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Diam⚾️ndBUZZ: OCTOBER 13, 2024

The Explosive Rise of MLB Superstar Salaries Over 50 Years

In the 1970s, Major League Baseball (MLB) superstars earned salaries that, by today’s standards, seem modest at best. The average salary for an MLB player in 1970 was just $29,303, with top players like Hank Aaron and Willie Mays earning around $200,000. Fast forward to 2024, and we see players like Shohei Ohtani and Aaron Judge signing contracts worth hundreds of millions of dollars, with annual salaries exceeding $40 million. This staggering increase in superstar compensation begs the question: how did this happen, and how can MLB team owners afford to pay these astronomical amounts, despite declining attendance?

The Math: Salaries Then vs. Now
To truly appreciate how much salaries have skyrocketed, let's break down the numbers. In 1970, the top MLB player salaries hovered around $200,000 annually. Today, superstars like Aaron Judge are earning more than $40 million per year. That’s a 200-fold increase in salary over just 50 years.

The Evolution of MLB Revenue: How Did Salaries Rise So Much?

The rise in salaries comes down to a few key factors:

Television and Media Deals: One of the biggest revenue drivers for MLB has been broadcast rights. In 1970, local TV deals brought in modest income, but today, national broadcast and streaming deals with networks like ESPN, Fox, and regional sports networks bring in billions of dollars annually. MLB has also embraced streaming, tapping into new digital revenue streams that didn’t exist decades ago. The influx of media money has provided owners with the capital to offer unprecedented salaries.

Merchandising and Sponsorships: Licensing deals, merchandising, and sponsorship agreements have grown exponentially. Teams now rake in millions from branded merchandise, corporate sponsors, and partnerships with global companies. The global reach of MLB merchandise and the rise of corporate branding on stadiums, jerseys, and broadcasts have added millions to team coffers.

Revenue Sharing: MLB’s revenue-sharing model allows smaller-market teams to remain competitive and afford higher payrolls. Larger-market teams contribute to a pool that helps balance the financial disparity between teams in smaller markets and large markets like New York or Los Angeles. This system has helped more teams become financially viable, allowing them to participate in bidding wars for top talent.

Luxury Suites and Premium Seating: While general attendance has declined in recent decades, MLB teams have found new ways to monetize fans with premium seating, luxury boxes, and high-end fan experiences. These premium offerings command significantly higher prices than regular seats, offsetting the overall decline in attendance.

International Markets: The globalization of baseball, particularly in markets like Japan, South Korea, and Latin America, has expanded MLB’s fanbase and revenue streams. International television deals and the sale of international merchandising have given the league access to a vast pool of revenue.

How Teams Afford Superstars Like Shohei Ohtani and Aaron Judge

Despite the decline in attendance over the last 20 years, MLB’s revenue sources have diversified significantly. Teams no longer rely solely on ticket sales to stay profitable. Here's how MLB teams can afford massive payrolls:

Broadcast Deals: Television and streaming rights generate billions of dollars for the league. Even when stadiums aren’t full, TV contracts ensure teams are making money, as baseball remains a popular television sport.

Luxury Taxes and Revenue Sharing: Teams like the New York Yankees or Los Angeles Dodgers, who frequently exceed the luxury tax threshold, contribute to revenue-sharing pools, allowing smaller-market teams to remain competitive without needing sellout crowds every game. This system allows for high payrolls across the league without bankrupting smaller teams.

Corporate Sponsorships: Naming rights for stadiums, sponsorships on uniforms, and partnerships with corporate entities have opened up lucrative new revenue streams for teams. In some cases, these deals are worth hundreds of millions of dollars over time, providing teams with the financial freedom to offer massive contracts.

Projecting Salaries for the Legends of the Past

What if baseball legends like Babe Ruth, Ted Williams, or Christy Mathewson played in today’s MLB? Given their star power and statistical dominance, their salaries would be astronomical:

Babe Ruth: Often considered the greatest player in baseball history, Ruth’s dominance on the field would likely earn him a contract comparable to Shohei Ohtani’s due to his ability to both pitch and hit. Today, Ruth could command a contract worth at least $50 million per year.

Ted Williams: As one of the greatest hitters of all time, Williams would likely secure a salary in the $40-45 million per year range, similar to Aaron Judge’s current deal.

Joe DiMaggio: With his legacy, athletic prowess, and marketability, DiMaggio would likely be in line for a contract worth $35-40 million per year.

Christy Mathewson and Cy Young: As two of the most dominant pitchers in history, Mathewson and Young would likely command contracts equivalent to today’s top aces like Gerrit Cole, potentially earning $35-40 million annually.

What COULD MLB Salaries Look Like in 50 Years?

If MLB salaries continue to grow at their current pace, we could see unimaginable figures in the future. Based on the historical trends, it's possible that by 2074, top players could be earning $200 million per year or more. With new technologies, expanded global markets, and further monetization of the sport, the ceiling for superstar salaries will continue to rise.

However, there are also factors that could slow this growth, such as changes in media consumption habits, shifts in fan engagement, and potential economic challenges. If MLB can continue to innovate and expand its reach, there’s no limit to how much top talent could be paid.

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