In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.

In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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