As we all know by now, David Price has signed with the Red Sox. From many reports, the Cardinals were in the mix. I wonder how much the Cardinals, when they make these offers to top end guys, mention cost of living in their pitch. It’s honestly something I haven’t heard mentioned, except from a co-worker who talks about Vince Coleman regretting going to New York for a little bit extra money.
So let’s play with the numbers real quick. The Red Sox are paying $217 million. The reports that I’ve seen have the Cardinals’ offer at $30 million or more less than that. There are different ways of computing cost of living, but for a quick estimate I used bankrate.com, which has a cost of living calculator. It tells me the cost of living is 55.12% higher in Boston than St. Louis. That would mean that a $140 million offering from the Cardinals should be equivalent. It sounds like more than that was offered.
In a comparison with some of Price’s previous home teams, Tampa Bay seems to be identical in cost of living, which honestly surprised me. Detroit is only slightly less. I didn’t find a comparison for Toronto, but I’m fairly sure that Canadian taxes are higher than Missouri.
The obvious answer here is that a player’s agent gets a cut of the negotiated salary. While cost of living matters to an individual player, the agent already has a home somewhere, and more total dollars gets them paid higher. There are also other factors at play, like the team paying for travel, housing, and food in season. In addition, not all players make their offseason home in the city that they play in.
This kind of study makes you wonder about guys like Pujols who have left for more money elsewhere in more expensive cities. Edgar Renteria also comes to mind. You also look at guys like Adam Wainwright who making $19.5 million a year would need to make over $30 million to maintain that standard of living in Boston.
In the end, the money being had is more than enough for anyone to live well on. Cost of living issues may only really matter for the everyday man living paycheck to paycheck. I’ve talked with a relative splitting an apartment in New York who pays more for rent than my entire mortgage payment for a house with more space and much more land. I remember an economics professor in college who told us about how much less money he took teaching in Rolla and still ended up ahead after adjusting for the cost of living that would have been incurred at other universities. I don’t know if the Cardinals mention it in their discussions, and I don’t expect many players have the economic background to figure this out on their own, but I think that going forward it could be a perk mentioned more. Till then, we’ll hope that the smart guys like Stephen Piscotty will figure it out and be around a while.