Reflection on Averages 4.8.22
It came to my attention recently that the Minnesota Twins, my favorite team when I thought baseball mattered, have just signed shortstop Carlos Correa to a three-year contract worth $105.3 million. For the season, he is earning $216,049 each game.
The average ticket price for a Twins game in 2019 was $32.66, up 89% from 2006 when a ticket cost $17.26. To cover Mr. Correa’s salary, if it will be covered by ticket sales, requires 6,615 souls willing to fork over the cash for each game. Attendance last year averaged 16,377 per game. In 1962, when this writer saw his first Major League game as an eight-year-old at Met Stadium, the average attendance was 17,473. Amazing when you think how the population of average folks has grown in the Twins market area since then.
The Twin's annual payroll on opening day last year was $125.2 million. In this, the Twins were below the average for MLB of $143.5 million. To cover that payroll, the team would need to average almost 24,000 ticket buyers for each of the 162 games at an average price of $32.66. Hmmm?
I think I’m above average in business knowledge--experience at least--but I fail to see how any of this makes economic sense. But I won’t argue the merits of athlete compensation for playing professional sports. We are a competitive species after all.
We have had competition in almost all areas of life since the beginning of time. The arts have “juried” competitions. Literature has writing competitions. Dance programs have awards. The theater has its Tony’s. Film its Oscars. Music its Grammys. Put two guys on the first tee, and the competition begins. Then you have the gambling industry.
We measure ourselves against others. We think ourselves above average in many ways compared to the rabble of our society. Wikipedia has a post on this. “The Lake Wobegon (sic) effect, a natural human tendency to overestimate one's capabilities, was named in honor of the fictional town. The characterization that "all the women are strong, all the men are good-looking, and all the children are above average" has been used to describe a real and pervasive human tendency to overestimate one's achievements and capabilities in relation to others.” And most of us are woefully and blissfully ignorant of this bias.
I had the good fortune several decades ago to take some risks and make some decisions that placed me and my family decidedly above average in terms of income and wealth. I can tell you there are lots of benefits to being in that position.
It may be chutzpah (it really is), but one learns that by being above average, he doesn’t have to endure the nitty-gritty of life the average person must. While trying to secure a couple of mortgages back then (the 20th century) to refinance a house and buy a North Shore retreat, a young loan officer handed me two lengthy and identical forms to fill out, while he had in his hands my full credit report. I looked at the forms, contemplating how tedious this all was, and said, “All this information is in my credit report. I don’t have time to sit here filling out these forms, so you do it if you need them.” So he did. Chutzpah with a capital C. He knew, and I knew, that I could leave and go somewhere else with no consequence to me.
So, averages are pretty important. Neither I nor my family is above average anymore in the ways our country defines it. Even my chutzpah level is way below average. Chutzpah will kick your ass eventually. But we have each other and life is good.
But I still don’t understand why all the ballplayers, skaters, politicians, and actors have to be paid so much above average while here in Cook County the average income for a household is $66,026. The median, which means half of the households are below this income level, is $53,398. The national median household income is $67,521.
Talk about Woebegone.