My Aunt Bea, the family progressive and knee-jerk Democrat, died this year at the age of 96, cantankerous and opinionated to the end. She was a big Cincinnati Reds fan (she lived in Dayton, Ohio) and I remember her having many arguments with my father when free agency exploded the salaries in Major League Baseball in the late 1970s. “No baseball player is worth those salaries,” she insisted. My father would laugh and say, “Bea, by definition they are worth those salaries, because the people who benefit from their unique talents are willing to pay them.” Then she would talk about teacher salaries, and my father would say, “It may seem unfair, but a lot more people are capable of teaching than are able to hit a fastball, and the sad fact is that a a large number of Americans care more about sports than they do public education.”
I wonder what my aunt and my father would be saying now after the announcement that Juan Soto, the young (26), amazingly talented slugger widely recognized as a generational talent and a certain Hall of Famer barring some catastrophe, agreed yesterday to a 15-year, $765 million contract with the New York Mets.
In his short major league career so far, Soto has already earned over 80 million dollars. Even though the previous record-setting contract was given out just last year to freakish Shohei Ohtani, who is both a great hitter (he was the National League MVP in 2024) and an ace starting pitcher, Soto’s new deal for just his batting prowess topped it. This contract automatically raises the worth of every other player, increases team payroll expenses, increases ticket prices, makes it increasingly unaffordable for families to attend baseball games, makes it more difficult for small market teams to compete, and, once again, makes Gordon Gekko look prescient when he said in “Wall Street,” “Greed is good!”
Last night, the various baseball experts on the MLB channel were saluting Soto (and his unethical agent Scott Boras) for having the brilliant foresight to turn down a long-term contract for nearly a half-billion dollars from the Washington Nationals in 2022, when he was nearing his free agency option. The Mets will be Soto’s fourth team in seven years, an odyssey entirely caused by Soto’s desire, inflamed by his agent who profits by it, to maximize his income while ignoring all other factors.
I know I’ve written about this topic before in regard to baseball contract negotiations, and looking back, I have little new to offer except this: Stein’s Law is usually stated as “If something cannot go on forever, it will stop.” Professional sports have to be approaching the point where the salaries are so large that they remove an athlete’s incentive to keep playing for the length of a contract.
Soto reportedly will receive a 70 million dollar signing bonus. He receives another 70 million or so after the 2025 season. What if he decides that he wants to be a beach-comber, a pop singer, playboy or a travel writer? What is Juan Soto going to do with 700 million dollars in 15 years that he can’t do after a single year with the 220 million dollars he will have already earned?
I covered this in a post in 2016, when Orioles slugger Chris Davis was negotiating with the team. (The huge contract he eventually signed with Baltimore quickly became an embarrassment, as the O’s were stuck with their highest paid player after he had stopped being an even average hitter.) I wrote then in part,
Why seek more money that you need? As a general proposition, I dispute the right of anyone to tell someone else what they need. Discovering what one needs is part of the journey of life. It is not a question that should be answered and imposed on anyone by someone else, a faith, a philosopher, a government agency or Bernie Sanders. This also comes up in Second Amendment debates: nobody needs a gun; nobody needs a semi-automatic; nobody needs an arsenal, we are told, by people who have no interest in guns whatsoever and who can’t imagine wanting or needing one. I have also been told that nobody needs children, live theater, and ethics…
That is not to say that the question isn’t one that should be asked—by a friend, a relative, a baseball manager, an ethicist or by yourself to yourself— when you may be warping your life in the pursuit of money above all else. Baseball players are pushed by their union to seek the highest salaries possible, and to sign with the team offering the most money. Those who follow that directive are often acting against their own self-interest….Unless he has some dread addiction, owes money to the mob, or invests with Bernie Madoff’s clone, Chris Davis, who has made just under 27 million dollars already in his career before he is 30, is not hurting for money. He has a wife and daughter, who were reasonably secure for life before he signed the recent contract. Nobody was saying that Davis would be a greedy bastard if he didn’t play for free, or that he shouldn’t seek fair compensation based on what similar players in his sport were being paid…Since he was sure to get a lot of money, and since 150 million was almost certainly more than he could possibly spend, why make maximizing his salary his only objective? Davis has the luxury of choosing where his family would live and where he will work, and instead he is going to let that choice and his autonomy be forfeited to the highest bidder–to what end?
