Everyday Statistics, with Eddie Davila

- [Instructor] Baseball, perhaps the favorite sport of American statistics geeks. A sport that was upended by the book Moneyball, the story of how the Oakland A's used analytics to compete on a lean budget. The book not only inspired a statistical revolution in baseball, it inspired people in business, medicine, and many other walks of life to rethink their analytic space decision making. As the 2019 baseball season begins, let's take a look at the state of the money in baseball.

How much are players paid? First, let's look at how players' salaries have risen over the last 40 plus years. Let's begin with 1975. 1975 was a pivotal year. It was the year free agency was instituted. In 1975, the average salary in the league was about $45,000 per year. By 1990, it shot up to nearly $600,000, and in 2010, the average salary was a bit over three million dollars per year.

So, let's use salary and contract data from the 2018 season to see where things stand. Using USA Today's database of 877 Major League Baseball players, we find that the average annual salary in 2018 had risen to over 4.5 million dollars, but most players were nowhere near that number. In fact, the median salary for the 877 players was 1.45 million dollars. Only 267 of the 877 players earned at or above the 4.5 million dollar average.

And while none of us is going to weep about a Major League Baseball player's lack of job security, the average player has only 1.86 years remaining on their present contract. Even more surprising, 654 of the 877 players were on their last year of their contract. This is largely a product of how the collective bargaining agreement treats players during the first six years of their careers. But still, I find that statistic shocking.

Let's take a look at which are the best paid positions. By comparing the average league salary and the median salary, we now know the salaries in Major League Baseball are top heavy. So let's use median salaries. The three lowest median salaries go to relief pitchers, shortstops, and catchers. All of these are at least 14% below the league's median salary. The next highest median salaries are for outfielders, starting pitchers, second basemen, and third basemen.

These medians are all between 1.68 million and 2.92 million dollars, which brings us to the top median salaries in the league. In second place, are first basemen. They have an incredible 5.3 million dollar median salary. So which position beats out first base? Designated hitters. The median salary for the six players identified as only playing designated hitter was 13.2 million dollars.

Granted, there were only six players, but this is still fairly incredible. A few things to consider. While the USA Today database provided plenty of salary data, the data provided only listed a single position for each player. Quite a few players are capable of playing multiple positions, which could increase their value. In addition, outfielders were all lumped into a single category. It was not possible to compare right, left, and center fielders.

And both pitchers and hitters were not categorized as lefties or righties, perhaps another important distinction that may have provided some valuable salary insight. Finally, while these Major League Baseball players all earned between $545,000 and 34 million dollars per year, some of these baseball players will periodically get demoted to the minor leagues, where many will earn as little as $6,000 for the year.

While a lucrative professional baseball career may not be in our futures, salaries for statisticians and analytics managers continue to climb.