Friday, September 19, 2008

Why Do We Know Players' Contracts?

A friend posed the question to me over the weekend, "Why is it we know how much baseball players make?". It is a good question. Knowing how much players make alters how fans feel about them. A player making $10 million a year who strikes out with the bases loaded gets much more anger directed their way than a player making league minimum. Knowing how much they make skews our perceptions of players. We don't just look at them as simple ball players and just look at their physical talents. Instead we scale our opinion of them based on their paycheck.

But why is that? Aren't employment contracts private? I don't know what my friends and neighbors make, so why should I know how much baseball players make? Is there a legal reason these contracts are made public?

Well, the question mark key on my computer is starting to wear out, so I'll stop posing the questions and start answering them. But first, I want to give a thanks to Jeff at Cot's Baseball Contracts for helping with this investigation. If you have not visited Jeff's site, you should - it is the best source for MLB contract information I've seen.

The first answer is, no. Baseball players' contracts are not public. All of MLB's financial information is private, but certain information inevitably leaks out, and in some cases, is offered up. Teams are required to share player salary information and supply that information to both MLB and to the Players' Union. This process puts the information in the hands of numerous people, too many to keep it under wraps. Many people consolidate this information and publish it for us, like the USA Today Salaries Database. They indicate this data comes from the MLB Players Association, club officials, and documents files with MLB's central office.

There is a strong public desire to know this information. So, rather than fight a losing battle, MLB actually makes public all players' salaries on opening day rosters. So, while technically the information is private, no one is bothering to keep it private. Another leak comes from agents. Agents who sign players to big contracts are very excited to share their success with the world. Makes them look good, boosts their client's ego, and helps attract more business.

The one thing we do not generally know, unless it too is leaked, are any particulars unique to a player's contract. There is a standard contract that is used for all players, but teams are free to add additional clauses to the contract. For example, Mike Lowell's current contract has a clause that states that he gets a suite in any hotel the team stays at while on the road. How do I know this? Mike actually tells us that in his autobiography, Deep Drive, which is a very good read!

So, we are not generally privy to a player's contract outside of the basic salary structure. Any additional information, such as incentive clauses, and extra perks, are either offered by a player or agent, or leaked by an insider. So, contracts are "private", but kept about as private as gossip at the local coffee shop.

Hope that answers your question, Bill!

6 comments:

the blue state blogger said...

Interesting information. Ballplayer salaries have always been made public, though, and always created controversy-remember Babe Ruth being asked why he made more than Herbert Hoover?

Rooster said...

Yes, that's right! That was actually what my friend's question was getting at. If we actually kept player's contracts private (truly private), we would have such a different (and better?) perspective to watch baseball from.

Imagine solely judging baseball games and players and teams by nothing more than how they perform, period?

Suldog said...

Well, aside from the stars (Ruth, Ted Williams, etc.) we never knew the salaries.

(Remember in "Ball Four" where Jim Bouton says that, as a kid, he assumed since Ted Williams made $100,000, then Junior Stephens must have been making $50,000 or something like that?)

Bouton himself made his salary public during negotiations in 1964 or 1965, since he wanted the fans to know he wasn't holding out for something outrageous. I think it was the diff between $23,000 and $21,500 - something along those lines.

Anyway, yeah, we'd all be better off if we didn't have a clue.

Rooster said...

I'm with you Sul. Hmm, I wonder when it started becoming common practice to publicize salaries?

Suldog said...

My guess is that the clubs started publicizing them as a way to let fans know why ticket prices were going up - and who to blame :-)

Rooster said...

That's possible. Might have had something to do with one of the later contracts with the players association or something. I think it is a way to monitor collusion or something, in terms of teams sharing the salaries with each other.