Wednesday, January 12, 2011

Excessive Salaries of Athletes: A Dual Analysis

Money Never Sleeps
by Neal R. Karski

As it is commonly known [such that I am not informing our dear readers of anything new], athletes in the United States make enormous sums. Their pockets are full of money earned from their teams, clubs, appearances, endorsements, entertainment bargains, and such. We know this.

But have we come to take a closer look at those particular salaries and the reasoning behind them? I believe most of us haven’t. And it has recently hit George and I to share our thoughts with you on the stated matter, because we feel necessitated to address issues of economic prosperity [or lack thereof], inequality, injustice, social well-being, media, etc.

Take, for an example, the matter of social role. Yes, pardon me, but I am referring to the utilitarian perspective in this case. What social roles do athletes have in our society? What responsibilities do they carry along with their names, clubs, brands, etc.? Lastly, we should ask ourselves if those high-paid athletes fulfill their social roles and their responsibilities, proportionally to the salaries they are paid? For the list of highest paid athletes, please visit

What social roles do athletes have in our society? I’m saddened to say there are very few. Indeed, they serve us heroes and motivators for our little children who want to become superstar athletes, or even obtain college education through following their examples. But, what if those athletes disappoint (i.e. steroids, rape, unethical behavior, and many more)? There may be no recovery from that. Athletes are icons of the world of sports; they represent themselves and their teams. At times, they endorse consumerist products, which do not benefit the society. At times, they also promote non-for-profit organizations and their goals, even though they still collect immense bonuses for such good will acts. Let’s look at this on a brighter note. There are many athletes that have contributed their wealth to the betterment of education, health, local business, and other positive foci. We are not familiar with the exact amounts and percentages; we can only hope they did it to genuinely help and serve as models, not out of crucial and quintessential publicity. Unfortunately, most of the extremely well-off athletes are overcompensated for their “ESPN-worthy skills” and talents that only act as a means of entertainment for the general public.

Take into consideration the following example.

According to Les Leopold’s article “Wall Street’s Ten Biggest Lies for 2010,” 25 hedge fund managers are worth 658,000 teachers. Now, we must ask ourselves if the economic prosperity of 25 hedge fund managers [and their clients] is worth the education provided by 658,000 teachers and the knowledge, skill and preparation for life received by millions and millions of children and young adults. What is your stance on this issue?

The sum earned by those 25 hedge fund managers is not much bigger than the total amount of money earned by the top 50 athletes in the United States. Therefore, by the means of the transitive property and the correlative comparison, we can, at this point, ask ourselves whether the salaries of the 50 richest athletes in this country are justified in regard to the paychecks of hard working teachers who commit their lives to sharing their knowledge and preparing youngsters to grow, foster values and lead. Or… speaking from a solely economic outlook… do we pay athletes millions [or hundreds of millions] of dollars to keep our economy content (even though it’s in not-that-good of a shape) or do we promote the progress of education and technology (which would then help our economy expand)? Today, it’s our time to decide.

What responsibilities to our society do athletes carry? The truth is… they carry none. They’re bound by contracts of their respected clubs and endorsement firms that generate economic revenue for their talents, skills, appearances, apparel, and such. They are paid millions of dollars, yet they do not owe society anything. And quite frankly, they probably don’t care to do so, being so well-off.

A bitter-sweet piece, with cynical elements. Hope you enjoyed.

God Bless.

The Paradox of Excessive Salaries – a Study on Sportspeople
by George A. Miu

Recently, the economic climate of the United States (and, indeed, the whole world, with very few exceptions) has been such that many have been driven to complain about relatively low salaries and high living costs. This suffering, so to speak, has been shared by most of us of the working classes and some of the more privileged, as well. However, there is one industry where salaries are almost unanimously on the rise – namely, in the world of sports.

