Now That’s Some Wealth Extraction

I just saw that Miguel Cabrera has signed a contract for $472,000 dollars to play for the Marlins next year. I’m not surprised nor bothered by this, given the rules of the CBA; however, I just happened to be involved in a project converting on-field performance into dollars. I found that last year’s performance by Cabrera was worth $14.57 million—only 30-times his salary for next year. Wow. When I see divergences like that, I wonder how long it will be before a new league pops up.

3 Responses “Now That’s Some Wealth Extraction”

  1. Still, this isn’t necessarily the smartest deal the Marlins could have made. I was looking for something more long-term–ouy can bet he’ll rake in a great deal of money in arbitration next

  2. Kevin Feasel says:

    I wouldn’t hold my breath waiting for a new league. From what I recall in The Research, a free agent will make a rough approximation of his expected marginal product. Meanwhile, an arbitration-eligible player could possibly be making more on average than his marginal product (it’s been a while, but I think this was a Larry Hadley paper, and I’ll admit that I haven’t the time at the moment to look it up, as political economy exams don’t take themselves…unfortunately), but we could even figure that they make about their MPL as well. This leaves the pre-arbitration players, many of whom get screwed.

    A new league would have to give an extra opportunity to these reserve clause-bound players who are not arbitration-eligible (as by that point, they’re making about what they’re worth to the team). It would have to, at the same time, draw a large enough number of people who would pay a sufficient amount of money to get enough talent to make this league close enough to MLB-quality that people would regularly attend and that players would seriously consider leaving the MLB forever for this league. If a Free Agent were to go to this new league, teams would accept that, I think, just as they now accept players who go to Japan or Korea. There might even be some marginal trades between these two, selling the rights to somebody who really can’t cut it in the MLB. So then you have a Japanese league in America, except generally limited to a smaller scouting pool relative to population than in Japan, as the MLB has more prestige and a known opportunity.

    I do not see many quality players jumping to this league. A reserve clause player who jumps will most likely be blackballed for the rest of his career; a free agent who jumps will likely do so because he isn’t good enough to be in the MLB. Without the expectations of talent, this wouldn’t even be the Players League; instead, it would be the XLB. Now pitching, Dan “HeHateMe” Kolb…

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