It is being reported that the Los Angeles Dodgers are about to sign an extension with new right-fielder Mookie Betts, acquired over the winter in a stunning trade with the Boston Red Sox, for an estimated 12-13 year contract at about 35 million dollars a year.

When I was giving my lecture to the Smithsonian about baseball this week, I mentioned writer Bill James’ argument that baseball is not “just a business” as detractors like to say. He has pointed out that because baseball’s market does not treat it as a business, but as a pastime, entertainment, a cultural touchpoint and a community institution, baseball teams are not run as rational businesses. Indeed, they are frequently run irresponsibly and incompetently, based on emotion and sentiment.

‘Twas not always thus. In the early days of professional baseball right up the end of the Calvin Griffith era in Minnesota, many teams were run as the sole sources of income by their owners, though by the time Griffith died, he was the last of that species. Beginning with Tom Yawkey’s purchase of the then perennial doormat Red Sox, however, the baseball owner as community philanthropist was born. Yawkey was a rich lumber tycoon, and he spent money lavishly on Boston teams to win games and make fans happy. He certainly increased the value of his sports franchise asset, but from a business standpoint his management was often irrational.

The Dodgers contract with Betts is in this tradition. Betts is a free agent after this year; that’s why the Red Sox traded him, because he was going to put himself up for sale to the largest bidder. The Dodgers sensed that the virus-truncated season changed the equation for them and the player: Mookie, one of the most talented, productive and likable players in the game, would not have a chance in 60 games to enhance his value, and each year passed  for a player is depreciation. Betts will be 28 this season, and most players peak at that age. Continue reading →