How Fair is MLB’s Salary Scale?
Over the weekend, the Angels renewed Mike Trout’s contract, opting to pay him $510,000 — $20,000 over the league minimum — for the 2013 season. Because of how great Trout was last year, this has caused some backlash, including these comments from Trout’s agent:
“I asked only that the Angels compensate Mike fairly for his historic 2012 season, given his service time,” Landis said in an email to the Times. “In my opinion, this contract falls well short of a ‘fair’ contract, and I have voiced this to the Angels throughout the process.
While Trout’s renewal has gotten some attention, the reality is that the Angels are just following standard operating procedures for MLB teams. Giancarlo Stanton just had his contract renewed for the third time, and he’s going to make just $537,000 this year, the first year he’s cracked $500K in salary. The Dodgers renewed Clayton Kershaw’s contract three times as well, paying him $404,000 in 2009, $440,000 in 2010, and $500,000 in 2011. Jason Heyward was paid just $496,000 for his second big league season and $565,000 for his third year. This isn’t just the Angels being cheap. This is the pay scale that MLB teams operate on. This is the pay scale that the player’s association has collectively bargained.
Like in many unions, the system is setup to ensure that those with seniority get larger paychecks than those who are just starting out. By establishing a scale where players with less than three years of service time have essentially no leverage, the union has simply shifted money from younger players to older players. The system was designed so that the money would be unequally distributed, with aging players drawing the majority of the benefit.
Trout’s agent is correct that this system isn’t “fair” to young stars who are creating a lot of value for their teams and are not being paid for that performance until much later in their careers. However, this is essentially the system that every professional sports union in the U.S. has accepted. The NFL’s league minimum salary is just over $400,000 for a rookie, and a player with one year of service time has a minimum base salary of $480,000. The rookie minimum in the NBA is $475,000, though their pay scale escalates a little quicker, with a second year player making $762,000. The league minimum in the NHL is $525,000, and is set to rise to a grand total of $750,000 by the expiration of their brand new CBA, which covers the next 10 seasons.
Half a million seems to be something like the magic number for early career players in American pro sports. Major League Baseball isn’t out on an island here, as everyone has essentially agreed that the youngsters should give up money that they earn with their play so that veteran free agents can get larger paychecks than they deserve. And, while this system isn’t equitable, it likely has some positive effects on competitive balance that we should be careful to not remove in the interest of fairness.
As Jeff Passan notes, MLB teams are going to crack $3 billion in spending on total payrolls this season. Last year, the MLBPA estimated that the average salary for a Major League player $3.2 million, as 944 players were either on active rosters or the disabled list as of August 31st. Even though there are only 750 roster spots available in MLB, dead money players who are rehabbing or forcibly retired still collect paychecks, so there are usually between 900 and 1,000 players receiving big league paychecks.
And a lot of those players make the league minimum or something very close to it. The Lahman Database has the salaries for 848 Major League players in 2012, and 335 of those 848 made $550,000 or less last year. That’s basically 40% of the population earning a salary that was within $70,000 of the league minimum. That’s why the average salary of those 848 players was recorded at $3.4 million while the median salary was $1.1 million. The high-earning tail of MLB players represents a lot of money going to just a few players. For reference, here’s those salaries broken down into quartiles of 212 players each.
| Quartile | Average Salary |
|---|---|
| Low | $482,886 |
| Middle-Low | $639,714 |
| Middle-High | $2,580,448 |
| High | $10,130,637 |
What would happen to MLB’s pay scale if the league minimum doubled to $1,000,000 per year, in order to more fairly play pre-arb players for their contributions? Well, last year, there were 401 players with a salary below $1 million according to the Lahman database, and those 401 players were paid a total of $215 million. If we raised the floor to $1 million and assumed that every player would just accept the minimum — not a true assumption, but let’s just go with it for now — that would transfer $187 million to the lower and lower-middle class players. That money has to come from somewhere, and a raise in the league minimum would almost certainly result in a similarly sized reduction in salaries for veteran players.
And that would likely present some problems for the lowest revenue teams in MLB. Shifting money from the highest paid players to the lowest paid would essentially act as a regressive tax on teams that run lower payrolls. The 0-3 service time players are the life blood of competitive teams with low-to-moderate budgets, and increasing the price of those players would limit their ability to add veteran free agents to round out their rosters. An offsetting decrease in the price of free agents would make it easier for higher revenue teams to add even more veteran talent, since the prices of middle-tier and higher end players would come down in response to the higher minimum.
