Monday, September 21, 2009

Cash Burn

We'll get to Milton Bradley later. But first, by way of Switzerland, today's lesson on baseball economics:

To best understand baseball economics, think of the sport as similar to the investment banking business: a few large market firms (that have monopoly pricing power and cozy government relations) and then a lot of boutique establishments betting the franchise on some out-of-the-money option (Milton Bradley, Alfonso Soriano, and Alex Rios come to mind). The 2009 payroll for the Yankees is $201 million; for the Florida Marlins, it's $36 million.

Hat tip: Dave Pinto

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