The 1994-95 MLB strike was seen by fans across the country as a fight of “billionaires versus millionaires,” and we just might be in for a repeat: That phrase is showing up again in news articles and opinion columns about baseball’s present labor dispute — and even in stories about Little League returning to action. If players and owners cannot work out a deal to play this year,1 there figures to be more public disenchantment. Many Americans might not have the patience for such a labor fight against a backdrop of record unemployment, but it’s worth diving into the numbers behind ballplayers’ salaries to see just how much is at stake.
While not all owners are billionaires, some certainly are. But just as the balance sheets of MLB teams are kept away from the public, it’s impossible to know the financial situations of most club owners. Player salaries, on the other hand, are publicly available. So while we know that many major leaguers are indeed millionaires, a sizable share of players fall short of that status, according to data requested by FiveThirtyEight from the MLB Players Association and corroborated in part by figures from Spotrac. Of the 1,453 players to accrue at least one day of service time last season, 590 (40.6 percent) have made less than $1 million in career earnings, according to the MLBPA’s breakdown. The median career earnings of that group was $357,718.
That split makes sense when you consider the number of players with minimal big league experience: 584 of the players who spent at least one day on their team’s 25-man roster or injured list last season have accrued less than one total year of service time. These players include some everyday starters, certainly, but they also include those who go back and forth between the minor and major leagues, making just a portion of the league minimum for a full season — which was $555,000 in 2019.2
Of course, as players gain experience, they build up their career earnings. Last year’s players with at least one but fewer than two years of service tended to have topped $1 million; the 199 players in that category had a median career earnings of $1.24 million. And every subsequent duration of service had even greater total earnings. But total earnings don’t tell the whole story: They leave out taxes.
Agents FiveThirtyEight spoke with said taxes consume approximately 50 percent of player salaries, and that figure is supported by a player’s paystub found in a dugout in 2015 and posted online. Taxes vary based on differing levels of state and local tax, but even if athletes live in states with no income taxes, they still may pay “jock taxes” on games played in states and cities with those taxes. Then there are union dues, which run $85 a day during the season, and agent fees paid on dollars earned over the league minimum. An average player likely needs to exceed three years of service time to net $1 million in major league pay — and 63.3 percent of players last season hadn’t hit that experience threshold yet.
Moreover, players’ opportunities to earn are shrinking. Their careers are ending earlier but not starting any sooner. The average career service time for an active player was 4.79 years in 2005, according to the MLBPA. It has since gradually declined, reaching 3.71 years last year. That means that in less than two decades, career length has declined by more than a full season.
Former pitcher Rob Scahill played for the Rockies, Pirates, Brewers and White Sox over parts of seven seasons in the majors. He accrued two years and 162 days of service time and made $1.31 million in major league pay.3 He said the $110,000 signing bonus he received as an eighth-round pick in 2009 was eroded by the “huge negative cash-flow” of living on minor league wages. He didn’t sign his first major league contract until 20134 — a one-year deal for $490,000 — but he split his time that year between the Rockies and their Triple-A club, so he earned $203,497 from the big league club.
Scahill’s last game pitched was in 2018 as a 31 year old; after his final attempt to make a team, he entered real estate. “Your average major league player needs a job after baseball,” he told FiveThirtyEight.
Scahill said if a player is savvy, he could save 25 percent of what he earns after taxes. If a player has $1.31 million in major league earnings,5 like Scahill, and is able to save a quarter of take-home pay after taxes and union fees, he would leave his career with $156,200 in cash savings from his major league salary. If such a player instead saved about 8 percent, the average U.S. savings rate before the coronavirus pandemic, he would finish his career with just $50,000 in the bank from his baseball career.
“Most grind out on a split career between Triple-A and the majors unless you’re a contract guy,” Scahill wrote via text. “For the vast majority of players, every dollar counts for the rest of their lives.”
Though it’s not entirely clear how much owners stand to lose in a season without fans at games, they are voicing concern about what will happen to their clubs. But the players’ camp believes that their athletes — particularly the nonmillionaires — are not as well positioned as owners to take a short-term financial hit in 2020. That’s why they are so entrenched in their negotiating position — namely, demanding prorated pay and at least a half season of games.
But in the end, none of that may matter to fans who just want to watch baseball again.
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June 05, 2020 at 06:00PM
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How Much Money Do MLB Players Really Make? - FiveThirtyEight
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