Tuesday, January 28, 2014

Pays to become a Yank

Last Wednesday, months of speculation ended when the Yankees announced the signing of prized Japanese import Masahiro Tanaka. The Yanks will pay Tanaka $155 million over 7 years, plus an addition $20 million to the Rakuten Golden Eagles of Nippon Professional Baseball for the rights to negotiate with the player.

This is an absolutely absurd amount of money for a pitcher who has yet to make a single pitch in the MLB. With this deal, the Yankees have now committed $483 million this offseason alone - they apparently haven't learned anything from their previous blockbuster deals with big name free agents. This is the second largest deal ever handed out to a free agent pitcher and let me reiterate - he has never pitched in the MLB before! Sure his stats from last season, are numbers that we haven't seen in the MLB in the live ball era, but we also haven't seen Tanaka in the MLB ever.

Lets break down the numbers in little more detail shall we?  Tanaka will make an average annual salary of $22.14 million, the fifth highest annual salary for a pitcher in the major league. Assuming he averages 200 innings per season - which is probably high - he will make $111,000 per inning pitched, or about $37,000 per out.

As a broke college student, I worked about 25-30 hours per week last year and made about $20,000. Masahiro Tanaka will make almost twice what I did all of last year for every single out he records.

Oh, and did I mention that he's two weeks younger than me?

I never should have stopped playing baseball.

What is this place?

My name is Matt, and this is the beginning of my blog. 

This blog will be about sports. This blog will not be a list of my favorite teams or regular recaps of big games. This blog will focus on the business of sports, the money behind the sports. 

I will discuss a lot of things that your typical sports fan probably doesn't consider.  Things like - How much does it cost to name a sports arena after a beer company? Do ticket sales really translate to big profits? Why do aging players continue to make huge sums of money even though their performance isn't what it used to be?

Professional sports is a huge industry that is responsible for nearly 3 million jobs in the United States alone. Individual franchises can be worth billions.

Since I'm American, and typically follow American sports, most of my entries will be focused on - but not limited to - American sports. I'll take a look at player contracts, TV deals, stadium construction, and large scale events like the quickly approaching 2014 Sochi Olympics.