Major League Baseball owners: Learn from the NFL

Reading the Washington Post during the NFL season has become a favorite past time of mine. After all, where were you going to get the next crazy twist in the RGIII vs. Shanahan saga? Even with Shanahan gone, I still frequent the WaPo. This morning Tobias Gibson wrote an interesting perspective on NFL contracts and the damage they are causing teams. Gibson’s perspective fails to suggest why NFL contract structure is beneficial and should be adopted into Major League Baseball. Allow me to explain.

The NFL is the most successful professional sports league in the United States. It has quickly become America’s new pastime and is the heartbeat of American sports fans. Sorry Bud Selig. There is a ton of revenue generated by the NFL across the world, around $9 billion a year, and yet the contracts seen in the NFL dwindle in comparison to those of superstars in Major League Baseball.

You see, the NFL is not just a sport, it’s a business. Football is physical. It’s brutal. The average NFL career is 6.86 years. Many players retire from the game of football and find themselves working another thirty-plus years of their life. Team owners refuse to grant NFL players gigantic salaries and astounding amounts of guaranteed monies. In fact, if you weren’t the first few picks of the NFL Draft, odds are your contract would contain little guaranteed money. Your pay was based on performance; performance-pay that Gibson opposed.

What do you get from incentive driven play? Fiercer competition, more exciting plays, and players willing to do whatever it takes to get to 15 touchdowns, 1,000 rushing yards or 10 interceptions. The exact things that drive fans to the game, to the NFL season package, to buying JJ Watt jerseys and at the end of the day, fuels the billions of dollars the NFL generates. So why is this such a good idea for other professional sports leagues, especially Major League Baseball?

Baseball lacks excitement and is full of overpaid players. Albert Pujols and his mega ten year deal will cost the Angels $240 million. Great for Albert; if you can get the money why wouldn’t you? Meanwhile a much more effective player, Mike Trout, makes pennies compared to Albert, yet produced far more than Pujols last season. And that’s the problem. Baseball is paying millions of dollars, large percentages of which are guaranteed, to players whose performance drops off after just a couple seasons. Look at the mega deals that have become commonplace in baseball: A-Rod, Mark Texeira, Johan Santana, Ryan Howard, and most recently Clayton Kershaw. Stop and think of the ones that have paid off? Save Clayton Kershaw, every other deal has been generated by a monster season followed by fizzled play.

I can’t even count the number of sports analysts who point out the flaws in mega deals and how history shows they just don’t work. Yet baseball continues to dole out the dough. Let’s imagine for a second those mega deals became laced with numerous incentives. What would happen? Well instead of leisurely jogging to first to complete a base hit, maybe players would leg out a double. Why? Because if they get 30 doubles in a season, that’s a $1 million bonus. Jammed your thumb too hard while playing the X-Box and you’re stuck spending time on the 15-day DL? Not anymore. With incentives if you play in 90-percent of the season’s games, you get another bonus. All of a sudden the ridiculous injuries you read about don’t become headlines, they become what a jammed thumb for every other person in society is, a day at work with a sore thumb.

Though Gibson feels the incentive laden contracts of the NFL are hurting the teams players play for, they are generating performance that is pleasing to the consumer. At the end of the day, professional sports are a business. And as a consumer, I want the best product available. Incentive contracts drive players to play beyond well. I say you pay them all for performance. That’s how my boss pays me and odds are your boss pays you. Maybe I’m wrong, but I’d much rather watch Edgerrin James run a touchdown his teams doesn’t need to earn a few more million dollars than I would Albert Pujols put on fifteen pounds and take strike three for a few hundred million dollars more.

  • rcwelliver

    It’s a good column…I think. Are there more incentives in NFL contracts than in MLB contracts? There are at least some in MLB contracts. NFL contracts are for lower amounts (total and guaranteed)because you know the guy may not live to play it out!