Is The Major League Minimum Enough?

By
Bart Given
Published: 25 June 2009 1:43 PM MDTPosted in: Views from the 'Box"Tags: , ,
Is The Major League Minimum Enough?

I thought this was a really interesting comment/question from Richard following my post about the Traveling Secretary role.

Hey Bart, I once heard a pro ball player on the radio, complaining that everyone had a misconception about how much money some of these guys really make. He said he was making league minimum (I can’t remember what it was, but this was in 2002), and that he had to pay for his own travel expenses, accommodations, uniforms, etc. Any idea how much these kind of things can end up costing a player, and whether or not the league-minimum players are really so hard-done-by? Thanks as always.

Personally, I don’t think anyone should feel sorry for a MLB player making the minimum. The current minimum salary is $400,000 and I can’t remember the exact number of 2002, but I think it was between $200,000 and $300,000. Obviously this is well above the poverty line.

Now, if you try and think of every player has a “small business” you can wrap your head around the fact there are certain expenses incurred in order to meet this revenue. Some players who did not receive a substantial signing bonus and have spent several years in the Minors may actually be in debt prior to making the Majors. This group of players often have part-time jobs in the off-season to support their career.

Once a player makes the Majors, let’s assume a full season, his balance sheet may look like this.

Revenue:
Salary – $400,000
Licensing – $15,000
Meal Money – $10,000
Spring Meal/Accommodation Allow.- $6000
Total: $431,000

Expenses:
Taxes (40%) – $160,000
Agent Fee – $20,000
Housing Spring/Regular – $15,000
Dues Union – $9,000
Dues Clubhouse – $7,000
Total: $211,000

Net: $431,000 – $211,000 = $220,000

A few things to keep in mind when looking at my balance sheet:
- I’m not an accountant
- May have missed something…
- Any player who’s paying commission on a league minimum salary needs a new agent…
- Teams pay for all uniforms, bats and transportation (including flights to spring and home)
- All players receive gloves, shoes, catching equipment gratis from suppliers
- I’ve assumed the player is receiving no money for endorsements
- Also assumed he is single and isn’t flying his family to and fro
- Haven’t included the taxable benefit associated with tickets

Having said all that, this is a pretty good glimpse into a Major Leaguers’ income. I’d imagine most of you could survive on clearing $220,000 and receiving a pension.

There is one huge caveat – the career of a professional athlete is relatively short. Many of these players have nothing legitimate to fall back on if their career is cut short by injury or performance before they hit the big payday. If a player only gets one season in the bigs, he certainly hasn’t made enough to be financially secure for the rest of his life. This is why you may hear some players pontificate about not being wealthy.

Safe to say most players who make it to arbitration are well on their way to a financially secure life – if they show some fiscal responsibility of course. I’d imagine most of you could struggle through.

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