What values are being served by such priorities? At some point, and I would assume it comes well before 20 million a year, the marginal utility of each additional dollar is negligible. Players in Davis’s situation always say that they have to maximize their income “for their kids,” to which I say, “Oh, give us a break!” If you want to ensure that your child grows up useless, by all means set them up with a 30 million dollar trust before they are 18. Now, if a player says, “I need as much money as I can get, because I’m using it to feed starving children in Africa” or “I’m using it to build a hospital like St. Jude’s,” or, like Red Sox great Pedro Martinez, “I’m spending it on building roads and schools in the Dominican Republic,” that’s a reasonable, thoughtful allocation of priorities. I have seldom heard a player say these things, however; for the most part, elite athletes are terrible at giving away their money….The difference between 160 million and 150 millions is just an abstraction to most athletes.
If this applied to Chris Davis, seeking what now looks like pin money compared to Soto’s haul, it certainly applies to Soto as well. Add to that the effect his deal will have on the sport and its fans, and his amazing new contract seems irresponsible on all sides.
Ethics Alarms 
Are there any impediments to starting new teams other than needing the money to do so?
Sure. Because baseball is exempt from the anti-trust laws, a new team has to be approved by the other owners. A new league is another matter, but that has been tried over and over again without success other than the American League at the turn of the century.
Then it makes sense, when demand increases and supply is artificially restricted for the dollars generated by demand to find a place to be concentrated. In this case – star players.
The money to pay these salaries must be appearing on the owners’ balance sheets from somewhere. A friend of mine who’s friends with the current leader of Dodgers ownership (and Guggenheim Partners?) says the new ownership recouped the entire purchase price for the Dodgers immediately after making the purchase by selling the broadcast rights. Networks and their advertiser customers will pay dearly for sports broadcast rights because games are the only thing viewers will watch in real time rather than record and then skip through the commercials when viewing. And then there’s the cell phone betting cash stream ownership has been able to corral to a large extent, wrestling the Vig away from The Mob (or perhaps, more accurately, going into business with The Mob).
I just don’t understand how people can afford to attend these games. You pay a ton for parking, a ton for bad seats, a ton for food, and a ton for maybe a souvenir. Add a family of four, and you’re out maybe $500 if you don’t do the last two.
I get what your dad is saying. But the market is going to get to a point where no one is going to be able to go. Its not like these prices are ever going to come down.
And the “experience” is terrible. Constant loud “music” including “walk-up music,” recorded cheers, massive video screens, cheerleaders, awful organ music. I fondly remember being taken to Miami Marlins games by my dad in the ‘fifties and ‘sixties when they played in the AAA International League, which with teams in Montreal and Havana was truly international. We’d emerge from the bowels of the stadium into the seating area and be overwhelmed by the vast expanse of perfectly manicured grass and Georgia clay. It was like entering a huge outdoor church. The fans quietly contemplated events on the field, clapping and shouting when a play justified doing so. No organ, minimal, but informational, PA announcements. Even the sounds of the peanut and cotton candy and beer vendors were pleasant. You could hear the crack of the bat and even the ball thumping into gloves. Delightful. I wouldn’t go to a Diamondback’s game now if you paid me. TV is much better.
I’m glad the magic words “Scott” and “Boras” appeared in the post.
Do we really want the government regulating compensation? Pete Buttigieg or Bernie Sanders heading a department deciding what is “too much?” No thanks.
Who said anything about government regulation? An NBA-style salary cap, however, may finally be prudent.
