, P.A. announcer, and radio personality. Tweet him @Pat_Benson_Jr.

Source : https://www.chattanoogan.com/2019/3/2/385729/Pat-Benson-Record-Contracts-Are-Good.aspx

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