As more of a baseball fan, seeing NFL contracts is kind of crazy. Just this offseason multiple players were signed to $300 million, 10+ year contracts, all of which is guaranteed. While I'm no expert on sports economics, I'm guessing this is partly due to the lack of salary caps in MLB and partly due to the fact that the MLB player's uni…
As more of a baseball fan, seeing NFL contracts is kind of crazy. Just this offseason multiple players were signed to $300 million, 10+ year contracts, all of which is guaranteed. While I'm no expert on sports economics, I'm guessing this is partly due to the lack of salary caps in MLB and partly due to the fact that the MLB player's union is much stronger. Still, it always surprises me how NFL contracts are smaller (even at a higher AAV) for a league that is more popular.
Definitely those things, but also rosters are much smaller so there's fewer people to pay, and while on a per-game basis the NFL dwarfs everybody in gate receipts and advertising revenue, MLB has ten times the number of games that the NFL has and thus that many more opportunities to make money.
Another piece with MLB is the money made off regional cable TV contracts, where a team can guarantee 162 games of content each year that can only be seen on one TV station in regional markets that can be geographically quite large (which eliminates legal streaming on mlb.tv within the borders of that market). That might be falling apart a bit with Bally Sports going under, but we'll see how it shakes out soon.
Baseball *also* has a similar problem squeezing guys out in free agency, at least below the top-tier players and five or six opulent teams - though it was more pronounced three or four years ago. The incentive structure, with TV contracts and luxury tax kickbacks taking up so much more of a team's revenue than gate and concessions, makes winning less impactful on a team's bottom line than ever - so why spend?
As more of a baseball fan, seeing NFL contracts is kind of crazy. Just this offseason multiple players were signed to $300 million, 10+ year contracts, all of which is guaranteed. While I'm no expert on sports economics, I'm guessing this is partly due to the lack of salary caps in MLB and partly due to the fact that the MLB player's union is much stronger. Still, it always surprises me how NFL contracts are smaller (even at a higher AAV) for a league that is more popular.
Definitely those things, but also rosters are much smaller so there's fewer people to pay, and while on a per-game basis the NFL dwarfs everybody in gate receipts and advertising revenue, MLB has ten times the number of games that the NFL has and thus that many more opportunities to make money.
Another piece with MLB is the money made off regional cable TV contracts, where a team can guarantee 162 games of content each year that can only be seen on one TV station in regional markets that can be geographically quite large (which eliminates legal streaming on mlb.tv within the borders of that market). That might be falling apart a bit with Bally Sports going under, but we'll see how it shakes out soon.
Baseball *also* has a similar problem squeezing guys out in free agency, at least below the top-tier players and five or six opulent teams - though it was more pronounced three or four years ago. The incentive structure, with TV contracts and luxury tax kickbacks taking up so much more of a team's revenue than gate and concessions, makes winning less impactful on a team's bottom line than ever - so why spend?