Solving Baseball’s Bigger Spending Problem

Solving Baseball’s Bigger Spending Problem

April 5, 20192 min read

Major League Baseball spring training is underway and some of the biggest concerns about spending by teams headed into the MLB season have now been addressed, with roughly $1 billion spent on new player contracts within the last two weeks.

All-star outfielder Bryce Harper signed a 13-year, $330 million contract with the Philadelphia Phillies, the largest contract in MLB history in total value, though not per-year salary. The week previous, the San Diego Padres doled out $300 million over 10 years to Manny Machado. The Colorado Rockies also resigned Nolan Arenado to an eight-year, $260 million contract; the New York Yankees gave outfielder Aaron Hicks a seven-year, $70 million deal; and the St. Louis Cardinals starter Miles Mikolas received four years and $68 million.

But bigger problems persist for the MLB: Attendance is down, games are still too long, and the gap between the richest and poorest teams remains wide, leading to a lack of competitiveness from many teams.

Some economists say part of the competitive balance problem is the revenue sharing model used by the MLB. But not all economists agree that revenue sharing is broken, or even, the root of the problem. David Berri, professor of economics at Southern Utah University and the author of "Sports Economics" views a limited population of talent rather than revenue sharing as the primary reason for the competitive imbalance.

"Baseball was not competitive in the first half of the 20th century because the talent pool was restricted (only white males from the U.S. played). Racial integration and a global search for talent expanded the talent pool and made the game much more competitive," Berri said.

Dr. Berri has spent the last two decades researching sports and economics, while publishing works on a variety of topics including the evaluation of players and coaches, competitive balance, the drafting of players, labor disputes, the NCAA, and distribution of wealth and power. He is familiar with the media and available for an interview, simply visit his profile.

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  • David Berri
    David Berri Department Chair and Professor of Economics

    Specializing in evaluations of players and coaches in sports, gender issues in sports, and competitive balance in sports

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