Analysis of the 2016 MLB Payrolls

Salaries in the 2016 MLB show that they will keep raising for years to comeĀ 
The 2016 Major League Baseball season was historic, with the Chicago Cubs winning the World Series for the first time in 108 years. The salary of the team was the fifth highest in the league, at $188 million. They played against the Cleveland Indians, who had not won since 1948. who was at number 22 on the salary list of 30 MLB teams. Leading up to the pennant, all but the Indians had the their salaries above the median. These two teams drew in a large audience that brought both excitement and an extraordinary amount of viewers.

In the Cy Young award winners, the Washington Nationals and the Boston Red Sox got their winning pitchers from the Detroit Tigers. The Nationals paid pitcher Max Scherzer $15 million for his year. The Red Sox paid Rick Porcello $20 million for his year.

The MLB competitive balance tax, or luxury tax as it is more commonly known, also had more teams pay out this year. The tax is to keep the teams in areas with less monetary ability a chance to not be out paid by those who do have those resources. The 2016 base amount before the tax would be paid was $189 million. Six teams, which was a new high amount, paid in 2016.

Los Angeles Dodgers
New York Yankees
Detroit Tigers
Chicago Cubs
Boston Red Sox
San Francisco Giants

The television viewing audience has been good for the money that is being paid by the teams, which helps pay for the salaries. The games aren’t as watched on the national channels, but more on the regional ones. The Kansas City Royals have gone a long way to pay their $177 million this way, being the top rated team two years in a row. The Detroit Tigers, Baltimore Orioles, Pittsburgh Pirates, Cleveland Indians, Boston Red Sox, Seattle Mariners, and San Francisco Giants have all had good luck in ratings in their local markets. The ad revenue is able to keep the smaller markets in competition with the bigger markets, just as the luxury tax does.

The 2016 World Series was the most watched in the past fifteen years. Game seven was 66 percent better than the 2015 game seven. The ad revenues for this game went to help, but will also go to help with the salaries in 2017. The ratings show that the MLB still has strength to draw in crowds. That will keep the owners willing to pay out the millions to the players who bring in the crowds to the stadiums and watching on television.

Major League Baseball saw record revenues. That allowed for the $252 million paid out by the Dodgers and the $243 million paid by the New York Yankees. The league made almost $10 billion in 2016. That comes with players making millions to play, though it causes some teams to have to pick and choose who they can bring into their team. Texas, which is known for its love of football, still was able to be the number eight team when it comes to what salaries they paid out. Their $168 million paid out was still over $100 million less that was paid out by the Dodgers. That shows that salaries will continue to go up in the years to come.

 

Author: admin