Robert Baumann, associate professor of economics at the College of the Holy Cross, spoke with Marketplace about left-handed pitcher David Price signing with the Boston Red Sox for a staggering $217 million, when the average baseball club is worth $1.2 billion.
Marketplace said that, according to one source, baseball salaries “have inflated 60 percent” in the last dozen years, with team revenues up by 120 percent. But there is something in the baseball market that holds down rising paychecks: a luxury cap that taxes high-spending clubs.
Baumann told the media outlet if it wasn’t for a luxury cap, “David price would be earning more money,” and “it’s stopping teams from paying even larger salaries.”
This “Holy Cross in the News” item is by Emma Collins ’16.