Raising the minimum would essentially be like enacting an extra tax on people who shop at Walmart while paying for it with a tax break for items purchased at Pottery Barn. And that’s probably not something that MLB should be too eager to enact, given the revenue disparities that already exist. The luxury tax and revenue sharing have done some good work in helping lower revenue clubs to be more competitive, but a raise in the league minimum would be a step backwards from a competitive balance standpoint.
There’s essentially a fairness trade-off here. If you make the system more fair to the individual players, you make it less fair at the team level. A wide range of player salaries shifts a larger burden of the spending towards higher revenue teams, and forcing high revenue teams to spend their financial advantage on aging, declining players mitigates some of those advantages. If MLB established a pay scale that was based more on player performance and less on service time, the financial disparity among MLB clubs would become a larger factor in determining wins and losses. By making things more fair for young players, the sport would likely become less fair in terms of distributing wins and losses between franchises.
On the one hand, I sympathize with players in Trout’s situation. If his career goes the way of Grady Sizemore, he may never land the massive paycheck that his talent is worth, and it seems silly for Giancarlo Stanton to be paid less by the Marlins than guys like Jeff Mathis, Jon Rauch, and Juan Pierre. However, Trout’s not exactly struggling to pay his bills, and high quality pre-arb players can get large guaranteed contracts early in their careers by selling some of their free agent seasons at reduced prices. By creating a class of players that are both excellent and cheap, MLB’s pay scale gives low revenue teams a chance to build winning rosters even on a shoestring budget. Taking that path to success away isn’t worth the increased fairness of flattening the pay between rookies and veterans.
Dave is the Managing Editor of FanGraphs.
If Trout signed a big $100MM contract and fell off a cliff and never hit above .200 or hit more than 2 HRs total over 10 years, would his agent be out there talking about how unfair THAT contract is to the team? Of course not.
Or, if say the Angels were randomly generous and gave Trout a raise to $5MM this year, when it came time for arbitration, would his agent say, “Nah, we don’t need a raise, they’ve already given us enough” or would he start at that $5MM number and try to work upwards from it?
That’s a straw man. Agents always try to get their players the most money but that doesn’t take anything away from an argument over whether pre-arb players are paid enough.
@ Gosling.
I wasn’t commenting on what is an appropriate figure for pre-arb players. I was commenting on the general notion of “fairness” that was espoused. Given that fairness is a call for equity in the world, the first rule of equity is that one must have unclean hands before demanding equity be done.
Trout is underpaid now. The odds are, he will be overpaid at the end of his career.
That’s not a straw man argument at all. Don’t be an armchair logician just because you disagree, especially if you don’t know what you’re talking about.
When the player himself is saying it’s no big deal it just means the agent is upset that his 10% is 50k instead of 500k. Agents are worse than scum.
Act5ually, everything I’ve heard about Mike Trout (from dad’s of players that have played against him) is that Mike Trout (or Michael)won;t say anything bad about anything.
A player coming out and complaining about 500K at age 20 given the country’s economic situation may experience some backlash they did not intend to receive. So, even if he felt it, he might not say it. His agent on the other hand … well, that’s just doing his job.
The payscale is unfair relative to baseball, but each alternative presents problems as well, which can create “unfair” situations too.
My 11yo son asked me if I thought it was unfair that Trout only gets 500K. I said, “Compared to other baseball players, yes, it’s unfair. Compared to everyone else, it’s probably not. 500K to play baseball is a lot of money.”
You are dead wrong. Everything Trout’s agent is saying is at the direction/approval of Trout. If you don’t believe me, consult the definition of “agent.”
If you go and consult the definition of “agent,” you’ll see that it means one with authority to act for a principal on some subject, but generally without specific and detailed instructions for how to advance the principal’s interests. Indeed, the general practice of giving agents a lot of discretion is what distinguishes them from “employees.”
Now, Trout absolutely could tell the agent to say one thing or not say another, and if the agent didn’t agree, Trout could fire him. But there is no reason to think that any statement the agent makes on Trout’s behalf or concerning Trout’s salary is pre-approved by Trout; indeed, that would be a really uncommon way to use an agent.
The subject on which Trout’s agent acts on his behalf is his baseball career, which is what this concerns. This complaint came straight from Trout. He used his agent for his image. Make no mistake, no agent is going to create a fuss over his client’s pay without said clients approval. It just doesn’t happen that way. Agents in baseball do their clients dirty work.
The Arod/opt out during the world series is a classic example. Arod absolutely told Boras to announce his opt out during the world series. Then when it turned into a nightmare, Boras took the blame, but in reality he was acting on orders from Arod. Your client is Mike Trout, he is going to make you millions. You are going to go talk to the media about his contract without consulting him? That’s effing crazy. There is a good chance this was Trout’s idea, but there is a 100% chance Trout gave his approval.
