Baseball and Big Money

by Paul Semendinger

January 17, 2026

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I'll start off by acknowledging that many will disagree with the conclusions I am making below. I have made these points before (and I'll make them again). I also believe the free agent signings of Kyle Tucker and Bo Bichette prove the points I am making. My conclusions go so far against the narrative that we have all been told for so so long that my premise is one that will automatically get a push-back.

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The first point is that we, as fans, do not, in any way, understand the finances of big league baseball. The numbers are so huge, so massive, that they are beyond our understanding.

In our lives, a million dollars is life changing in a dramatic way. A million dollars can change families for generations. People wish for a million dollars. In the MLB, a million dollars is a rounding error. It's loose change. It's the quarter you don't retrieve when you don't return your shopping cart at Aldi. The amount of money that flows through the game is so vast and so large it is beyond, well beyond, our comprehension. We do not deal with numbers this big. They are completely foreign to our lives.

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Next, we need to realize that the people who own baseball teams are smart business people. They simply are. One does not accrue the type of wealth needed to purchase and run a Major League team without having vast wealth and vast financial resources.

The Baltimore Orioles, for example, were sold for $1.7 billion in 2024.

Investors do not invest billions of dollars into propositions that are losing money. They simply do not.

For someone to buy the Orioles for $1.75 billion means, logically, that they believe they will make even more money on that purchase. They have looked at the numbers, they have done extensive research, and so on.

Billionaires do not get rich throwing money away. People become billionaires by making smart business decisions again and again and again.

Owning a baseball team is a smart business decision - even owning a "small market" team like the Orioles or the Tampa Bay Rays (sold for $1.7 billion last year).

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Next, smart business people who have the billions to be able to even invest in a MLB team are surrounded by other smart business people, including advisors, consultants, investment managers, accountants, and the like. We know these people are smart because they helped the owners generate the billions they have which have allowed them to buy and run the baseball teams they own.

Smart business people are not going to advise the billionaire owners to make bad investments. This is true for many reasons including, most obviously, that by giving bad advise, by costing their bosses money, these support personnel wouldn't remain employed.

These people, as well, see the value in owning a team - they see owning a team as a smart way to invest money (meaning, in other words, a smart way to make even more money).

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Quick Math Break...

If one has one billion dollars ($1,000,000,000.00) and invests that money and earns just 4.0% interest on that billion dollars, annually, that person would earn $40 million ($40,000,000) dollars in interest.

These smart business people know that they're going to make far more than four percent on their investment by owning a baseball team.

If the Orioles sold for $1.7 Billion, the interest on just that money, at 4% is $68 million dollars.

The people who buy and own, baseball teams, along with the people that advise them, know all of this.

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Smart business people also understand and employ smart people who understand how to manipulate numbers regarding all sorts of things like depreciation, insurance, tax shelters, and a host of other things that the common fan does not understand nor deal with in such gigantic numbers, in order to make their money grow in various ways and to use what is in the tax codes to their advantage. (Of course they know all this. They know what to do with very very very large amounts of money. Again, this is obvious on its face.)

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The smart business people who own baseball teams, along with the smart money mangers around them, know, better than any fan, what baseball players are worth.

They know that paying a player X amount of dollars will result in them making more than that amount of dollars on their investment in that player.

Remember, these are very smart business people who have made billions of dollars. They are not in the business of overpaying for anything. They especially understand the financials of the business they are in. (This is not the business we, as fans, are in. It is completely different on an extremely grand scale.)

The owners know that if they are paying a player $40 million, that they are going to generate (in any number of ways - tickets, media, hot dogs, beer, advertising, etc.) more than $40 million, well more than $40 million, on that player.

For the Dodgers to pay Kyle Tucker what they will pay him (and with the luxury tax, it's well over One Hundred Million Dollars in 2026) that that is a good investment for the team and for the people involved at every level of the team financially. The Dodgers would not pay more money for Kyle Tucker, or any player, if they felt it was a bad allocation of their funds. These people do not throw away money. They know what they are doing.