Who said anything about government regulation? Every lefty I’ve ever known who say anyone who is rich (i.e., makes more than they do) is “making too much money” and the government needs to do something about it to make things “more equitable.” Of course, they don’t want their salaries capped and they sure as hell don’t want to pay more taxes. They’re not rich! “Get those really rich guys to pay their fair share! And stop them making so much money!”
I assume the union would strike if the owners instituted a hard salary cap. And anyway, I’m sure the owners are perfectly content with the current arrangement.
Nearly every position player offers peak performance in the ages 27-29, after which skills plateau for a year or two and then begin to attenuate.
Start by looking at Mike Trout’s record deal a few years ago. When he signed it as a 28-year-old (in 2020, I believe), he was already in the “prime-years” window. And since?…he hasn’t put together a full season…making upwards of $40m per season. Injuries are plaguing him, and the deal, for all its luster when signed, is becoming a financial boat anchor on the Angels, who specialize in terrible contracts (see: Pujols, CJ Wilson, Josh Hamilton, etc.) I realize teams have massive budgets, given their licensing and TV deals, but these outrageous deals have to be paid out when players are in their 35-40 year range. Ownership must be banking on the value of their TV deals increasing at such enormous rates to compensate for the horrific end-of-player-life salaries.
The Mets are a big-market team and have the ability to pay, but I’d be willing to lay a Franklin – several of them actually – on the notion that in 10 years…no, 7 years…Juan Soto will not be producing anywhere near the numbers he does now and people will be laughing at that deal. The Mets would have been money ahead to offer a 5/$500 deal. If he signed, they would have capitalized on Soto’s prime years, Soto could have bragged about making $100m a season, and someone else could have taken the risk with the later years. If he held out for longer/bigger, the Mets could move on and dodged the huge bullet pointed straight at their balance sheet.
But as a fan of the Braves, who play in the same division as the Mets, I LOVE the financial hamstringing the Mets are risking here. Hopefully they do a couple more awful deals like this one.
1. At least Trout still plays like a superstar when he’s healthy.
2. Don’t forget Rendon!
3. I would have thought that the Pujols and Cabrera contracts, which both became anvils at around age 32, would have killed these kind of deals. Guess not!
I suspect the Mets know the contract is too long, but it was probably the only way to satisfy Boras. I’d read the term as simply deferred compensation. They’ll be paying him long after he’s back in the DR living like a king.
Michael. I am not sure I follow your reasoning. If other leagues formed the demand for all quality players would increase yet the supply of players at the current level of quality would be static. That would increase the number of buyers of players competing for a limited supply driving prices of players up.
If we view this from an increasing supply of leagues which would compete for attendees to games it might affect ticket prices but would have the above affect on the supply and demand for top players.
The expected outcome of expanding leagues would be that incumbent teams with revenue streams would relegate the new league to 2nd tier players and the consuming public will probably opt for the watching the top talent. We can actually see this when it comes to attendance at minor league teams.
In the end, the market can probably only support two major leagues.
The question to come is when more people eliminate broadcast media or cable for streaming will the streaming services have the resources to pay massive fees to MLB for rights to televise games
Well, we haven’t had any new leagues form — far from it, the minor leagues have been withering on the vine. However, remember that in 1961 there were only 16 major league teams. Today there are 30 teams.
Correct me if I am wrong but there’s also effectively 26 players per team, so jobs have gone from 400 to 780 at the major league level, almost doubling.
Our population has also roughly doubled since 1961, plus MLB teams recruit much more from Latin and South America than they used to. That would tend to argue that there should not have been any major diminuation of the general major league talent level, and I think that’s largely true. However, finances have had a tendency to drive the top talent towards the big market teams.
MLB doesn’t have a nation-wide, socialistic television contract like the NFL does, but their overall revenue is in the same ballpark, so to speak. The sources are different, though.