I agree that it’s unlikely (though certainly not impossible) that Trout’s agent would embark on a mini-campaign against the Angels without consulting Trout first. But your statement that “everything” the agent said takes place “at the direction/approval of Trout” assumes too much. It is entirely possible, even likely, that Trout and his agent discussed and Trout approved the broad outlines of a media strategy, and that the agent’s statements went past what they discussed. That’s why he’s an agent, rather than a secretary who simply types up a statement dictated by Trout.
Now, if Trout lets things lie here, I think people are justified in saying that whether or not he approved the statements in advance, he basically adopted them after the fact by sticking with his agent and not contradicting the statements the agent made.
Good, a bunch of Mike Trout fan bois and people who have no clue what they’re talking about are here. Pats on the back all around.
I like when people see that sentiment is going against them and they opt for the “defiant” route. “I couldn’t possibly be mistaken! DOUBLE DOWN!!”
It could never be that they’re *gasp* just wrong. The problem is always with *everyone else*. ALWAYS!
Any time you say something bad about the team or player that is the subject of an article, you are likely to get down voted, as their fans disproportionately click and disproportionately care about comments about their team or player.
Also, I’ve personally spoken with a sports agent about this and have talked to other people who have as well and I am 100% positive that I am correct. I’d wager my life savings to a bag of nickels. Listen to comments from former players about this and they don’t even refer to Trout’s agent; they say “Trout is upset about this.” That’s because they know what many people here refuse to understand.
And I have admitted I was wrong several times; but only when there was some reason. The argument that Trout was not involved with this is flat Earth thinking.
You honestly believe that rotowizard is correct that this statement is because the agent is upset about his cut? That’s retarded.
DOUBLE DOWN!!
I believe that players remember the way they were treated or how they feel they were treated and valued. It is terrible PR to low ball a unique asset like Trout. Giving him a $75000 raise after his contributions last year and leaving him in center field would show him the respect he earned. 75k is not a significant percentage of the Angel’s total salary expenditures but it is a significant raise over his base salary and thus would actually be giving him something. He is one of the most valuable assets in baseball and like other valuable assets it makes sense to protect and covet them.
While it is true that he will still try and extract the best deal possible when they negotiate later in his career it is always good business to have neither side bitter and both sides showing the other some modicum of respect.
I agree with the raise, I don’t agree that he should stay in CF. They have a real defensive asset in Bourjos and they need to play him in the position that maximizes his benefit to the team. That is in center.
I think there is a middle ground that is much closer to Trout’s position. a $20K raise just seems petty (4%). Particularly in after tax dollars.
If they had just done 100K they probably would have engendered a lot more good will.
“…fell off a cliff and never hit above .200 or hit more than 2 HRs total over 10 years, would his agent be out there talking about how unfair THAT contract is to the team? Of course not.”
Well of course his agent wouldn’t. But would the team? Not an exact parallel because of the steroid issue, but please see A-rod/Yankees.
Does the team agree to the 10yr $200MM deal or does Trout use his right to exercise that contract from them?
And the cream of the young stars could sign for enough money right now. If Trout went to the Angels and said, give me $100 million for ten years, they’d probably do it. Even if he signed for $50 million over a decade, he’d be set for life.
Oh, I don’t hear the agents crying “injustice” when an aging veteran contributes negative value and is paid millions for it.
I’m unsure about your specific figure, but he could definitely negotiate an 8 figure guarantee of some sort if he wanted.
I think you misunderstand how economics works. If you pay more at the low end it only impacts those greedy fat cat owners who have to nothing to do with it otherwise but light cigars with it or build giant money hills for their overprivileged grandchildren to sled down.
I think you are operating under the flawed assumption that owners have unlimited funds. for the most part they run their teams like a business, meaning they have a set budget for player (employee) payrolls like anyone else so they can acheive a profit. to raise the minimum wage by such a material amount certainly means you have to make cuts elsewhere to maximize profit
If they had unlimited funds, the money hills would be much higher and would probably require ski lifts.
agree … dave’s analysis is littered with assumptions that he doesnt validate. most importantly that total $ spent by teams is finite and that an pre arb rates are a wealth transfer from younger players to older players rather than from young players to ownership.
Bob Nutting has a giant money hill? Someone please tell this man that he has a money hill!
“The luxury tax and revenue sharing have done some good work in helping lower revenue clubs to be more competitive.”
But have they? 9 of the last 10 World Series winners were in the top half of MLB in payroll. 5 of those were in the top third. I think it’s largely unanswered whether revenue sharing has helped or hurt the lower revenue teams…for some of them, it isn’t clear that they’re even spending that money; didn’t MLB have to install a minimum salary clause to receive those funds (or otherwise show it’s used to improve the team)?
