Slugger Juan Soto signs for $51 million per year
Should big city teams like the NY Mets and the LA Dodgers be permitted to thrive?
An interesting question is whether professional sports leagues should be biased toward big or small cities. This has come up a lot after the Los Angeles Dodgers, with their huge and ardent fanbase, won the baseball World Series for the second time in the last 26 seasons (and the second time in the last five seasons).
After Los Angeles signed free agent pitcher Blake Snell away from San Francisco a few weeks ago, it was feared that they would then sign young slugger Juan Soto, lately of the New York Yankees.
But instead, Soto signed yesterday with hedge fund zillionaire Steve Cohen, owner of the New York Mets, a colossal contract guaranteeing him $765 million over 15 seasons, with a $75 million signing bonus and no deferred money, with the player having an option after 5 seasons to re-up and to guarantee him $805 million.
Wow, that’s serious money.
A year ago Shohei Ohtani signed a contract with the Dodgers paying $700 million over 10 years, but that deal was hugely deferred so that the Dodgers could afford to sign outstanding players so Ohtani could win World Series.
The Dodgers suffered a large number of injuries in 2024, but still won the World Championship, in large part because the Dodgers’ top three in the batting order of Ohtani, Mookie Betts, and Freddie Freeman continued to deliver on their big contracts.
Soto is often described as the New Ted Williams due to his incredible batting eye allowing him to lead his leagues in walks three times through this season’s age 25. On the other hand, even though he’s a big guy at 6’-2” and 224 pounds, his career high so far is 41 homers in 2024.
It could well be that Soto goes on to enjoy multiple 50-homer seasons over age 26-32 and thus justifies his colossal contract. But Ted Williams’ season high was 43 at age 30 in 1949. Granted, it’s unlikely that Soto, a Dominican, will miss 4.5 years of his prime serving in the U.S. military like Williams did, but it seems audacious to project Juan Soto as being as good as Ted Williams.
On the other hand, the $765 million is Steve Cohen’s money, not mine, so bless him for risking it.
In Europe, soccer is ruthlessly competitive, with bad teams being relegated down into lower league. But that also means that certain clubs, such as Barcelona, Madrid, Munich, the various Manchesters, Paris, the various London clubs, and so forth tend to be the best, year after year.
The USA has a Major League system in which about 2.5 dozen teams have no fear of relegation no matter how bad the Chicago White Sox get.
But among Major League teams, the top 25 or 30 teams or so tend to be roughly similar because of rules that favor last year’s weak teams. For example, in the top American league, the National Football League, the Kansas City Chiefs, a small city team, have won three of the last five Super Bowls, but only four of the last 55 Super Bowls.
The NFL is hugely successful. On the other hand, should small city teams be as successful as big city teams?
Beats me.
Off hand, I’d argue that big city teams should be more successful on a greatest-good-for-the-greatest-number basis. But that doesn’t seem to be a popular philosophy.
There are two major differences between MLB and the NFL. The first is TV income. NFL teams share equally income from TV contracts, while MLB teams generate most of their TV revenue from local contracts. This creates huge discrepancies in team income.
The second major difference is salary caps. MLB has a salary cap but allows teams to exceed the cap by paying a luxury tax to the league. The NFL salary cap is a “hard” cap with no exceptions. Teams can play around with signing bonuses, renegotiating contracts, etc. but most such strategies only delay the day of reckoning.
One key strategy in the NFL is to sign a QB who values winning over maximizing income. Brady and Mahomes both fit into this category. Both were willing to ink contracts at less than the going rate for top performers, allowing teams to sign better supporting casts, although it seems that the Chiefs should have spent more on their left tackles this year. I’m not aware of any baseball players willing to take less than market value to benefit the team.
Mahomes even pulls a teammate (Kelsey) and his head coach into his endorsement deals with State Farm and Subway.
By the end of the 70's the New York Giants were so bad that NFL commissioner Pete Rozelle had to hold an intervention with Giants owner Wellington Mara. The Giants being a laughingstock was bad for football, Rozelle told him. Mara hired George Young as GM, who drafted Phill Simms and Lawrence Taylor and the Giants went on to be one of the dominant teams of the 80s.