For the purposes of today’s analysis, I will be looking at the four major leagues in the USA. Commencing with football, it is first of all noteworthy that the NFL did not even have a salary cap this year, leading many teams to sign players they could not otherwise have afforded. Furthermore, the signing bonuses of unproven rookies have been at an all-time high. Don’t believe me? Check the figures – and navigate to any sport, team, or player that you might desire on the same webpage:

While it is true that average salaries and median salaries, league-wide, have undergone a slight decrease, this has more to do with the lack of new, long-term contracts offered to non-rookies on teams. This means that fewer players were given signing bonuses, which have the capacity to seriously skew the data. The reason for this? The impending lockout (and thus cessation) of the NFL over the 2011 season – the owners and NFLPA still have not reached an agreement on the salary caps and exact division of the overall income that teams will have over the next few years. Both the players and the owners are holding out for more money! Ironic, isn’t it, that people who are in the top 0.001% of the income bracket in the USA would risk making nothing just to earn an extra few hundred thousand dollars?

The NBA paints an even more disproportionate picture. Over the past three years, the total payrolls of teams have gone up by an average of roughly 15%. This growth is clearly not seen in our economy, or pretty much anywhere else, except in the major leagues, who seem untouched by the economic crisis.

MLB payrolls, average salaries and all have been steady over the past few years. This, however, is more surprising than either the NBA or the NFL, considering how baseball attendances, TV ratings and merchandise sales have been decreasing! Don’t get me wrong – baseball is still huge here, but not at the same level as before the recession. With the exception of a few reliable markets, such as NY, Chicago and LA, even the good baseball teams (such as the Tampa Bay Rays) have been experiencing some difficulty putting butts in seats. Everyone complains about how Wall Street still pays out bonuses whether or not the economy does well – but baseball does the exact same thing!

The NHL has experienced marginal increases, too. However, these are somewhat more justified in light of the record TV ratings and attendances league-wide.

Even this justification sounds weak to my ears, unfortunately. Sports are wonderful – they inspire people and societies, they provide us with dynamic, action-packed entertainment and countless unlikely stories. But sports do not cure cancer. They do not advance society in any significant way. They will not prevent wars, or cast an eye into the murky seeds of the future to tell us which grain will grow and which will not. Sports remain an amusing past-time – a sideshow, designed exclusively to distract.

I am of the opinion that professional sportspeople work very hard to earn their money. They are oftentimes uniquely talented, and their abilities do not stretch beyond a certain age. As such, they ought to be paid more than your average worker, and have the financial independence to retire at, say, 30 or 35 or 40 – for good. But this does not equate to having a major league salary of roughly 2 million dollars a year in a lagging economy. This does not equate to an average major league career bringing in slightly over 10 million dollars. That’s around five and a half times the average lifetime income of a United States citizen. The fast cars, opulent houses and ridiculous vacations can wait. The service to humanity of professional sportspeople is not quite that high.

No doubt – many professional sportspeople are philanthropists and give back. No doubt – some of my figures or percentages may be slightly off. But I do not intend to deceive, or to pretend that the picture I paint is the be-all and the end-all. I simply illustrate a slightly worrying trend. And the people who make it all possible? Us.

We pay top dollar to go and see games. We walk around with jerseys on our backs. Ultimately, it is our money that goes into the deep pockets I spent all this time discussing. And so, the blame shifts focus from them to us. After all, I would do the exact same if I were in the position of Alex Rodriguez or Kobe Bryant or Albert Haynesworth. The people love me? They demand more of me? Well, I don’t come cheap.

The above trend is okay, so long as we understand that we are spending money that fuels a social discrepancy. But if we continue to watch, to be entertained, and to pay top dollar for it, then we cannot turn around and wag the finger at the steering while as we drive back home, flat broke.

1 comment:

  1. As "golf" is a tagged label in your blog, please note that it is the only sport (maybe tennis as well?) in which one is not paid unless they place. Players pay for their own tournament entry fees, travel costs, etc...

    Aside from endorsement and appearance contracts, it really makes a sportsman work extra hard for that income.


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