By Jacob Jablonski
The average salary of a MLB player has increased a lot since the early 2000s. This is rather similar to other sports leagues and makes sense with the increase in TV deals and other money making aspects of MLB and the teams. However the average player salary is not the best way to judge if players are making more or less. In 2021, the top 50 players were being paid 33.4% of the total player salaries and the top 100 players were receiving 52.4% of all the salaries. This means that the increase in the average salary doesn't really mean all players are getting paid more. This increases becauses of contracts like Mike Trout, Gerrit Cole, and Nolan Arenado who are all making over $35M a year.
I think that the median salary of a MLB players shows a more clear picture of what has been happening in the league more recently. The big contracts mentioned before like Mike Trout and Gerrit Cole really increase the average salary but there are still a lot of player who don't get paid anywhere near those amounts. The median salary has dropped nearly 30% since its record-high in 2015. In 2021, 62% of players on opening day rosters had a salary of under $1M and 35% had a salary under $600,000. The last Collective Bargaining Agreement (CBA) had the lowest minimum salary of the 4 major sports in the USA. In the recent lockout, the Players Association (MLBPA) wanted the CBA to drastically improve this number.
This graph is showing the Team Payroll vs. Team Revenue in the year 2013. This is the first year that the data I had gave and this is used for the benchmark when analyzing the difference in the two amounts over the course of ten years. I think this graph shows that most teams had spent around half of their revenue on their team payroll, so essentially putting a lot of money back into the roster and getting better players. In this year teams on average spent around 52.61% of their revenue on their team payroll. This is an important number to keep track of as we compare different years.
This graph is showing the Team Payroll vs. Team Revenue in the year 2018. This is 5 years after the previous graph and there are a few noticeable differences. First we can see that it appears that most teams seem to be making more money, which you would most likely assume in a year-to-year business operation such as a MLB team. With this we can also see that on average teams are spending more on payroll but we can also see that some teams are spending less on their team. To try and quantify this better we can look at percent increase and also look at the average percent spent revenue on team payroll. Team payroll increased by 31.26% since the first graph in 2013. Team revenue increased by 37.48% since 2013. This shows that on average revenue is increasing more than payroll. Also comparing back to the percentage spent on payroll, this year on average teams spent 50.23% of revenue on payrolls. This is down around 2% from 2013. Lets see how these numbers change more.
This graph is showing the Team Payroll vs. Team Revenue in the year 2018. This is 4 years after the previous graph and 10 years after the first graph. We can see similar changes in this graph from the last one, as we did in the first to second graphs. We can see that on average both numbers increase and that is something that we would come to expect. We can also check out some of the numbers like we did before to try and better quantify these changes. The first number to look at is the percent increase from 2013. Team payroll increased by 27.74% percent since the first graph that was shown in 2013 and it had also decreased by 2.67% since the second graph in 2018. Team revenue increased by 40.36% since 2013 and had decreased by 3.42% percent since 2018. Both of the recent decreases were greatly influxed by the Covid-19 pandemic. And comparing the revenue spent on team payroll has now decreased and is at 47.88%.
This chart tries to expand on the graphs of each year and averages out team payroll for all 30 teams. I think what we can see here is that in general the trend is that payrolls were increasing but hit somewhat of a plateau after around 2017 or 2018. This is defintely a good thing but this also comes as the top 100 players, like mentioned before, are making more and more money but teams are also opting for younger players to balance this out as they don't make nearly as much as veterans. There is now a new CBA and the pandemic is (hopefully) nearing the end, so in general you would hope to see that this trend continues and players started getting paid more in general and increase the same as the team revenue, which we will talk about next. We also can hope to see that young players start getting paid a more fair share for their worth.
This graph is very similar to the previous one but instead shows the average team revenue for all 30 teams since 2013. The first takeaway in this graph should be that it looks very similar to the player payroll chart except it doesn't really plateau after 2017 or 2018. This one looks like more or less that it would've continued to go up at a similar rate if it hadn't been for the pandemic. The growth of revenue should be following a similar trend to the player payroll and it doesn't really look like it was going to. The team revenue increased on average by 40.36% since 2013 and the player payroll only increased by 27.74% since 2013. Baseball was a sport that was growing in the US and team revenues were showing that. Most teams were reporting great numbers over this time period, some even during the pandemic, and it seems like a lot of players don't always see the benefit of this.
This graph shows some of the numbers that were mentioned previosuly in some of the explantations for the year graphs. This chart does a good job of quantifying the idea that teams were making more money but paying players overall less. While we can see that the covid year obviously was an outlier again, we can see the trend that the percentage had been increasing. It did rebound a little bit this year and that may be still an ongoing effect from the pandemic, or it may also be partly impacted by the new CBA as there were a lot of young players on Opening Day rosters and there were also many free agents who had to wait until after the lockout was over to sign contracts. Hopefully the trend of teams spending more on their roster continues and hopefully teams start spending more on their minor league players which is another whole issue by itsself.
Jacob Jablonski
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