Cardboard Fans in the Stands: COVID and Compensation in Major League Baseball

The pandemic’s impact on Major League Baseball (MLB) was especially dire. In 2020, a single player testing positive was enough to cancel the entire game, with a few teams sidelined for weeks. This paper looks at all free-agent contracts signed during the 2017–2023 off-season signing periods. Since this horizon spanned the pre-pandemic and post-pandemic seasons, we can examine the degree to which contract negotiations were affected by the pandemic. Using a sample of 643 free-agent signings, we found that contract compensation fell by as much as 20% during the pandemic. By 2022, however, player compensation had rebounded to pre-pandemic trends.