Three of the richest contracts in sports history would appear to bust the baseball-is-dying narrative, but underlying trends have exposed a rot within the mechanics of the sport’s economics

The three generational talents on Major League Baseball’s free-agent market this winter were always going to cash in big. But the splashy numbers as they came across the wire were enough to leave even veteran observers slack-jawed.

It kicked off in February when Manny Machado agreed to a 10-year, $300m contract with the San Diego Padres. Bryce Harper followed with a 13-year, $330m deal with the Philadelphia Phillies less than two weeks later, the richest contract by total value in North American sports history.

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That record stood for all of three weeks as Mike Trout signed a 10-year, $360m extension – creating a 12-year, $426.5 million total commitment – that all but ensures he’ll finish his career with the Los Angeles Angels.

That’s more than $1bn in guaranteed salary for three players, the sort of money that would appear to dramatically counter the persistent narrative of baseball as an outmoded enterprise.

The perennial hand-wringing over baseball’s waning popularity and relevancy amid the hastening pace of American life, a tradition dating back more than a century, is not entirely without merit. Average attendance at major league ballparks hit a 16-year low in 2018. Little League participation is down. A Gallup poll shows baseball, which ceded the practical if not symbolic mantle of national pastime to the NFL decades ago, is falling behind basketball in popularity among fans in the United States.

But MLB’s gross revenues, which include league-wide multimedia deals worth guaranteed billions and often lucrative broadcasting deals at the local level that leverage the sport’s robust regional audiences, have enjoyed steady growth over the past decade and a half, climbing to a record $10.3bn last year. Player salaries in the major leagues have until recently kept in step, fluctuating between 48% and 52% of the total revenue.

The headline-grabbing contracts for Machado, Harper and Trout came in the final reel of an offseason that further exposed a rot within the mechanics of the sport’s economics, systemic problems that portend a combative renegotiation of terms when the current collective bargaining agreement between the players and owners expires after the 2021 season.

Baseball players cannot become free agents until they’ve accrued six years of service on a major-league team’s 40-man roster – a span that can easily be manipulated to seven – which enables owners to fill out their rosters with younger players to reduce payroll and free up cash for the occasional nine-figure signing. That makes splashy deals like the ones signed by Machado, Harper and Trout not as difficult to pull off as they might seem.

Yet the increase in money flowing to the very top of the free-agent market coupled with a new-school reduction in spending has engendered a shrinking middle class and the collapse of a once-lucrative free-agent market – and that’s putting aside the scandalous working conditions in the minor leagues that allow teams to pay young prospects below legal minimum wage.

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The highest-profile casualties of this year’s free-agent freeze include Dallas Keuchel, a left-handed starting pitcher who helped the Houston Astros to their first World Series championship in 2017, and Craig Kimbrel, a seven-time All-Star closer who won a title with the Boston Red Sox last October, who both remain unsigned more than two weeks into the regular season.

Many others were forced to settle for below-market, incentive-laden contracts, including elite utility player Marwin González ($21m over two years with the Minnesota Twins), Gold Glove-winning catcher Martín Maldonado ($2.5m over one year with the Kansas City Royals), All-Star second baseman Mike Moustakas ($10m over one year with the Milwaukee Brewers) and veteran right fielder Adam Jones ($3m over one year with the Arizona Diamondbacks).

It’s a testament to a players’ union long regarded as the strongest in sports that baseball remains the lone North American sport to operate without a salary cap. Instead, Major League Baseball makes use of a luxury tax as a deterrent for overspending, imposing a penalty on every dollar spent above $206m in total payroll that goes into the revenue-sharing coffers equally distributed among the 30 major-league teams.

Yet risk-averse general managers, reared on analytics and leery of the runaway bull market of the aughts that saw players yield astronomical deals based on past results only to underperform past their prime, have proven increasingly loath to open the pursestrings when their club is not in contention for a championship. This reduction in spending saw just two teams – the Red Sox and the Washington Nationals – surpass the mark and pay even a penny in tax last year, down from five in 2017 and six in 2016. Twenty-five clubs opened the season at least $40m under the threshold with eight teams were more than $100m below it.

Players and agents have alleged noncompetitive behavior and even collusion on the part of the front offices, insisting (correctly) the luxury tax has become a de facto salary cap. The teams say the players’ demands are unrealistic. The truth is likely somewhere in between, but transcendent talents like Machado, Harper and Trout have managed to cash in even as the tiers of players below them grapple with uncertain futures.

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Machado, 26, is a power-hitting third baseman who came up with the Baltimore Orioles before a mid-season trade to the LA Dodgers last summer. A better-than-average defender who’s hit between 33 and 37 home runs in each of the last four seasons, he’s joined a San Diego club with one of the best farm systems in the majors and is poised to rate among the National League’s best corner infielders for years to come.

Harper, a 26-year-old right fielder who was dubbed the “LeBron James of baseball” by Sports Illustrated when he graced the magazine’s cover as a high-schooler in 2009, was named NL Rookie of the Year in 2012 and earned the league’s Most Valuable Player award in 2015, amassing a .279 average with 184 homers, 521 RBIs and a .388 on-base percentage over his major-league career.

And Trout, a 27-year-old center fielder, is the best player of his era in a way that defies easy categorization, doing most baseball things exceptionally and none of them badly. He hits for average (.307 career batting average, fourth among active players) and he hits for power (.574 slugging percentage, first) while playing in a park that favors pitchers. He’s finished either first or second in Most Valuable Player voting in every full season he’s played, even coming in fourth when he missed nearly a quarter of the 2017 season due to injury.

Whether they can deliver a return on their nine-figure investments is an open question. Yet as major league payrolls continue to drop while revenues continue to climb, the looming battle at the bargaining table threatens to obscure anything on the diamond.