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I'll go back to my original point. As fans, we do not understand accounting that involves billions of dollars and all the nuances therein. (The owners and the people who advise them do understand all of this.)

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Fans look at a player getting $25 million or $40 million or $70 million, or more, per season and are amazed at the numbers being so big.

We can't comprehend the numbers and only grow comfortable with the big salary numbers over time, but only in an abstract way. (Fans might say, "Tucker isn't worth more than Aaron Judge!" But the truth is... he is, at least in the sense that his paystub isn't an over pay.)

The Dodgers just proved this. Kyle Tucker isn't a better baseball player than Aaron Judge, but he's worth the millions of dollars he is making more than Judge. He is, absolutely. What this also shows is that Aaron Judge is worth way (way) more than the $40 million annual salary he earns.

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Owners (and their financial teams) also understand that players continue to generate revenue for their franchises long after they stop paying that player's salary and that this cash flow goes on forever. They know that this is also true of championships. Flags fly forever and teams sell memories of those flags (in countless ways) forever more as well.

The Yankees are still making money off fans' memories of Derek Jeter, Don Mattingly, Reggie Jackson, Mickey Mantle, and on and on...

Yankees fans still buy products that say 1977 World Champions on them.

And on and on.

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Quick Math Break...

Yankee Stadium has 46,500 seats (approximately). If the average ticket price for a seat at Yankee Stadium is just $25.00, the Yankees bring in (before any food or merchandise) $94,162,500 on regular season ticket sales alone.

Ninety-four million dollars - just on ticket sales.

Now, factor the revenue they generate from concessions on each of those 46,500 seats. If the average person spends $25.00 in food and drink (a very low total - especially if beer is involved), that generates an additional $94,162,500.

That totals $188,325,000 brought in just on the stadium experience, just on the regular season.

(And I believe my estimates are very low. One might say, that the Yankees don't sell out every game. Fair enough. The Yankees drew about 3,400,000 fans last year. That total, with my low estimate of a $25.00 ticket and $25.00 for food is $170,000,000. A ton of money on a ticket and not much stadium food.)

Now, sure, they have to pay employees, and for straws, and napkins, and clean-up, and such, but, that's just a small fraction of the numbers I just provided - which again, I believe are vastly underrepresented.

Next add in what they make from TV and radio rights and the YES Network. Then add in the $25 million for the patch on the sleeve of the uniform. Next add in all the other advertising revenue. Think about all the ads in the stadium and on the broadcasts. Add in the on-line gambling. Add in jersey sales. And other merchandise. And on and on...

In short, there is a lot of money flowing through the Yankees (and every team's) coffers.

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Did I mention that the average fan cannot comprehend the money that baseball generates? ***

The Dodgers did not overpay for Kyle Tucker. The Mets did not overpay for Bo Bichette. Those teams know they're going to make money on what those players add to their franchises. They have all the data. They have all the information. We do not. These are sound business people making business decisions. They do not operate to lose money for themselves, their employees, or their investors.

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Now, will any of this avoid a shutdown? No. This is because there is one other factor about money that always holds true - no one feels he has enough. Ever. Everyone always wants more.

And no matter how much money one has, they don't freely just give it up, for any reason. (Anyone who wishes to prove me wrong is free to send me whatever amount of money they feel like freely giving up.)

It seems clear that the sport is generating big money. The owners want more. The players want more. They might not be able to reconcile that. A lock out, a walk out, a strike, a shutdown, or whatever will hurt the sport terribly, possibly forever. But that's a debate for another day.

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For today, it seems clear that the Dodgers and the Mets know exactly what they're doing.

We, as fans, who aren't used to numbers they are paying Kyle Tucker and Bo Bichette. We are shocked. We shouldn't be.

(Image created by Microsoft Copilot)