Rising Major League Baseball Salaries, And The Essays -

Rising Major League Baseball Salaries, And The Rising Major League Baseball Salaries, and the Economic Effect it has on Competition and the Consumer. As long has there has been business, Management and Labor have warred against each other for a bigger piece of the pie. Major League Baseball is no different. In the early years of professional baseball the owners controlled the salaries of the players and decided where they could play and what they would be paid. The players were bound to their team by the Reserve Clause that stated, the services of a player will be reserved exclusively for that team for the next season. This resulted in keeping the players salaries artificially low because the players were not allowed to offer their services to any other team. The Reserve Clause was in effect for more than One Hundred years of baseball history. It was challenged several times but the owners had won every time, until in 1970 when the St. Louis Cardinals traded outfielder Curt Flood to the Philadelphia Phillies. Flood refused to play for the Phillies and sued to become a free-agent. Floods case was in court for several years going al l the way to the Supreme Court. He was never able to play in the Major League again. While he did not win his case, he laid the groundwork for a later case that involved two pitchers, Andy Messersmith and Dave McNally who filed a grievance against the league contending that, because they didn't sign contracts with their previous teams they were free agents. The owners and the Players Association agreed to submit to binding, impartial, arbitration in order to settle this case. On December 23, 1975 the arbitrator Peter Seitz ruled in favor of the players and the Reserve Clause was broken, and the era of free agency began in the Major Leagues. In 1976 when free agency began the average player salary was only $52 thousand dollars, but it has increased steadily ever since. By 1990 the average salary for a Major League Baseball player had risen to $589 thousand dollars. This Year baseball will start the 2001 season with an average player salary of more than $2 million, about 40 times high er than the typical wage in 1976 when free agency began. Average Major League Player Salaries 1976-2000 Year Average Increase/decrease Median1976 $52,300 --- *1977 74,000 41.49% *1978 97,800 32.16% *1979 121,900 24.64% *1980 146,500 20.18% *1981 196,500 34.13% *1982 245,000 24.68% *1983 289,000 17.96% 207,5001984 325,900 12.77% 229,7501985 368,998 13.22% 265,8331986 410,517 11.25% 275,0001987 402,579 -1.93% 235,0001988 430,688 6.98% 235,0001989 489,539 13.66% 280,0001990 589,483 20.42% 350,0001991 845,383 43.41% 412,0001992 1,012,424 19.76% 392,5001993 1,062,780 4.97% 371,5001994 1,154,486 8.63% 450,0001995 1,094,440 -5.20% 275,0001996 1,101,455 0.64% 300,0001997 1,314,420 19.33% 400,0001998 1,377,196 4.78% The constant rise in players salaries has created huge disparity in the overall, total payrolls of Major League teams, and it is getting bigger every year. In 1988 the New York Yankees had the highest team payroll at $21.5 million dollars and the Seattle Mariners payroll was the lowest at $6.5 million. The difference between the highest and the lowest was just $15 million dollars, but by the 2000 season the difference had increased to $97.6 million dollars. The Yankees again had the highest payroll at $113.4 million, and the Minnesota Twins payroll was the lowest at $15.8 million. Seventeen other teams had payrolls that were at least 50% less than the Yankees. This disparity has created a situation that has made it very hard for the poorer, small, market teams to compete for players and championships. In 1999 the eight teams that made the playoffs, the New York Yankees, Texas Rangers, Atlanta Braves, Cleveland Indians, Boston Red Sox, New York Mets, Arizona Diamondbacks, and Houston Astros, all ranked in the top ten in total payroll. Since the strike, in 1994, every playoff team except for the Houston Astros, in 1997, has been in the top half of the league in total payroll. The year 2000 was an exception to that rule. In 2000 the Chicago White Sox were able to win the American League Central Division with a payroll of just $36.98 million, and the Oakland Athletics won the A.L. West with a payroll of $32.17