I agree that revenue sharing needs changes, but that is not the topic of discussion here.
Didn’t say it was. I was indirectly asking for support for a statement Dave made.
Fair enough. I retract my comment.
I think there’s a selection bias here. I don’t believe it accounts for all of the income disparity between the champs and the losers, but to some extent the higher payrolls are the result of a team that is “going for it” versus a team that is wisely not spending extra when it won’t get them anywhere. It makes total sense, regardless of the salary structure in the league, that winning teams are paying more for their personnel. They are winning because they pay more, but they’re also paying more because they’re in a position to win. Should it not be this way?
Bad move by the agent. Nobody wants to hear athletes or their agents complain about their salaries, even when they’re a tiny fraction of a fair market value. Trout can tide himself over with endorsements until he hits his big baseball payday. I can’t help but think I should have seen more of him this offseason than five seconds of a Subway commercial.
thanks for this. if i needed to read another several hundred words about this subject i’m glad they were nuanced and thoughtful. I do think the hype around the mike trout-pay affair overlooks a few things, namely first that trout’s not complaining because his earlier-than-average career start gives him much greater potential to be paid at or over value for most of his career, and second that the real gaps in fairness are in minor league vs major salaries (would be interesting to see that compared to other sports, since other US sports don’t tend to have as deep of a minors system) and in the contracts awarded to foreign players vs draft picks. The new CBA had a big impact on the 2nd issue, though. Still it’s strange to think Jorge Soler will make more than 3x as much money in 2013 than Trout or Stanton.
One other issue with this article is that it means it’s less likely Wendy will write about it now. Which I hope is not the case because her insight on this kind of thing is always a delight to read.
Could Trout decice not to play for the angels and instead play for more money in Japan?
I think the posting system goes both ways. So, no, no more than he could go and play for the Yankees without the Angels’ consent.
Posting system does not go both ways.
Right. Because Japanese baseball pays so well. Thats why Darvish is in Texas.
Seung-Yeop Lee was the highest paid player in NPB in 2010. He made $6.6 million. Trout could probably make more. The Angels would probably sue him for breach of contract, and at the very least he’d probably owe them part of his signing bonus back. But he’d still come out ahead in the short term. In the long term the Angels probably would still own his US rights and could still offer him $500K (or whatever the minimum happened to be) if he wanted to come back.
In practice I’m sure NPB wouldn’t want to antagonize MLB by signing Trout.
If young players weren’t so cheap, wouldn’t teams be more likely to pay someone who has played in the Big Leagues instead of looking to their system for a potential replacement? How many players are getting the opportunity to play just because they are a cheaper alternative? MLB could become and old man’s league with little talent infusion due to young players costing more. I’m sure the Angels would like to sign Trout to a Longoria like deal, which he can still do, so if the agent doesn’t like the renewal, work out an actual contract extension.
I wish his agent had been more specific. If he thinks the Angels should “pay him what he’s worth,” he should stop taking stupid pills. If he think they should have thrown him a little extra, as in not pay him exactly how they would if he were merely an average player in 2012, then he has a point.
He also has a lot of incentive to do whatever he can to keep his lottery ticket happy and show that he will fight for him. Trout could net this guy eight figures.
I would like to see something like the NFLs performance pool instituted – a set of money held centrally dished out based on agreed performance measures compared to contract. This would reward guys like Trout whilst not harming the clubs looking to young cost controlled players.
A guy would have to be homeless and almost starving to live in Anaheim on only $510,000. If I see Trout on the streets, I will throw a nickel in his cup.
I lolled
In the real world $500k is a salary 99% of the population will never see. Trout only needs to do half of what he did last year (5 WAR per year) to be a very rich guy someday. Injuries that totally end a career have diminished due to modern medicine. All in all, Trout’s future seems bright. Fair seems to be relative.
” The NFL’s league minimum salary is just over $400,000 for a rookie, and a player with one year of service time has a minimum base salary of $480,000. The rookie minimum in the NBA is $475,000, though their pay scale escalates a little quicker, with a second year player making $762,000. The league minimum in the NHL is $525,000, and is set to rise to a grand total of $750,000 by the expiration of their brand new CBA, which covers the next 10 seasons”
These are flawed comparisons because in those leads, the rookies can be paid much more the first year. the league minimum is not a maximum in NFL, NHL, NBA.
Also this article fails to mention draft money that some of these players receive. Trout got $1.25M. Tons of these promising players get big bucks and never become MLB players.
