The baseball season is over and its season of free agency has begun. With Alex Rodriguez seeking at least $350 million over 10 years — which would be the richest deal ever, by far — and mediocre 39-year-old closer Todd Jones getting a $7 million, one-year deal, you might expect to hear outcries about this apparent greed in the sports pages. But two factors make these numbers, when placed in context, much less than they seem.
First, a dollar just isn’t what it used to be. When Mr. Rodriguez signed his previous 10-year, $252 million contract in December 2000, the Federal Reserve’s index of the dollar’s value relative to other currencies was over 105. Now it’s barely over 71. In terms of imported goods, his minimum desired contract is less than his prior deal. (He opted out of the last three years to seek a new one.) As Tim Marchman writes in the New York Sun, “Imported goods and gasoline are more expensive; a dollar buys less than it once did, and so people want more of them in exchange for services.”
He has more on value in major league baseball.