We are well over a month into the 2019 baseball season and free-agent left handed pitcher Dallas Keuchel still hasn't signed a new contract to play. He stated Monday it isn't because he is greedy, it's because nobody will offer him what he's worth. I have the suspicious feeling Mr. Keuchel never took an economics class in school. Or passed one if he did.
Economics is fairly simple: supply and demand. Every MLB team wants left handed starting pitching. Demand is high. Dallas Keuchel is a left handed starting pitcher who is a free agent. Supply is low. Therefore we have a market.
Now the only question is the value of the supply. Apparently that's where things have gone askew. Just because something (in this case Dallas Keuchel) is low in supply yet high in demand doesn't mean it has infinite value. The value of anything is only what someone is willing to pay. According to Keuchel, no team is willing to pay what he believes he is worth and he is taking a stand on principal to not sign a contract he believes is below fair market value.
So the problem, according to Keuchel, isn't he wants too much money. Oh no, of course not. The problem is teams don't realize the tremendous value he can deliver to them and they aren't offering him enough money. He thinks the free agency market has failed him.
Good grief.
I don't really care how much baseball players are paid. It doesn't effect my enjoyment of the game in any way, shape or form. Some fans get upset. They'll wonder why athletes are paid so much when other seemingly more important professions (teachers, firefighters, police officers, etc.) are paid much less. That's simple economics. There are a lot of people able to supply those professions, there aren't a lot people who can hit 40 homers or strikeout 300 hitters.
Or fans get upset at player's salaries because they think it drives up the cost of tickets. That's not true. MLB teams are a business, they employ price elasticity to maximize profits (if they are smart). They charge what people are willing to pay. If a club can sell 2 million tickets at an average price of $25 dollars a ticket or sell 1 million tickets at an average price of $55 a ticket they will choose the higher price since it means more profits. This is a super simple example because it doesn't take into account all the additional revenues (parking, concessions, souvenirs) a fan in attendance can generate, but it makes my point. Player salaries don't drive up the cost of attending a game. The amount of money players' make is based on the revenues a team think it will generate in return for signing them.
OK, I'm getting long-winded here. Back to the point. I don't care how much money a ball player makes because it doesn't effect my enjoyment of the game. When a players signs one of these huge contracts I think good for him or boy is that team stupid. Usually the latter, but I'm glad Mike Trout paid.
What does bother me is when a ball player complains that no team will pay him enough money. Boo hoo. Back in the old days before free agency players' had a legitimate gripe because they could not offer their services to every team. Their value was held down because there was only a market of one team.
Today when a MLB player hits free agency he can offer his services to 30 teams. Much bigger market, hence much bigger contracts. But that doesn't mean every free agent can back up the truck. A player's talents only have so much value to the different teams. He finds out how much when he starts receiving offers. Sometimes it is a reality check. Apparently that is the case with Dallas Keuchel. But he refuses to believe it, instead he is taking a stand on principal. Not because of greed. No, no, not greed. That would be bad.
Instead Keuchel is taking a stand for all players to get the money they think they deserve, not what teams are willing to pay them. What he fails to realize is the market has spoken, he just doesn't like what it had to say.
The lesson learned here folks is pay attention in that economics class or maybe someday you'll be talking out your ass about things you don't understand. Then again you could sleep through econ and simply buy a dictionary. Be sure to look up greed and principle. Those definitions might come in handy if you ever become a free agent.
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