The issue of escalating compensation and rising ticket prices in professional sports has been around for years. But next month it could reach a boiling point when 21-year-old Stephen Strasburg, the No. 1 pick in this year’s Major League Baseball draft, signs for at least $15 million. And that’s just a bonus before salary is even discussed.
The blogosphere and radio call-in shows are already buzzing, with people saying things like “Man, the [Washington] Nationals” — or whatever team ends up signing Mr. Strasburg — “are sure going to have to raise prices to pay for this guy. You’ll be lucky to afford a beer when you go out to the ballpark to see him pitch.”
Well, if you can’t afford to buy a beer at the ballpark then it didn’t do the team much good to sign the player, did it? Sportswriters and radio guys delight in reminding fans that every time a team acquires an expensive player the cost of everything goes up. But that’s just not the way economics works.