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Rich Are Getting Richer, But So Is Everyone Else


We all know that salaries in Major League Baseball are going up. But is that the case for all players, or just those at the top? In other words, are baseball’s superstars’ salaries both being paid a seemingly ungodly amount and seeing larger increases year over year, or are the increases more equitable at the top, bottom, and in the middle?

Again using Opening Day salary information from the USA Today Salary Database, I looked at the average salaries among the highest, second, third, and lowest quartiles in Major League Baseball from 2005 to 2015. For example, in 2015 according to USA Today, 868 players were under contract. The highest quartile includes the 217 players with the highest salary for the year; the second quartile includes the next 217 highest paid players, etc.

The breakdown is as such:

Year

1st

2nd

3rd

4th

Total

2005

$7,703,065

$1,965,576

$504,257

$322,220

$2,623,205

2006

$8,210,367

$2,193,493

$568,540

$333,462

$2,827,105

2007

$8,422,250

$2,330,957

$556,839

$383,328

$2,926,342

2008

$9,246,868

$2,315,992

$551,118

$393,665

$3,131,041

2009

$9,563,822

$2,437,699

$615,474

$405,304

$3,260,059

2010

$9,608,544

$2,433,771

$634,004

$406,537

$3,278,359

2011

$9,692,219

$2,448,759

$646,436

$419,129

$3,305,055

2012

$10,054,158

$2,530,636

$627,021

$482,592

$3,431,339

2013

$10,592,503

$2,693,966

$686,598

$494,307

$3,616,843

2014

$11,418,493

$3,022,053

$766,161

$503,912

$3,927,655

2015

$12,190,219

$3,321,264

$822,574

$511,449

$4,214,614

This is how to interpret these numbers: in 2005, the average salary of all players in the highest quartile made $7,703,065, and the average salary of all players in 2005 was $2,623,205. It’s a bit difficult to discern trends from large, raw numbers so here are the year over year percentage increases for each quartile and all players in total:

Year

1st

2nd

3rd

4th

Total

2005

 -

 -

 -

 -

 -

2006

6.6%

11.6%

12.7%

3.5%

7.8%

2007

2.6%

6.3%

-2.1%

15.0%

3.5%

2008

9.8%

-0.6%

-1.0%

2.7%

7.0%

2009

3.4%

5.3%

11.7%

3.0%

4.1%

2010

0.5%

-0.2%

3.0%

0.3%

0.6%

2011

0.9%

0.6%

2.0%

3.1%

0.8%

2012

3.7%

3.3%

-3.0%

15.1%

3.8%

2013

5.4%

6.5%

9.5%

2.4%

5.4%

2014

7.8%

12.2%

11.6%

1.9%

8.6%

2015

6.8%

9.9%

7.4%

1.5%

7.3%

Total*

58.3%

69.0%

63.1%

58.7%

60.7%

*The total represents the total increase from 2005 to 2015

The way to interpret these numbers is that, for example, in 2006 players in the top quartile saw their average salary increase 6.6% from the previous year, and all players saw their average salary increase 7.8% from the previous year.

In short, as the title of this article implies, the best played players are earning more and more every year, but increases are being seen across the board.  In fact, the highest quartile was the only group in the last 10 years not to have a double-digit percentage increase in at least one year (topping out at 9.8% from 2007 to 2008). A few other highlights:

  • The third and fourth quartiles are generally in feast-or-famine when it comes to salary increases (or lack thereof). The third quartile saw three years in which they collectively made less money than the year before.
  • The fourth quartile never saw a salary loss, but saw the greatest year over year increases. The reason for these increases was solely due to the minimum salary substantially increasing from $327,000 in 2006 to $380,000 in 2007 and $414,000 in 2011 to $480,000 in 2012 (the minimum salary increases every year but those years saw much greater increases).
  • The economic downturn in the late 2000s impacted all quartiles, and overall salary growth in both 2010 and 2011 was less than 1%.

It is certainly ironic that the highest quartile saw the lowest overall increase from 2005 to 2015. In a world in which economic gains are much more significant in only the upper echelons of society, and compared to other leagues, such as Major League Soccer, in which players earning eight figures can play alongside those earning less than $50,000, in a way it’s almost refreshing to see a professional league without a salary cap offering all players substantial increases year over year.

 



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