It’s not a worthless comparison. Trout is being treated like an exclusive-rights free agent in the NFL. Those players are indeed at the whims of their team just like he is. The difference is that exclusive rights free agents are guys who weren’t expected to make the team. Drafted players (who make up the extreme majority in the NFL) sign a contract that covers their first 3 to 5 years. The NFL also has a rookie wage scale now, so players also have no leverage.
But the difference is that NFL minimum wage increases more rapidly than baseball does. In 2012, Rookie minimum was $390K, Second year minimum was $465K, 3rd year was $540K, 4th year was $615K. After that you’re either good enough to sign a new contract worth more than that, or you’ll be replaced by a younger draft pick already under contract.
So that’s the real problem baseball has, is that the minimum wage for players who have between 0 and 3 years of service time should show a larger increase.
This system is set up not just to compensate seniority but also to help pay for all the failure that is part of doing business in MLB. Trout is exceptional, most players drafted, even in the first round as he was, are a waste of signing bonus and even a minor league salary. Most don’t make the bigs or, if they do, for just a “cup of coffee.” The clubs have to make up for these loses somehow.
The compensation rules work even if they don’t seem fair, in aggregate they are fair. If the teams go under no one gets payed.
I would be interested in seeing a calculation of the minor league salaries, signing bonus money, other costs of doing business seperate from the major league salaries. Seems this info is not readily availible??
Sports economist Andrew Zimbalist is a good source for this line of question. http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=4068%3Alwib-reducing-the-cost-of-player-development-an-alternate-view-on-competive-balance-tidbits&catid=67%3Apete-toms&Itemid=155
If player development cost each team on average 20 million a year, divide that by the number of whatever useful players, (as trade bait or actual MLB production), and it’s not all that cost efficient. Unless, a team produces a few Trouts on a regular basis.
By the way, according to Baseball Reference, Grady Sizemore has earned $28 million over his career. That’s not so bad.
Compared to Beltran, it is. And it wasn’t long ago that he was looking forward to a Beltran-like contract.
You can live well with Sizemore’s earnings, but after agent fees, taxes, etc, it’s no sure bet that the next few generations of Sizemore’s can live like kings.
Why the hell should they? They didn’t work for it. Nepotism sucks.
Be sure you turn down any inheritance you might possibly receive then, and give all of your earthly belongings to charity rather than any children or family members. After all, nepotism sucks!
FWIW Albert Pujols made $600,000 as a second year player 11 years ago. That was twice (or maybe three times) the league minimum. It kicked off a pretty cordial relationship with the Cardinals that led to him signing away five years of free agency at a bargain price.
So a team could always go that route.
http://sports.espn.go.com/mlb/news/story?id=1738364
>Last month, Pujols said he wanted a long-term contract from the Cardinals. Asked whether he would give the team a break in price, he said no.
>”What do you mean?” Pujols said during the Cardinals’ annual winter fanfest. “This is business. There’s no break here.
>”You try to get what you deserve and that’s what I want. I’ve taken care of my business in the field the last three years and hopefully I get treated respectfully, that’s all I ask for.”
This contract came in the middle of Pujols trying to break arbitration records. As nice as the contract turned out, it was the result of Albert needing financial security, not of some cozy relationship the front office had earned by paying him a little extra.
You don’t what role tripling his salary played in the negotiations. Maybe nothing, maybe something. It couldn’t possibly have hurt.
I think Albert knows what role it played, and his quotes give a pretty clear indication of it as well.
that contract was team friendly no matter what he said
I read in another article (unfortunately I have lost the link) that the average pay raise for ROYs over the last decade was 27%, is there truth to this? what does trout make in comparison to Kimbrell, Bruce on his rookie deal, Heyward? What does he make in comparison to guys who signed major league deals after being drafted like Harper or Strasburg? what does he make in comparison to foreign signees who broke in at similar ages like Profar, Andrus, Cano and Beltre on their rookie deals? Ive been noticing a distinct lack of comps who aren’t named Giancarlo Stanton (plays for the cheapest cheap bastard owner in baseball who doesn’t give two morning sausages about the morale or loyalty of his players)
I have to assume guys like Trout have massive amounts of insurance in case of injury. If I were in his position I certainly would buy as much as I could. article talks about insurance for teams but does not mention players. Is there any data about this?
When you say “insurance,” are we talking about long-term disability insurance? So that if he can’t work, he receives something like X% of his annual salary or Y dollars in an insurance payout?
I would guess that the premiums for insurance like that for professional athletes would be pretty steep, since their jobs are so injury-prone.
The premiums would probably approach his current salary.
If the Angles were to give Trout more than the minimum raise, they would need some sort of good-faith commitment that the player (or his agent) would give credit for that and accept something a bit less come arbitration time.
I think most fans would like to see contracts that are incentive laden and pay for performance. Veteran players want no part of that, but young players may be all for that.
