Are $100-Million Contracts for MLB Players a Good Investment for Teams?

Posted: Jul. 14th, 2013  |  By DailyLuxe News

Play ball!

With million-dollar contracts being commonplace in my most professional sports, are multi-year $100-million-deals a good investment for teams?

The advantage to the teams is to lock in a player for an extended period of time at the current market rate. If the player performs well over several years, the team does not have to keep increasing the athlete’s rate to match comparable salaries. However, if the player doesn’t live up to expectations or is injured and unable to perform, the team is stuck paying an athlete while getting nothing in return for its investment.

The 31 position players who have signed $100-plus million contracts hit .300 and averaged 26 home runs and 91 RBIs before their big payday. Post-signing, they had hit .293 and averaged 25 home runs and 86 RBIs heading into this season.

The trend represents a slight decline due in part to injuries and age, but the average production is such that a player with those numbers wouldn't be stealing a team's money.