In January, first baseman Albert Pujols signed a contract with the Los Angeles Angels. This contract could end up being worth more than $268.75 million, including milestone achievements, awards, and other incentives. In class on March 22nd, we discussed economics in sport. One topic centered around the lack of a salary cap in Major League Baseball. I believe that this is baseball's biggest flaw, as it only allows around five teams to compete on a yearly basis, simply because they have the resources to pay more for the best players. Taking a look at team payrolls for the 2012 season, it is easy to see how teams like the Padres, Athletics, Royals, and Pirates are at a disadvantage when it comes to free agency. Other organizations, like the Yankees, Angels, Red Sox, and Phillies have payrolls over three times the size of the lower teams. When these teams can outbid for the best players, how can the small market teams expect to compete?
On page 382 of Coakley's text, he compare the average salaries of major American sports leagues to the median income for a US family. In 1950, the average salary in MLB was $13,300 compared to a median income of $4,000--a gap of $9,300. This is a ridiculous statistic, but it is dwarfed when looking at the differences in 2007/08. The average player salary was $3,142,000 compared to $58,480 median income. That is a gap of $3,083,520. Pujols makes much more than the average salary. The enormity of these contracts shows how commercialized sport has become. At this point, athletes can almost be considered entertainers, and these athletes are financially rewarded for being the most entertaining. Hopefully, Albert Pujols can entertain many people for a long time.
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