Fansided

MLB Revenues Rise to $10.3B As Elite Players Remain Unsigned

By Manny Gómez |
LOS ANGELES, CA - OCTOBER 27: A general overview of Dodger Stadium from the right field upper seats is seen in Game Four of the 2018 World Series between the Boston Red Sox and the Los Angeles Dodgers on October 27, 2018 in Los Angeles, California. (Photo by Ezra Shaw/Getty Images)
LOS ANGELES, CA - OCTOBER 27: A general overview of Dodger Stadium from the right field upper seats is seen in Game Four of the 2018 World Series between the Boston Red Sox and the Los Angeles Dodgers on October 27, 2018 in Los Angeles, California. (Photo by Ezra Shaw/Getty Images)

In 2018 MLB revenues rose to $10.3 billion. Meanwhile, elite players remain on the free agent market. What gives?

On Monday, Maury Brown, Contributor at Forbes, reported that MLB revenues rose to $10.3B in 2018. This, according to Brown, would be the “16th consecutive year MLB saw record gross revenues.”

Meanwhile, some of the games most elite players (i.e. Manny Machado, Bryce Harper, Craig Kimbrel, etc.) remain unsigned.

I know that we’re dealing with billionaires and millionaires, but this might be a sign of bad times to come for MLB. Owners continue to take more of the pie, and players – and ex players – are definitely taking notice.

A little over a month ago, Alex Bregman released a roundtable discussion he held with five other MLB players and Alex Rodriguez (aka “A-Rod”) called ” State of Baseball.” The overall health of the game was discussed, and Rodriguez does not mince words when he said:

“The thing that would upset me as a player would be, when I entered the game, it was a $1B industry. In 2001, it was a $3B industry, and today it’s $10B. Well, I signed a contract that made $25M at $3B. Today it’s a $10B… there’s no $75M player today

A-Rod is absolutely right. If we compare MLB revenues to team payrolls since A-Rod got his $25M a year deal, MLB revenues have gone up by nearly 3x ($3.58B in 2001 to $10.3B in 2018) while payrolls have increased by just a little over 2x ($1.95B in 2001 to $4.07B in 2018).

Another way to look at this is, in 2001 payroll as a percent of revenue was 54%. In 2018, that number has dipped to just under 40%. In other words, teams are investing less financially in players in 2018 than they did back in 2001.

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Take the New York Yankees for example. The earliest data I could find on the Yankees net worth is 2002. Well, in 2002, according to Statista, the Yankees were worth $730M, while their payroll, according to Baseball Prospectus, was $91.9M. Therefore, payroll as a percent of worth for the Yankees in 2002 was just over 12.5%.

Compare this to 2018, where, according to Mike Ozanian of Forbes, the Yankees net worth increased to $4B, while their payroll in 2018 was $166M. Therefore, in 2018, payroll as a percent of worth dropped to just a little over 4% compared to 2002.

What does this mean for MLB and the MLBPA?

Well, it means that when MLB’s Collective Bargaining Agreement expires in 2021, if the current trends continue, players might have to strike. The last time baseball saw a strike was 1994, and that resulted in the cancellation of the World Series for the first time since 1909.

Next. Relief options for the Cubs. dark

With baseball’s popularity continuing to dip – basketball has officially overtaken baseball in popularity according to Gallup – a strike could potentially destroy America’s pastime.

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