Two Simple Reasons Why Baseball Player Contracts are So Much Bigger than Football Player Contracts

The announcement of the Clayton Kershaw contract for 7 years and 215 million coinciding with the end of the NFL season has a caused a little bit of a ripple from people confused about athlete pay structures in the different leagues.

Pete Prisco from CBS sports fanned the flame a little by posting a pretty startling fact:

This might be a little shocking considering how Payton Manning is a name even your grandma knows.  There are various forces here that dictate player salary, but two of the biggest are the Salary Cap in the NFL and the free agent eligibility.

Salary Cap

The NFL has a hard salary cap that regulates how much a team is allowed to spend.  Last year the NFL cap was set at 123 million dollars to be split 55 ways (the size of the NFL roster), which amounts to  a 2.23 million an average per player.  The average MLB payroll last year was  99 million, with the median being 90 million (The Yankees and Dodgers are very high 200M +, but the Astros and Marlins do a pretty good job of canceling them out).  With the 25 man roster on a baseball team this works out to about 4 million per player average.  So already you see that baseball teams pay about twice as much on average due to roster size.

Free Agency

The NFL allows restricted free agency after three years and complete free agency after four and there is no minor leagues.  Without a minor league, a player just drafted starts accruing league time immediately.  In baseball, a player must accrue six years of playing time and many teams such as the Nats with Harper, Rendon, and Strasburg delay a players call up from the minors to get seven MLB seasons from them.  With the MLB minor league system, it is very possible that a player will play with a franchise for ten years before becoming eligible for free agency.

The impact of the free agency rules are that football players are more accurately paid what they are worth.  More players are playing on a market based contract, the available payroll is more evenly spread around.  Also in the NFL players contracts are year to year, a team can cut a player if he is not performing up to his contract value.  In baseball, most players are playing on an artificially CBA negotiated contract, with the few that are free agents reaping most of the available payroll.  Contracts are also guaranteed, so many FA contracts end up being overpaid for their level of contribution to their team by their end.

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