My favorite baseball team has a problem. Actually, because they’re the Texas Rangers, and the only team in major sports to have never one a single playoff series, they have many problems. Historically, though, offense has never been one of them. The prodigious hitting talent in Arlington, magnified by a hitter-friendly ballpark, is common knowledge. Players struggling from other teams will come to the Rangers to revitalize their career, and sign a lucrative contract as a reward.
Using my basic knowledge of economics, it seems that these players have an incentive to win, yes, but a bigger incentive to put up gaudy home run and RBI numbers. Though modern statistical analysis dismisses these tools as outdated, they still are what get players recognition, MVP honors, and huge paydays.
Unfortunately, the situation becomes one where each individual acting in their own interest actually hurts the team. In the Rangers’ case, it’s a matter of the hitters swinging for the fences rather than working walks, getting on base, avoiding a strikeout, etc. The answer? Align financial rewards with better metrics, of which there are many. Or align rewards with the team’s performance.
The latter suggestion is unheard of in baseball and in all sports. Simply put, players are paid for their individual achievements, not their teams’ success. There is the old free-rider problem: a player is tempted to benefit from the exploits of others rather than pulling their weight. Some teams do offer contracts with incentives for championships, but more are incentives for individual honors, such as MVP and league leader awards.
If I were the owner of the Rangers, I’d sign offer sheets to all my players with a playoff bonus of $500,000 per series. Or I could prorate those bonuses to reflect the contributions given by each player. I’d use the revenue from playoff attendance and advertising to pay these bonuses.
