Show them the money

Babe Ruth played his first season for $600. Baseball's current highest paid player makes $27.5 million per year.

The average annual salary of a surgeon is $177,790 per year.  High school teachers make $52,113 per year and fire fighters make $43,776 per year.

Carlos Silva of the Seattle Mariners, who just came off one of the worst seasons ever by a pitcher, will make  $11 million in the 2009 season.

Hmm.

The salaries of professional athletes have always been a topic of controversy. “In such troubled economic times,” one may ask, ”how can we justify paying someone millions to throw a ball?”

“That’s business,” another may counter.

Who is right? Are our athletes dramatically overpaid or is it simply business as usual?

I tend to answer yes on both.

Regardless of the state of the economy, it is ridiculous for an athlete to make 70 times the amount of a surgeon, 211 times the amount of a teacher and 251 times the amount of a firefighter — all jobs that contribute to bettering or even saving the lives of every human on this Earth.

What can an athlete do of that magnitude? Sure, they give back to the community at times; some donate a portion of their salaries to charities while others directly volunteer at hospitals and shelters, but nothing they can do compares to rescuing a baby from a burning building or giving a sick man a new heart. Athletes are merely entertainers.

However, one cannot overlook the business aspect of professional sports. Nobody set the bar for the average basbeball player at $3 million per year. The bar set itself.

Business 101 — Supply and Demand.

There are approximately 6,706,993,152 people on Earth. There are exactly 30 major league baseball teams with rosters of 25 men per team. This means that at any given time, there will be 750 people on a major league baseball roster — about one ten-millionth of a percent of the world’s population.

Supply = low.

Whether a team makes money depends on whether they sell concessions and merchandise. Whether they sell concessions and merchandise depends on whether they sell tickets. Whether they sell tickets depends on whether they assemble a winning team worthy of buying a ticket for. And how might they do that? By going out and buying the best talent on the market.

Demand = high.

Babe Ruth played his first major league season in 1914 for the Baltimore Orioles and earned a grand total of $600. Then, in 1922, he became the first player in history to earn $50,000 in one season.

Nobody broke $100,000 until Hank Greenberg did it in 1947, and Nolan Ryan became the first to $1 million in 1979.

With each new salary milestone hit, the bar is raised up a bit. Athletes due for a big pay day are compared to the highest paid players in their sport. Are they as good? Not as good? Better? Once that determination is made, the checks are written.

Baseball’s current high salary is Alex Rodriguez and his $27.5 million annual average. In a few years, Albert Pujols will hit free agency and if general managers view him to be a better talent than Rodriguez, he will likely become baseball’s first $30 million man.

The concept of bidding wars also helps to jack up the price of some of sports’ biggest stars. Let’s extend upon the Albert Pujols example. Assume the general concensus is that Pujols is worth $30 million per year and the Boston Red Sox offer him such a contract. But the New York Yankees need a power hitter too and definitely don’t want to see Pujols go to their archrival. So they offer him $32 million per year. Unless one of the competitors backs off, Pujols could make up to $35 million or even more.

With slimeball sports agents such as Scott Boras forcing teams to drastically overestimate the market and bid through the roof for his clients, this aspect of the salary debate is only compounded.

So in summary, yes, athletes are dramatically overpaid. But when the fate of a team executive’s success rests in the hands of how much they spend, sometimes it pays to overpay.