After winning the Cy Young Award and leading the Los Angeles Dodgers to a World Series title in 1988, Orel Hershiser signed what was then the richest three-year contract in baseball history. The total value of Hershiser’s contract? $7.9 million.
The next two highest-paid pitchers locked in three-year deals shortly before the 1989 season, including Roger Clemens at $7.5 million, and Dwight Gooden at $6.7 million.
Of course in 2015, adjusting for inflation, these contracts would be worth more. U.S. Department of Labor statistics value each contract at $14.954 million (Hershiser), $14.196 million (Clemens), and $12.682 million (Gooden).
Even adjusting for inflation, these contracts don’t come close to what pitchers receive in 2015.
In fact, it’s safe to say if the Hershiser contract was proposed by any of today’s general managers to a super agent like Scott Boras, the counter-proposal wouldn’t be a number but a dial tone.
That dial tone is the 2015 MLB marketplace and it is a true bull market. With no clear sign of MLB salaries leveling off, comparing baseball today with Hershiser’s time leads us to four conclusions.
The first is how much more valuable (or expensive) a “valuable pitc
For example, 20 pitchers in Major League Baseball will make more in 2015 by pitching one season than Hershiser would have made by pitching three years between 1989 and 1991. In fact, Hershiser’s total contract – adjusted annually over three years to $4.732 million a year – would make him the 84th highest-paid pitcher in 2015.
Likewise, four pitchers in the last three years have received signing bonuses that more than double Hershiser’s total contract. Further, forge
The second development: Players are so valuable in 2015 that they shouldn’t be compared to individual player contracts like Hershiser’s, but instead the total value of the team itself in 1989.
Salaries have risen to such immense levels that players are no longer just players, but rather franchises within a franchise. Teams aren’t signing players, they’re merging with them.
Sound ridiculous? Take a look at the top 10 highest-paid pitchers in 2015, nine of which signed contracts in the last three years:
1. Clayton Kershaw: 7 years/$215 million (2014)
2. Max Scherzer: 7 years/$210 million (2015)
3. C.C. Sabathia: 8 years/$186 million (2009)
4. Justin Verlander: 7 years/$180 million (2013)
5. Felix Hernandez: 7 years/$175 million (2013)
6. Jon Lester: 6 years/$155 million (2015)
7. Masahiro Tanaka: 7 years/$155 million (2014)
8. Zack Greinke: 6 years/$147 million (2013)
9. Cole Hamels: 6 years/$144 million (2013)
10. Matt Cain: 5 years/$127 million (2012)
In comparison, according to Forbes, the average major league team in the 1997-98 season (when Forbes began setting value to the league) was worth $198 million – or a 2015 inflation-adjusted $285.5 million. Therefore, with a $215 million dollar contract in 2014, Clayton Kershaw, LLC, is near the average 1998 “franchise” total value himself and most likely would exceed the total franchise value of some or most teams in 1989.
When you include the salaries of current position players, some are indeed worth more than the average inflation-adjusted 1998 franchise. I’ve focused on pitchers due to the fact they only pitch every five days, but recent contracts have shown position players’ value is increasing by the year as well.
Here’s a look at the top 10 highest paid position players in 2015, eight of which signed their deals in the last four seasons:
1. Giancarlo Stanton: 13 years, $325 million (2015)
2. Miguel Cabrera: 10 years, $292 million (2014)
3. Alex Rodriguez: 10 years, $275 million (2008)
4. Robinson Cano: 10 years, $240 million (2014)
5. Albert Pujols: 10 years, $240 million (2012)
6. Joey Votto: 10 years, $225 million (2014)
7. Prince Fielder: 9 years, $214 million (2012)
8. Joe Mauer: 8 years, $184 million (2011)
9. Mark Teixeira: 8 years, $180 million (2009)
10. Buster Posey, 9 years, $167 million (2013)
That leads us to the third conclusion: Baseball franchises have increased exponentially in value even in the short time from 2014 to 2015. According to Forbes, the average baseball team in 2015 is worth $1.2 billion, a 48% increase from the average value of teams in 2014. That means if you owned an average baseball team a year ago, that same team is worth almost 50% more just one year later.
Despite these conclusions, one question remains unanswered. When will these monstrous MLB contracts level off?
Well, if league and team broadcasting revenue is any indication, not anytime soon. The league, which recently entered into a new broadcasting agreement, will receive a total of $12.4 billion over eight years, doubling the league’s previous deal.
Therefore, all indications show that there is no end in sight. With pitchers like David Price, Jordan Zimmerman, and Johnny Cueto set to become free agents next winter, there’s a good chance we see Kershaw’s deal topped.
Orel Hershiser should probably think about making a comeback.
(Kershaw image from Keith Allison)