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Among new crop of ultrarich players, MLB mashes NFL

Bill Briggs
Aaron Rodgers and Alex Rodriguez
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Once the unquestioned national pastime, Major League Baseball retains first place in one fat financial stat: 21 ballplayers now earn $20 million or more per season as compared to the NFL, where only three players have hit that level.

On the cusp of the World Series opener pitting St. Louis against Boston, is the salary disparity between the stars of summer and the big boys of fall a fiscal hint that the grand old game is perhaps poised to catch or even slide past the National Football League as America's most revenue-rich sport?

Inside baseball at least, that's certainly a hope.

"Baseball players' salaries reflect the level of revenue that's generated in a free-market system," said Greg Bouris, director of communications for the Major League Baseball Players Association. In other words, capitalism doesn't lie.

Outside baseball, however, it is that very same players' union that many experts cite when explaining why MLB has seven times as many $20 million players as does the NFL.

"That union is just flat-out better at redistributing income than [unions] in the other leagues," said Allen Sanderson, a senior economics lecturer at the University of Chicago who teaches the economics of sports.

"I've always looked at this ... as two pigs, one trough," he said. "There's nothing in economic theory that says the owners [in any league] deserve all the money they're getting, and there's nothing that says the players deserve it, either.

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"This is not a free market on either side, but rather a legal cartel that brings in the loot, and then it's just a matter of who gets what share of it," Sanderson said. "It's also a matter of the effectiveness of the players' union in each league and their bargaining strength, savvy and strategy vis-à-vis the owners."

A spokesman for the National Football League Players Association declined to comment for this article.

Now, a quick check of the scoreboard. According to Forbes, the NFL generates revenue of more than $9 billion a year, and that's likely to rise. NFL Commissioner Roger Goodell has said that his long-term goal is for the league to reap $25 billion in annual revenue. MLB's yearly revenue is about $7.5 billion, reports

In 2013, at least, megamoney contracts won't buy a World Series crown. This season, no Cardinals and no Red Sox players earn $20 million, according to a variety of tracking sources, including the Associated Press and Baseball Reference. But the runners-up in each league were laced with such wallet-heavy players: Detroit had three and Los Angeles four.

Experts say the differences in elite-player wages between baseball and football also is rooted in their relative roster sizes and in how all those revenues are doled out by the league offices. Each MLB club allows an active roster of 25 players, while NFL teams carry 53.

(Read more: Giants co-owner Tisch hopes for a football miracle)

While the NFL is essentially a national business in which the league office negotiates and inks network TV deals for all its teams, MLB is built on a series of local economies. While some baseball games are aired from coast to coast—such as post-season clashes—each baseball franchise strikes a TV deal with a regional broadcaster to carry its games during the regular season.

That creates the infamous "big market" and "small market" clubs that tilt the league's economy, giving teams like the New York Yankees and Philadelphia Phillies the ability to afford four $20 million players apiece.

"Unlike the stable, 'money-in-the-bank' revenues of an NFL team, the primary revenues of a baseball team—attendance, ticket price increases, luxury suite rentals, and local broadcast ratings and subsequent rights fees—can rise and fall with winning and losing seasons," said Alex Hillsberg, who creates content for FinancesOnline, a personal money matters website based in Miami.

"The business model [of MLB] is essentially Darwinian," Hillsberg said. "The fittest survive. To be the fittest, they need players with the greatest potential to contribute to this fitness—i.e., more wins. MLB teams are willing to pay more to get this advantage."

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