The Peter Principle is about being promoted to a job that demands different skills. Athletes are promoted to jobs with the same skills, so the principle doesn't apply.
Does that really happen all that often? Pitchers are usually paid highly. Would a really good catcher get promoted to pitcher? Why wouldn't businesses treat it mostly the same? Of course sometimes people try out a new role, but if they aren't good they are often fired or go back to their old role.