From what I’ve seen, unless you are the White Sox or Tampa Bay, stadium attendance seems to be fairly robust, better of course if you have a better team. I believe that stadium related revenues are relatively more important for baseball than football — the individual crowds are smaller but baseball has ten times the number of home games.
But the biggest differences amongst teams will be the local television (and radio) contracts the owner is able to sign. For example, I believe one of the problems the Astros had in the early 2010s, when they bottomed out was that the previous owner wasn’t able to sign a TV contract, and many of their games actually weren’t televised. It was a factor in forced the sale of the team and forcing the team to move to the American League, despite what anyone in Houston actually wanted.
But big market teams — NY, LA, Chicago naturally have access to better TV revenues than, say, Minnesota or Seattle. It was a problem that was severely affecting competitiveness, and MLB came up with the luxury tax and a limited form of revenue sharing to compensate. It can’t entirely — I doubt if Minnesota could ever sign a $765 million contract, but it has reined in even teams like the Yankees who were notorious for their huge payrolls.
One of the effects is that teams like the Yankees and Dodgers can afford to be good all the time, while teams like Kansas City or Seattle run in cycles: If they draft well, and trade shrewdly they can build a really good team — for a while, until their up and coming stars need to get paid and sign with the Yankees. Then they start over. It’s how Houston got good, but they’ve defied the odds to remain good for about a decade. Partly, I think, is that Houston is almost in the ‘big market’ category.
All that, I think, is why the Mets can afford $50 million a year for one player. But why aren’t the Mets as successful as the Yankees? Why aren’t the Cubs and White Sox as successful as the Dodgers? Well, general managers don’t get paid zillions of dollars like their players do, but skill and talent matter there at least as much as on the field. There’s a reason the Dodgers are perennial winners where the Angels are perennial sad sacks.
But eventually, the rub is that in 2032 the Mets will still be paying $50 million a year, but it will be for a $10 million a year ball player. They may be able to make up for it, but dead payroll like that will trip you up sooner or later.
So, I’m happy for Soto, but I don’t like the Mets prospects a few years down the road.
Soto’s deal averages $51M/yr while Sherzer and Verlander are at $43M/yr. But they play for Texas teams. Soto will pay close to $5.5M in additional taxes for playing on a NY team. And let’s not forget he has to pay that agent/manager for making the deal – so I image his $25/yr is actually $20/yr.
If your math is correct, and I’d be the last one to check it, then that means that Soto would have done better to negotiate without an agent and get a contract worth 35 million a year, no?
And signed to play outside NYC or LA.
I wondered that we surely have begun reaching critical mass on sports salaries, especially in baseball and basketball.
Then you realize that between 50-70% of Americans watch sports, and that’s a lot of dollars.
The owners aren’t making the money on attendance, so I’m not sure why ticket prices need to be that high. Maximizing profit (at the stadium) means if they get enough suckers in the door at price x, it doesn’t matter if they fill the stadiums, they’ve done well for that venue. I suspect it’s just the accounting and financing that drives venue prices.
I don’t watch a lot of professional baseball anymore, but it seems to me when I have, stadiums are half empty. And these owners get cities to build them venues, just adding to my disgust at how it’s all going down.
Add to that they have way more fans not in the stands than will ever attend, so who cares about the stadium? It becomes bragging rights for the owners at who suckered the city more.
I used to go down to Anaheim stadium on a whim, spend $12 for a not terrible seat (late 80s/early 90s), and enjoy being at the ball park. That’s $30 today. My folks have a place across the bay from the Padres stadium. Hey, it would be fun to take in a ball game, let me see what tickets are. I think nosebleed seats are $80-90.
It’s got nothing to do with the game anymore, it’s just business to the baseball mob.
I used to not really care about baseball’s antitrust position, but upon thinking about it, revoke that status. Out of spite, really.
Well, spite and common sense and fairness. Baseball’s unique exemption is pretty much indefensible. That was harry Blackmum’s second worst majority opinion after Roe.