Want to get rich? Just follow in the footsteps of Manny Machado and become really good at baseball.
An MLB team, the San Diego Padres, just rewarded free agent Machado with one of the largest contracts in MLB history: 10 years, $300 million, fully guaranteed.
This is an absurd amount of money, but it is neither the largest contract in overall money nor the largest contract in average money per year. That said, it’s fair to say that it is the largest contract in history due to its overall numbers. The largest overall contract is a 13 year, $325 million contract given to Giancarlo Stanton. The largest contract in average money is awarded to Zack Greinke with $34.4 million per year. Machado tops neither, but he was given the second largest overall and fifth largest average per-year contract. That’s a lot.
But what about future contracts? Bryce Harper, National League MVP in 2015, is also a free agent this offseason and is in a prime position to move past Machado’s contract. There is a strategy of waiting until someone else signs a big contract because it gives you leverage to demand an even larger contract. The scary part is that next offseason, two of the best players in baseball will be free agents. Mookie Betts, 2018 American League MVP and World Series winner, and Mike Trout, the best hitter in baseball, are both set to hit the market for record deals. Similar to the dynamic of Machado and Harper, Trout and Betts are set to break contract records.
What makes baseball so special in regards to their contracts? First, let’s look at longevity. The largest contracts are for double-digit years, longer than most NFL skill-position careers. Secondly, in the MLB, there are no max contracts like the NBA and no cap space like the NFL. This allows MLB teams to extend contracts as large as they want to as many players as they can afford. It potentially makes Yankees and the Red Sox, historically richer teams, unfairly able to attract more big-name players than other small-city teams.
In addition to the previously stated advantages, professional baseball has a huge one over other sports when it comes to contracts: fully guaranteed money. One of the major contract discussion points in the NFL is the total amount versus the guaranteed money in a sport where long term injuries are frequent. In the MLB, with all contracts — no matter how big or how small — the money is all guaranteed. If Machado got injured, he would still receive every single penny of his contract. However, if star NFL quarterback Aaron Rodgers were to have a career-ending injury, he would only receive roughly $98.7 million of the $134 million of his contract. That is a nice amount of money, but still: for players who put their body and health on the line, that guaranteed extra money is important.
So, pro tip: if you want to get rich, train your child to be an all-star baseball player.