It’s a great idea, but getting s a few million worth of insurance probably costs at least 10% of that, given the rate of injury among professional athletes.
It would be a lot easier to just go to the team with a team friendly, back-loaded deal, since many players don’t have the money necessary to pay the premiums on such insurance.
Whenever I read an article of this sort (dealing with perceived “fairness” of player pay), I am always surprised by the number of comments that point out that whatever said player is making is more than enough to “live on” and how the person commenting does not “feel sorry” for them.
While I understand the populist side of the coin, where those who comment will most likely never see a half-million salary in their lives (let alone one of the recent Greinke/Votto/Fielder behemoths), I think that such an opinion fails to see a rather obvious factor in all of this: Baseball is already flush with money, big money, and now we are only arguing distribution. This distribution boils down to player vs. organization (let’s not forget that the team is rich, too), and every dime that is not held by a player is controlled by the club.
Accordingly, when we have a Trout situation, every dollar not paid to Trout is a windfall to the club. I understand the CBA influence and effects on competitive balance, and I’m not seeking to debate the merits of either. But why do so many people want to see the club reap the benefit of a player’s talents instead of the player himself? I know FG tends to bring a brand of armchair GMs to its pages (myself included), but why do we chide players for at least addressing a system that can be wildly unfair in certain cases, the Trout situation being one?
It’s the sloping street theory of income distribution. You live on street that slopes upward. The house at the bottom of the street is a shack and each house up from that is slightly nicer until you get to the top where the greatest mansion of all sits.
It’s been empirically demonstrated that people’s envy and attention are directed not at the house at the top of the hill, but at their neighbors. Mike Trout is a guy from New Jersey who is getting filthy rich playing a fun game. He’s our neighbor. Arte Moreno is the guy at the top of the hill, who, for some reason, we don’t concern ourselves with.
Excellent point. That certainly tends to be the case. And I know there is a significant level of obliviousness and/or cognitive dissonance at play to create such a reaction, but I watch baseball to see Mike Trout, not Arte Moreno. Give the money to the kid that entertains me, Jersey boy or not.
People don’t care if the team has money or the player has money, they simply care if their team wins. That’s it. Fans tend to look at the amount of money that will be spent for on-field players and conclude (likely somewhat correctly) that there is a finite budget for on-field spending. Thus, it is not “if Trout doesn’t get a $1 his owner gets it” but rather “If Trout doesn’t get a $1 it can be spent on another player that will make the team better.”
I’m sure most Angels fans would like to see Trout get $20MM a year just because he’s a nice guy and good at baseball. But, they’d probably rather see him get paid $500K while the remaining $19.5MM goes to Hamilton, because it’s better for the team’s chances of winning (and thus the fan’s ultimate enjoyment) if the Angels have both Trout and Hamilton on the squad.
“why do we chide players for at least addressing a system that can be wildly unfair in certain cases”
Well, that’s the system that the MLBPA agreed to. It’s the same system that paid him $1.25MM just to show up, whether or not he even made it to the majors. And it’s the same system that will ultimately pay him $200-300MM (if not more) over the course of his career, if he plays up to his abilities.
If he’s worried about getting some extra money now, and he’s willing to trade it for some future earnings, I’m sure the Angels would be more than happy to sign him for the next 7 years. But it seems like he wants the extra money now, but doesn’t want to give up anything in the future.
What reason would the Angels have to sign Trout to a 7 year deal before arbitration unless it is massively smaller, to the point it is far too much of a trade to even consider? I see no reason they should consider it until near the end of his minimum salary days, that’d be dumb of the team.
It would be a deal based off of the amounts he would likely get, but smaller since they are taking on the risk of a guaranteed deal.
He might do it, even for less than he’d figure to get going year-to-year, if he’d like to be set for life financially no matter how his career turns out.
Why would they give him that deal now and not in at least a year since they have two years before arbitration? My question wasn’t about Trout doing it, it was about the Angels. They’d have to give him a very large underpay for it to be worth it, it seems to me.
They might do it now because they’d get a better price now than if Trout repeats his 2012 season.
It would be a Longoria-type deal. Evan Longoria signed a 6-year, $17.5 million contract (with 3 years of team options) 6 days after being called up. He got his guaranteed $17.5 million in case of career-ending injury, Tampa Bay got 9 years of below market value prices. If he hadn’t done it, he would have gotten the same Trout-type minimum for 3 years, then arbitration for several years, and finally free agency no sooner than 2014.
