Justin Verlander contract: The grotesque rise of baseball salaries reveals everything that’s wrong with the American financial system.
Why Do We All Just Accept That Baseball Salaries Are Appallingly High?
The stadium scene.
April 15 2013 5:30 AM

The Other Kind of Moneyball

The grotesque rise of baseball salaries reveals everything that’s wrong with the American financial system.

Justin Verlander of the Detroit Tigers looks on against the San Francisco Giants during Game One of the Major League Baseball World Series at AT&T Park on October 24, 2012 in San Francisco, California.
In the first year of his $180 million contract, pitcher Justin Verlander of the Detroit Tigers will earn $20 million—around 800 times as much as Detroit’s median household income.

Photo by Christian Petersen/Getty Images

I’ve been a Tigers fan since I was 11 years old, and I filled scrapbooks with stories about Alan Trammell and Lou Whitaker clipped from the Detroit Free Press. Hanging on my office wall is a framed photo of Kirk Gibson celebrating his second home run in Game 5 of the 1984 World Series. Last fall, after the Giants swept the Tigers in the World Series, I insisted their championship was as illegitimate as George W. Bush’s presidency, because they’d reached the postseason with the help of Melky Cabrera’s PED use.

You might think I would’ve been happy, then, when the Tigers signed Justin Verlander, the most dominant pitcher of this century, to a contract that will pay him $180 million over seven years. But it turns out there is a point at which my lifelong love of the Tigers, and of Major League Baseball, collides with my equally strong loathing of economic inequality. And that point is $25.7 million a year.

In 1972, the year I became aware of baseball, its highest-paid player, Hank Aaron, earned $200,000 per season—the equivalent of around $1 million today. Aaron’s salary was 18 times the median household income in the United States. This year’s highest-paid player, Alex Rodriguez, stands to earn $29 million, which is 580 times the median income. (In fairness, Verlander may be a more egregious example of inequality than Rodriguez, since he pitches in the nation’s poorest big city. In the first year of his new contract, Verlander will earn $20 million—around 800 times as much as Detroit’s median household income.)


Over the past 40 years—the period of rising economic inequality that former Slate columnist Timothy Noah called “The Great Divergence”—Americans’ incomes have not grown at all, in real dollars. But baseball players’ incomes have increased twentyfold in real dollars: the average major-league salary in 2012 was $3,213,479. The income gap between ballplayers and their fans closely resembles the rising gap between CEOs and their employees, which grew during the same period from roughly 25-to-1 to 380-to-1.

Comedian Joe E. Lewis once said that rooting for the New York Yankees was like rooting for U.S. Steel. And that was when Mickey Mantle was earning $60,000 a year—12 times the median household income. Now, rooting for any team is like rooting for U.S. Steel. Even the Houston Astros, whose 25 quadruple-A players will earn less money combined than A-Rod in 2013, have a higher payroll, in real dollars, than those Yankees of the 1950s.

I’m singling out professional athletes for my class envy because they’re the highest-profile beneficiaries of changes that have enriched those at the top of the economic order while impoverishing those at the bottom. The labor policies of the mid-20th century depressed the price of skilled labor while inflating the price of unskilled labor. Athletes’ bargaining power was constrained by the reserve clause, which tied a player’s rights to a single team for his entire career. At the other end of the labor market, unions represented 35 percent of private-sector workers and had their own political arm in the Democratic Party.

The deregulation of the American economy that began in the 1970s has increased the salaries of professional athletes enormously while reducing those of blue-collar workers. In 1975, pitchers Andy Messersmith of the Los Angeles Dodgers and Dave McNally of the Montreal Expos appealed to arbitrator Peter Seitz to strike down baseball’s reserve clause and allow them to sell their services to the highest bidder. The Seitz decision, which was upheld by the 8th U.S. Circuit Court of Appeals, began the era of free agency in professional sports. After increasing arithmetically for the first three-quarters of the century, salaries rose geometrically during the past 25 years of the 1900s and have continued to balloon in the 2000s.

Because the reserve clause was eliminated at the insistence of the Major League Baseball Players Association, the Seitz decision is considered a victory for organized labor. It wasn’t. It was a victory for the laissez-faire marketplace.

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