EPISODE 8: THE BIG DEAL

 

Our economy is predicated on the idea that people are paid their worth to an organization. The idea not the reality. Really, you are paid based on the value your organization earns from your contributions to them. Fairly or unfairly.
The Los Angeles Dodgers paid a massive fee to secure exclusive rights to a player who pitches and hit at an elite level. In a time, where players specialize in one discipline or the other. Shohei Othani does both in a manner not seen in decades or ever. The residual ticket sales, merchandising, and expanded television markets make the deal a win win. 
If there were more than one player who could do the same or close to the same level of performance, then the deal would have appeared much lower. Since there is no readily available substitute, the price is high. That is how capitalism works for those of you who think it is all exploitative. 
There are those who feel that high compensation should be exclusive to those making contributions to society as a whole not just an individual organization. This same phenomenon works here as well. Elite doctors, lawyers, and educators can leverage the exclusivity of their skill set, quality, and value generation to extract high salaries from institutions that want to attract consumers who want to experience these services. 
It is easy to look at large contracts and feel that people are not worth the money they are being paid. But consider the cost of replacement or competing against another entity with that elusive talent. Aiming for perfection does payoff.
Please click on the image above to experience a featured piece regarding the historic baseball contract.