In the land of excess, sport is no exception to the rule. Major League Baseball (MLB), the American baseball league, recorded the largest contract in the history of sport on Monday, December 9. Free agent (without contract), Juan Soto signed with the New York Mets for an unprecedented contract: $765 million over 15 years. A contract that is dizzying, but which responds to the current dynamics of American sport.
“In baseball, we are used to having longer contracts than what we see in Europe, with football for example.notes Gaétan Alibert, author of several works on baseball. But it really is an extremely long contract. It is historic in its total amount and its duration.” Two elements which explain “by the generational talent of this player. He is only 26 years old but has already demonstrated that he is exceptional, especially offensively. He will be able to play for many more years. Plus, with such a large contract, we secure it at -.
“The players want the highest salaries to be among the best in the hierarchy. It is also a race between them to obtain the best contracts.
Gaétan Alibert, author of several works on baseballon franceinfo: sport
The Dominican player, however, is not the first to achieve such high sums. If Juan Soto is indeed the player with the “largest” contract, per year, it is Shohei Ohtani who negotiated the best amount. The Japanese joined the Dodgers in 2023 for $700 million over ten years, or $70 million per season. The new Mets player will make around $51 million per year.
Even if contracts can be longer in MLB than in other American sports (NBA, NFL, NHL), salaries per season are equivalent. “We are around 50 million dollars in the NBA, in the NFL», note Frank Pons, ddirector of the International Observatory on Sports Management and professor at Laval University in Quebec.
The main financial windfall for franchises, traditional TV rights are now accompanied by other resources: “Since they managed to monetize the marketing of content on different platforms, broadcasting rights have increased. This is often boosted by sports betting, which generates additional income with the results and certain images. So there is an increase in content values», explains Frank Pons.
Salary amounts are also amortized by player-related sales. “They are “market players”. Soto will sell jerseys, he will increase revenue from sales of derivative products. Ohtani brings this to a new market, that of the Japanese who consume a lot. He is the idol of a country and he brings in an extremely significant financial windfall, of the order of 200 million dollars per season.», Explains the researcher. Merchandising is also present in the football economy in Europe.
“At the same time, the value of franchises increases, income follows and so do salaries.”
Frank Pons, specialist in sports management at Laval University in Quebecon franceinfo: sport
Last point, unlike the NBA and the NFL, MLB franchises are not restricted by a “salary cap”, but a “luxury tax”, called the “Competitive Balance Tax” (CBT). If franchises exceed $230 million in payroll, they are subject to a tax, which is then returned to smaller teams. This constraint is not really one for the league’s historic teams like the Yankees and the Dodgers, who pay this tax every season.
To bring in Shohei Ohtani, the Dodgers had concluded a financial arrangement to avoid additional taxes. The player only receives $2 million for the first 10 years of his contract, before receiving the rest of his salary thereafter. Thus, the $702 million is not counted in the payroll, which allowed the team to strengthen with other players.