Is the salary scale system fair? No, not really, for the reason that it takes so long for an MLB player to get to free agency compared to…say, an NFL player. For example, Mike Trout was drafted in 2009 and, according to Baseball Reference, will not be free agent eligible until after the 2017 season, and is arbitration eligible in 2015. So from 2009-2015, Trout will make minimum salary. From 2015-2018, assuming he is not signed to a contract, he will make an unknown figure in arbitration based on performance we don’t know will be like. Only then, when Trout is 27 (Due to his birthday he is 21 but will turn 22 this year and will turn 27 before free agency starts), can he get in free agency. By comparison, Dont’a Hightower was the 25th pick in the 2011 NFL Draft(same draft position as Trout), and got a 4 year, 7.7 million dollar contract (AAV of about 2 mil per year) and will be eligible for free agency before Trout. In addition, the minimum in the NFL works differently than the MLB, since you can’t sign players to such cheap contracts for so long.
So is it fair? No…but it is also a necessitity due to the way the MLB is set up, with no salary cap or salary floor. Small salary teams would not be able to compete without these kinds of salaries, so remain they must for now.
*2012 NFL draft, typo’d.
Also NFL careers are a lot shorter than MLB careers. Players in the later years of arbitration get market value or pretty close to it as well.
Mike Trout was drafted out of high school. Dont’a Hightower already did his 3 years of “slave labor”, it’s called college football. Yes, Hightower would be 25 at his theoretical free agency, but he’ll have made that $7.7 million.
Trout got a $1.125 million signing bonus, he’ll get about half a million for each of his first 3 seasons, and I’d say he compares favorably with Adam Jones, who signed a $6 million contract for the 2012 season. Trout should easily surpass Hightower in total salary.
I definitely see where you’re coming from with the notion that underpaying a few studs frees up cash to pay closer-to or above-market value for free agents, or just the more general concept that under-priced assets create surplus value that can be assigned to other players, resulting in a better team, etc. And also, not to be nit-picky, I did make sure I said the dollars not doled out to players are CONTROLLED by the team, not necessarily pocketed by ownership.
I also accept the notion of the fan wanting to maximize their enjoyment by seeing their team win, but I feel like that view can lead to fans placing unfair or inconsistent burdens on players. The Trout vs. Hamilton example is a good one: presuming Trout is a better player than Hamilton next year (and if you’re a FG reader, you probably see this as likely), how fair are their respective salaries? Is Trout resigned to make pennies compared to Hamilton because of the CBA’s institutionally-solidified trade-off benefiting old over young? What if that system poorly handles Trout and his relatively unique situation, one for which the CBA didn’t really plan for? Why didn’t Hamilton sign for cheaper, so they could pay Trout? If you were Trout, wouldn’t you take issue with all this? If you were the most productive member of your office, factory, law firm, etc., yet were compensated the least because you were “new”, wouldn’t that wear on you to the point you would consider raising the issue of your pay? Should we really take issue with Trout’s (or his agent’s) stance on a minimum raise from an already severely depressed salary?
All in all, the underpaying of a premium player to create a better on-field product is fine, but there’s still a very ugly issue of who is underpaid to make that goal a reality, and the corresponding fairness of that decision.
This was a response to MrKnowNothing, and had nothing to do with the NFL comparison.
I think most people accept that when they’re first starting out, they’re underpaid. That’s just the nature of life when dealing with salaries and such.
The alternative would be for players to get paid after the season and based on their performance. And I guarantee none of them want that to happen.
” If you were the most productive member of your office, factory, law firm, etc., yet were compensated the least because you were “new”, wouldn’t that wear on you to the point you would consider raising the issue of your pay?”
But if there was a pretty rock-solid agreement in place between your union and ownership, one can you really do? He can’t go to another MLB club without being traded and if he’s traded, it’s not like he’s going to suddenly get him market value.
His options for making more money sound like playing in Japan or signing a long-term deal that trades $$ over the next X years to reduced risk.
You might also be OK with it if you knew your salary would rise massively in the near future, as long as you continued to perform.
Mike Trout has a very specific skill set, and he ought to be grateful that it is what it is.
His skill set can only be maximized working for one company(MLB rather an individual club) that company made him a millionaire at an age where most prospective Doctors, Lawyers or Hedge Fund Managers are waiting to get into undergrad.
If Mike Trout stays healthy and continues to play in the universe as his rookie year he will be MLB’s first 35+ AAV FA(even 40 is possible). He has an outside shot at half a billion dollars without ever employing another person, making a payroll or working for free.
I agree that Trout would make a more fair check if all players got one year contracts, but his time will come.
