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 agents. 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