The agreement between the Mets and outfielder Juan Soto to a 12-year deal for $765 million, first reported by multiple media outlets late Sunday night, is the largest contract in sports history and has dramatically shifted the economics not just of baseball, but sports in general. Base rate fallacy must be dismissed in assuming the Soto deal is an outlier.
The facts prove otherwise.
When the Los Angeles Angels and outfielder Mike Trout finalized a then-record 12-year, $426.5 million contract in 2019, it stunned the sports world. Many close followers of baseball and sports economics conjectured that because Trout was a generational talent, at the time a 27-year-old two-time MVP who was projected to be one of the best of all-time by the end of the deal, it was likely to be the ceiling for how high contracts would ascend over the next decade.
But the arrival and unmatched production and popularity of two-way Japanese phenom Shohei Ohtani in 2018 with the Angels, teaming with Trout, produced just five years later what would be the now 30-year-ld Ohtani’s startling 10-year, $700 million free-agent deal with the Los Angeles Dodgers last December. In only a 12-month span, two players have inked deals for $700 million and more.
Someone will ultimately exceed Soto’s contract. It is inevitable. He may be in high school in this country right now or playing in the Dominican Republic, where Soto was born and reared, or Japan, or perhaps another locale, but he’s out there. Comparable to Trout, Ohtani, and Soto, he’ll sign the pact while in his early prime, be no older than 28, and arguably, if not decidedly, the best player in the game and on a trajectory like that trio to be a first-ballot Hall of Famer.
He’ll be measured more against the legends of baseball — Babe Ruth, Willie Mays, Hank Aaron, Roberto Clemente, Ken Griffey Jr., Trout, Soto, Ohtani, et al. — than his contemporaries. The billionaire owner who signs him, as billionaire Mets owner Steve Cohen did in his calculus of bestowing more than a quarter of a billion dollars on Soto, will have forecast a return of at least double what they will pay out over the life of the contract.
Major League Baseball is the only North American sports league with multiple players whose deals surpass $300 million. Four play in New York: Soto, Mets’ shortstop Francisco Lindor ($341 million), Yankees outfielder Aaron Judge ($360 million), and Yankees pitcher Gerritt Cole ($324 million).
The NBA has one in Jayson Tatum ($313.9 million), but more will soon join him. Kansas Chiefs quarterback Patrick Mahomes is the only NFL player at $300 million or more ($450 million). Edmonton Oilers center Leon Draisaitl has the largest NHL contract valued at $112 million.
Soto has set the bar. But history tells us not for long.