AP has released MLB’s official salary data for 2018, and in many stories there is some conflicting data, particularly with regard to the percentage of revenue allocated to salaries. Following are some clarification and interpretation.
You will often see Scott Boras quoted with a claim that players get a mid-40% share, but it seems like the revenue figures are gross and include MLBAM contributions. Also, only payroll is included (i.e., not benefits and post season share). This makes sense from an agent perspective.
The union is frequently quoted as saying the share is about 50%. That seems to jibe with a net revenue figure compared to MLB total compensation. I am guessing the revenue excludes Stadium debt, but includes contributions from related businesses.
An owners’ spokesperson will usually cite a mid-50% number, but that includes minor league player expenses and excludes MLBAM contributions (but, reportedly, does not exclude Stadium debt).
The compensation side is easy. Final payrolls (not AAV) are released by MLB, benefit cost is known since 2015 and post season shares are widely reported by the media. Here is what the players’ comp growth looks like since 1999.
For consistency and availability, and because I think its premise for net revenue is sound, I have been comparing official MLB salaries to Forbes (data back to 1999). Here is how total comp growth compares to Forbes revenue estimates.
Looking deeper, here is how spending patterns have changed based on payroll rankings. A little surprising to see the bottom-third has led the way, with expenditures up 83% since 2006 (vs. 60% for top-third).
Here’s how the Yankees compare to the rest of the league. Again, it might surprise some to see how stagnate the team’s payroll has been for so long.
Which brings us to my favorite chart: the Yankees’ total discretionary player cost (includes luxury tax) compared to its net Revenue as estimated by Forbes. The degree to which the team has scaled back is stark.
And, as a result, the Yankees ranked near the bottom in terms of payroll+tax/revenue in 2017. Forbes 2018 estimates come out in March, and when the comparison is made, the Yankees will be near or at the very bottom.
Finally, if you are interested in looking at or comparing other teams’ payroll/revenue since 2001, click here.
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