Professional sports have become big business, and baseball is king. In 2009, Major League Baseball (MLB) was estimated to have had revenues of $6.2 billion. With the development of mass media, increased leisure time and expansive marketing campaigns, baseball has grown to the point where even untested rookies garner multi-million dollar salaries. Athletes also have lucrative sponsorship deals, sell their own lines of sports apparel and grace the covers of video games.

IN PICTURES: Money Can't Buy Happiness, But What About Championships?

This wasn't always the case. In baseball's heyday, players sometimes had to scrape by on meager salaries or take second jobs to make ends meet. Team owners didn't offer multi-year contracts because player contracts contained a reserve clause which allowed a team to retain rights to a player even after the contract expired. Even when baseball's popularity led to teams becoming lucrative businesses, players were at a big disadvantage because they were not free agency.

Low salaries were even cited as a potential reason for the infamous Black Sox Scandal, in which players from the Chicago White Sox sought to throw the 1919 World Series. (If you had placed these wagers, you would be very rich in 2010. Don't miss Sports Bets That Would Have Made You Rich In 2009.)

The Move To Big Bucks
What prompted the change? The "reserve clause" was nullified in 1975, opening the door for players to collectively bargain for higher salaries. What did that do to players' wallets? In 1920, the average salary was $5,000 a year. It took 50 years for salaries to reach $30,000, but with the reserve clause out of the picture the average salary was $143,000 by 1980. Today's average baseball salary is $3.3 million.

The business of baseball has also changed a lot over the years, allowing teams to spend big bucks their players. Games were first televised in 1939, and by 1966 games were being sold as a national television package. Baseball teams went from being valued at less than $800,000 on average in 1920 to $286 million in 2001. The New York Yankees are worth an estimated $1.6 billion today. (We look at the financial repercussions of five sports stars' dishonorable moments, and whether they were able to rebuild their brand. Check out Stupid Athletes' Moves That Threatened Their Fortunes.)

Babe Ruth, considered by many to be the greatest baseball player of all time, made $80,000 as a member of the New York Yankees in 1930. At the time this was an incredible sum (he earned more than then-President Hoover), but compared to today's baseball player his salary looks like chump change. Here's how some of baseball's most-beloved players would have stacked up if their salaries were updated to 2010 dollars:

Ted Williams
The left fielder was a 19-time All-Star player with 521 career home runs and a .344 lifetime batting average. He had a total of 2,654 hits and an impressive 1,839 runs batted in (RBIs).

Highest salary: $125,000 (1959)
Adjusted salary (2010): $935,000

Hank Aaron
"Hammerin' Hank was a 25-time All-Star. He set the MLB record for the most career home runs with 755 and had a .305 lifetime batting average. The outfielder's career RBIs were 2,297.

Highest salary: $250,000 (1976)
Adjusted salary (2010): $960,000

Willie Mays
Considered by many to be the greatest all-around player of any era, Mays was a 24-time All-Star who knocked out 660 home runs. He earned a .302 lifetime batting average, a whopping 3,283 hits, and 1,903 RBIs.

Highest salary: $180,000 (1971)
Adjusted salary (2010): $965,000

Joe DiMaggio
The New York Yankee center fielder was a13-time All-Star, the only player to play in the All-Star Game in every season he played. His career stats include 361 home runs, a .325 lifetime batting average, 2,214 hits and 1,537 RBIs.

Highest salary: $100,000 (1949)
Adjusted salary (2010): $900,000

Mickey Mantle
Legendary National Baseball Hall of Famer Mickey Mantle was a 20-time All-Star who can boast 536 home runs, a.298 lifetime batting average, 2,415 hits and 1,509 RBIs.

Highest salary: $100,000 (1963)
Adjusted salary (2010): $710,000

Babe Ruth
"The Bambino" scored 714 home runs and finished with a .342 lifetime batting average. Arguably the most famous player to have ever played the game, Ruth brought in 2,873 hits and 2,217 RBIs.

Highest salary: $80,000 (1930)
Adjusted salary (2010): $1,050,000

Adjusted for inflation, Ruth's salary would be a little over $1 million. By comparison, the top five baseball salaries in 2010 were held by Alex Rodriguez ($33 million, or 33 times Ruth's salary), CC Sabathia ($24.3 million), Derek Jeter ($22.6 million), Mark Teixeira ($20.6 million) and Johan Santana ($20.1 million). (For more, see Top 5 Most Hair-Raising Contracts.)

The Bottom Line
Professional athletes are revered in every sport, but it seems nowadays if the top paychecks are the sport to play is baseball. (These rookies started out as nobodies and were paid accordingly - but their results were extraordinary. Read Financial Pro Sports Steals.)

Feeling uninformed? Check out the financial news highlights in Water Cooler Finance: Greece Attacks And Google Hacks.

Related Articles
  1. Personal Finance

    How to Job Search While You're Still Employed

    The best time to look for a new job is when you already have one.
  2. Personal Finance

    Top 10 Most Valuable Sports Teams in 2015

    Cleats, pads and profits: we take a look at the top 10 most valuable sports teams in the world.
  3. Entrepreneurship

    Top 10 Side Jobs You Could Start Now

    Ways to make extra cash in your spare time.
  4. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  5. Stock Analysis

    Why Walmart Raised Its Minimum Wage

    Read about the potential pros and cons of Walmart's promise to increase its minimum starting salary to $10 an hour.
  6. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  7. Entrepreneurship

    Millennials Guide: Freelancer vs. Employee

    How to decide if joining the gig economy is right for you.
  8. Savings

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  9. Insurance

    Healthcare Premiums Keep Rising, But Salaries Aren’t

    Learn how college and health insurance costs have skyrocketed while wages have stagnated, and how, given the necessity of these services, consumers are stuck.
  10. Professionals

    Career Advice: Management Consulting Vs. Law

    Compare the career opportunities between management and law using such criteria as skills needed, starting salary and work-life balance.
RELATED TERMS
  1. Hole-In-One Insurance

    A product that offers financial protection to golf tournament ...
  2. Back Pay

    The amount of salary and other benefits that an employee claims ...
  3. Payroll Card

    A prepaid card onto which an employer loads an employee’s wages ...
  4. Lilly Ledbetter Fair Pay Act

    A federal law designed to ensure equal pay for all workers, regardless ...
  5. Cash Bonus

    A lump sum of money awarded to an employee, either occasionally ...
  6. Merchandising

    Merchandising is any act of promoting goods or services for retail ...
RELATED FAQS
  1. What is the difference between AGI (adjusted gross income) and gross income?

    In the United States, individuals pay taxes based on their adjusted gross income, or AGI, rather than their gross income. ... Read Full Answer >>
  2. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  3. How can minimum wages contribute to a market failure?

    The minimum wage acts like a price floor on labor, reducing the supply of jobs available to a level below the market-clearing ... Read Full Answer >>
  4. Why is Manchester United (MANU) carrying so much debt?

    The takeover of Manchester United by the Glazer family beginning in 2005 saddled the historic club with substantial amounts ... Read Full Answer >>
  5. What are Manchester United's (MANU) largest revenue sources?

    Manchester United is one of the most popular U.K. soccer teams. Its principal stadium is Old Trafford, located in the heart ... Read Full Answer >>
  6. Does Manchester United (MANU) own Old Trafford stadium?

    Old Trafford Stadium was built for and is currently still owned by Manchester United Football Club (Man Utd.). This means ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!