He’s not necessarily a millionaire. Millionaire is defined on how much money someone has, not how much someone got paid. He got a $1.215 million signing bonus in July of 2009, and he made something around $500K last season. I don’t know all about his potential purchases, but a news article references his Mercedes AMG and his Toyota Tundra, both purchased sometime after the signing bonus. That’s at least $80K worth of automobile right there. The same article mentions paying for a remodeling of his parents basement. It’s entirely possible that he will have less than one million dollars to his name until he reaches arbitration in two more years.
between endorsements and 1.712 million in salary he should be close if not over 1 mil in net worth.
I’mmot at all an Arte Moreno (LAAA) fan, but does anyone really think that he’s a cheapskate? This agent/owner posturing is all a prelude to a somewhat team friendly deal that might buy a one or two of Trout’s arb years.
I’m just glad we don’t give this much attention to teacher’s salaries.
We should fund education more and probably get rid of tenure and create a more merit based pay scale for teachers. However lets be honest, it’s easy for teachers to do the bare minimum and the supply of teachers keeps the cost down.
(sarcasm)
You must not live in Wisconsin.
A significant increase in the league minimum would have both a wealth and a substitution effect, as they say in economics. Dave is talking about the wealth effect: an increase in salary for one group, means less money to go around for other groups. But the substitution effect may be equally important or even larger. As the cost of young players increases, veterans become more appealing. In the extreme case, teams may decide to invest significantly less in their minor league systems because they simply don’t get enough return on investment from home-grown players. The league minimum probably benefits veterans through the wealth effect, but it is also a huge subsidy to minor league investments, which also keeps down veteran salaries.
Unfortunately though, after 3 years was mart fans don’t go to Costco and them after 6 to google. I get what you’re saying but it’s not quite the same.
While a pallet scale may not be as accurate at measuring product weight because it is designed to weigh much heavier weights, it may be better at withstanding a jolt from a forklift operator. A jolt to a shipping scale may damage the scale’s percision measuring capabilities.
Wut
How much is Trout already getting in endorsements? I don’t know of many rookies other than Harper who get decent endorsement gigs.
He is now on board with White Castle, Whattaburger, AND In-N-Out!
Basically his Agent needs to shut it. He reaps the rewards whenever one of his clients signs a bloated multiyear contract to a 33 year old guy who can barely play first base for 3 or 4 times what he is worth as a guarenteed contract, he cant complain when the opposite happens. Agents should probably think twice before speaking on this issue because if “paying what they deserve” is really what they wanted, they would have NFL style performance contracts that can be voided at any time and leave their clients (and themselves) out to dry when they fall of or get injured.
There’s a specific reason the union has the pay the way they do, and its because they are able to get guarenteed money this way. They dont want younger guys making the most money, because it marginalizes the vets and they dont get multi year deals in their mid 30s. This doesnt stop the Angels from being smart and trying to predict the future market of Trout and get some of his arbitration and maybe free agent years on the cheap now, as a matter of fact thats what they really should be doing considering how much money the team has.
Young talent is always given compensation that is disproportionate to their contributions, not just in baseball, but in every type of hierarchical organization. Just ask any young accountant, lawyer, or apprentice in any trade industry.
Fairness is a principle and should not be confined to a specific set of facts. If it takes extreme examples of some of the most talented young players in the game, performing at elite levels but not getting compensated as such, to prove the salary scale as unfair, it probably isn’t unfair. Generational talents get vastly underpaid under the salary scale, and Trout getting another 100k from the Angels wouldn’t change that.
I don’t think you’re right that the pay reduction would come from veteran players.
Clubs, presumably, pay veteran players up to the marginal revenue the veteran brings them. Clubs don’t come up with fixed payrolls and decide how to distribute it, the level of the payroll is variable.
I guess if veteran players and rookies were strong complements in production, you could argue that an increase in rookie wages would decrease the wages of veterans, but I don’t think that would be the dominating effect.
The ‘offset’ from the increase in the minimum payment would be from the farm system. If a ‘successful’ rookie provides 1.5M less surplus value (Assuming a .5M -> 1M raise), then clubs will spend that much less (in present value terms) in trying to develop a successful rookie. Signing bonuses would drop, scouting budgets would be reduced, there would be less player development, etc.
It doesn’t have to be an increase in the minimum wage, by the way. If he wasn’t locked into playing for the Angels for 7 years (or until they decide they don’t want him anymore), he could bargain for something better. Replacement level players playing for league minimum don’t have that luxury, so their salaries would remain unaffected.
I’m sure the Angels would be happy to hand him a check for $5M tomorrow if it came with an Evan Longoria-like deal.
If I was Trout I would fire my agent for saying anything publicly at all. I am glad that most of the revenue from MLB goes back to the players, but nobody wants to see someone complain about making half a million dollars. Trout is making 25 times what an average 20-something American earns in a year.