Giving up millions to stay home
"I like the town, I like the city, but at the same time I have to think about my family, like they would about their team. Like I said, this is business.”
That was Yadier Molina, an eight-year MLB veteran who has spent his entire career with the St. Louis Cardinals. Molina made that statement when asked if he’d be willing to give up a larger contract elsewhere to stay in St. Louis. In sports contracts, this is called the “hometown discount.” Molina faced many of these questions after Albert Pujols, also a career Cardinal, followed the money to Los Angeles, away from a worshipful fanbase, a restaurant and a charity.
Detroit Lions defensive end Cliff Avril, facing free agency this offseason, made a similar statement.
“There’s no such thing as a hometown discount in the NFL. Once you can’t play anymore, they’re going to let you go, so you definitely have to strike gold when you can.”
Avril and Molina make great points. They are employees, and there is usually little loyalty displayed on the part of the team. Career-ending injuries are always just a play away. And with some leagues like the NFL allowing you to cut players outright, there’s a big incentive to take the money wherever it is.
There are some players who apparently disagree. Here’s a surprising quote from the Phillies’ Shane Victorino:
“I don’t plan on going anywhere. I'm willing to give up free agency. A lot of guys won't … but what's important to me is I want to be here. I love playing here. My family loves the city. I love the city.”
Angels pitcher Jered Weaver signed a five-year $85 million extension with the Angels in 2011, when he could have gotten a total deal worth more than $100 million elsewhere. Weaver grew up 70 miles away, went to college across town and had spent his entire seven-year career with the Angels. Maybe some of Weaver’s willingness is due to the fact that it’s actually his hometown.
There are some business reasons to give these breaks. Veteran agent Jack Bechta, writing over at National Football Post, said agents are willing to take a little less if they get guaranteed money earlier. Incumbent teams can get a 5 to 10 percent discount if the contract extension is given before the start of training camp in the final year of his contract.
Put yourself in these shoes. If you have eight years of experience at your company, would you be OK with your employer paying you 10 percent-plus below market value just because you’re already here? I wouldn’t be. That’s not rewarding, that’s taking advantage of me. I’d leave. I think it makes even more sense when that 10 percent could be $10 million.
Fans and sports commentators love talking about the hometown discount. A hometown discount means that a player has a love for and dedication to a city, like fans do. But players aren’t fans of the teams they play on. They’re doing a job. The loyalty and love of the fans doesn’t get you respect among your peers or reflected in an account balance. You can’t expect players to give up money just because they’re already wealthy, just like you wouldn’t, especially if you’ve earned it.
Bill Sayer is a financial analyst in the insurance industry and holds a degree in economics. A native of Upstate New York, Bill enjoys watching college football, the NFL, NHL and Premier League soccer from his home in Palmyra. Have a suggestion, link or question?