Sports And Generational Wealth

As the MLB Winter Meetings are days away the time is now to discuss athletes getting a big payday that will create generational wealth for their kids and grandkids. Some of my readers know that I have been thinking at great lengths about this since last winter when it became clear that Victor Wembanyama was going to enter the NBA Draft back in June. I think, at this point, all of my readers are well aware that he was drafted by the San Antonio Spurs.

Fast forward to September 8… there was email in my inbox when I was having my morning coffee from The Hustle… the headline was Are superstars good for the economy? For those who don’t know, The Hustle is a daily email newsletter Monday through Friday which I have been signed up for since before the COVID-19 pandemic began. This version of their daily newsletter came a few short days after Shohei Ohtani this winters MLB TOP free agent went down with an oblique injury and a few days before it was announced that he was done for the season due to an elbow injury. 

As a contract worker who understands business dealings better than most sports fans I am going to use Shohei Ohtani as one modern day example and provide a comparison with two other baseball players who played in the last forty to fifty years who have been named in some of the conversations I’ve heard about Shohei this off season. In an article sometime in the near future I will do the post an article doing a similar comparison of Wembanyama to a former basketball player.

When Shohei Ohtani came over to the United States in 2018 there were a few teams who were willing to pay the posting fee to have the right to sway him to sign with them. It has been widely reported that the Cubs were always his second choice and they were one of the teams willing to pay the posting fee back then. Of course the last six years he has played for the Los Angeles Angeles.

Don’t forget that he is the first flagship two-way player to play full time at the is Major Leagues since Babe Ruth and with the Universal Designated Hitter rule he can still get time is as a starting DH in 2024 the way he did back in 2019 while recovering from the second Tommy John procedure he had in four years. While Shohei is expected to sign a long term deal this winter it has been reported by many sources over the last week that he is willing to sing a short term deal.

In my eyes, this means he is willing to take a one year deal with an option year for 2025 with a team that is willing to pay him $35+ million dollars in 2024 with an option year that nets him $65+ million in 2025. He would then hit the open market again in 2026 and sign another longer term deal with the team he will retire with. Some reports even have him signing a longer term deal this winter that is quite complex and sets his family up for generations even though it would pay him the rumored $80+ million per season he is looking for based on his pitching performance after 2024.

Let’s take a look at one former Chicago Cub and one former San Francisco Giant who made what would have been considered generational wealth during their era in comparison. Greg Maddux was one of the better pitchers of his time. After joining the Cubs in 1986 he would play in Chicago for seven years before taking his infamy as the “Mad Dog” to Atlanta in 1993 because the Tribune Company did not give Cubs management the money they needed to keep him in Chicago. Let’s compare their pitching stats early in their careers:

Note: All stats are averages for the first six years of their careers.
Maddux 1986 thru 1991 — (Baseball-Reference.com)
29 Total Starts – 12 Wins – 11 Losses
78 Earned Runs – 64 Walks – 123 Strike Outs – 3.61 ERA

Shohei 2018 thru 2023 — (Baseball-Reference.com)
17 Total Starts – 8 Wins – 4 Losses
32 Earned Runs – 35 Walks – 122 Strike Outs – 3.01 ERA

Now let’s compare Shohei to Barry Bonds who also made his MLB Debut in 1986 with the Pittsburg Pirates. Sadly Bonds had a big involvement in the juicing scandal which started after the 1994-1995 strike and ultimately led to his generational wealth before he retired. However, I want to look at Bonds stats early in his career for this comparison:

Note: All stats are averages for the first six years of their careers.
Bonds 1986 thru 1991 — (Baseball-Reference.com)
145 Games – .367 On Base Percentage – .485 Slugging Percentage
24 Homers – 76 Runs Batted In – 35 Stolen Bases

Shohei 2018 thru 2023 — (Baseball-Reference.com)
117 Games – .366 On Base Percentage – .566 Slugging Percentage
28 Homers – 73 Runs Batted In – 14 Stolen Bases

While Shohei’s averages in comparison to both of these players are based on less playing time since he had Tommy John surgery in 2019, he was still in the lineup as a hitter for Los Angeles. Also, to be clear his pitching stats are average and likely would not get him much more than $20 million per season without his ability to be a true two-way player.

Here’s the thing folks: While he might be looking for $80+ million per season it simply does not seem based on his stats in the majors that he is worth $80+ million. Don’t take me incorrectly here he deserves to be paid for all of his skills but personally if I were running a team I would not pay him more than $55 million for a full season of his services on the mound paired with his bat and one season at that price would be generational wealth on its own.

Now let’s circle back to his willingness to sign a short term deal this winter. There are two things that are going into that. First, the obvious one which is the fact that he was still able to start as Designated Hitter in 2019 while recovering from Tommy John surgery. The other one is the fact the he is a smart man and probably realized that he might be better off signing a short term deal that is five or less years.

As a result of these two things he is unlikely to sign a one year deal this winter. Nope, he will  sign at least a two year deal with an option year, so three total years. Also, let’s not forget that thanks to the international markets the money he is paid will be mostly earned back within the first two years of him signing a multi-year deal so wherever he signs whether it is with New York, San Francisco, the Cubs, the Dodgers, or any of the other 25 teams.

With that…. let’s see if Shohei sings in the next two weeks like most analysts think he will.

If you cannot play with them, then root for them.

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