I have to wonder, after reading this article
on how the share of baseball revenues going to player salaries has dropped to 41% from 58% six years ago (h/t: Felix Salmon
) whether the luxury tax and increased revenue sharing in baseball has held down salaries. The luxury tax was imagined not to do too much
, and revenue sharing may be a drag only because it transfers money to small-market teams that do not compete for free agent
s. If it transfers 17% of revenue from players to owners, I suspect your next collective bargaining agreement will have that as a sticking point. Lucky for us, that's not until 2011.
I had wondered whether Torii Hunter might take $55 million for four years, but the article argues he would get $75MM for five -- not likely a price the Twins would go, no matter how you project the revenues, because that sets the bar for the M&M boys.
So A-Rod returns to the Yankees for the Yankee premium
. If Torii goes there, the premium probably gets him an extra $3MM/yr.
Labels: economics, sports