What people need to understand first and foremost, that the true worth of the athlete is not the value of the contract he/she signs. It goes much further than that. Most teams have their own charities and foundations, as do individual players. Many players give back to their communities in other ways by volunteering their time such as visiting children's hospitals, and even former players like ex-Blue Jay Joe Carter continue to give back years after retirement through avenues like his Joe Carter Classic golf tournament. Also, the players do not get the full value of their contract, either. 10% (or more) goes straight to their agent right off the top. And they are not immune to financial calamities either. For example, New York Mets pitcher Mike Pelfrey had 99% of his fortune frozen in 2009 when his investments were found to be part of a fraud committed by Texas financier Robert Stanford (Pelfrey had no part in the fraud). So our mental picture of these athletes living lavish lifestyles on yachts off the coast of Miami may be true in part, for some, but it is a far cry from what is the norm.
The psychology of the fan
An article written on www.bleacherreport.com discusses the psyche of a sports fan, citing scholarly articles. They found there's five reasons why sports fans care so much about their teams:
- Identity - People in a given city identify with their sports teams, as if the sports team represents the city as a whole. The success (or failure) of the team is identified as a success (or failure) of an entire city.
- Self-Esteem - People with low self esteems may find that a buffer can be created between themselves and depression when an interest in a team is fostered. It also boosts the individuals self-esteem, allowing them to succeed in other aspects of life.
- Escapism - For the few hours a week (for a football team) or several hours a week (baseball team) spent following a team allows an individual to escape their own life by rooting for their team, or against the opponent. This may also tie in to ancient tribal warfare, where individuals belonging to a tribe (team) would celebrate excessively over the defeat of a rival tribe (team).
- Eu-stress: A term that describes a state of euphoria and stress. This can be experienced even by the non-avid fan. It is also found that testosterone levels are raised in males shortly after a victory, and they are lowered after a defeat.
- Sense of belonging - For those rejected in other aspects in their life, being a ravenous follower of a sports team might give a person that sense of belonging lacking in other aspects of life.
So the two above paragraphs explain the non-financial benefits provided by athletes and sports team. So let's get down to the money.
The money athletes earn
For starters, let's begin with average salaries. Not everyone makes Alex Rodriguez money, but not everyone makes the league minimum either. For the 4 major North American sports, the averages are as follows:
So those are the average salaries, but they shouldn't be taken at face value. For example, in 2010, the average NFL salary was $1.9 million, but the median salary was $700 000. So half of the NFL salaries were at $700K or lower, so the upper echelon contracts skew the numbers.
But just talking salary numbers is meaningless unless we talk the terms of the salary. Vincent Lecavalier of the Tampa Bay Lightning is making $85M over 11 seasons, but this is hardly the norm. In fact, the average NHL career length is just over 3 seasons long. But even this is misleading, as the median NHL career is 92 games, or just over 1 full season. In fact, most sports careers average much shorter than you would believe:
- NHL (2008) - 248.45 games (3+ full seasons)
- NFL (2010) - 56 games (3.5 full seasons)
- NBA (2008) - 386.22 games (4.71 seasons)
- MLB (2007) - 907.2 games (5.6 seasons)
As you can expect, the sports that are more physically taxing have a shorter career. So the notion of athletes making hand over fist dollars is not quite the reality.
The comparisons between sports and executive salaries
Where most people fail in their argument about athletes salaries is how they compare to other professional salaries. People tend to forget that the 100 (maybe) or so players that can last in any league for over a decade tend to be the 100 top performers at what they do on the entire planet. So how do top athletes' salaries compare to other top professionals' salaries worldwide?
For starters, let's start in America. I like this comparison because their economy is having serious debt and spending issues, and as a whole is performing poorly (as of this date). Yet, the 100th top-paid American CEO (of Owens Corning) in 2011 earned $14.26 M in compensation. The one who came 98th, Robert J Stevens of Lockheed Martin, earned $120.77M in the previous 5 years. That's A-Rod money folks.
Ok, that's just American CEOs. I wanted to compare worldwide, because these athletes are the best in the world at what they do.
So let's talk about the top 100 financiers in the planet. These range from hedge fund managers to investors and everything in between. As of March 2011, the 100th person on that list (and there was a tie for 100) was Richard Chilton Jr. (a hedge fund manager), who had a net worth of $1.6B. That's billion with a B. Let's not forget, my American friends, that these hedge fund managers were the major reason why you may or may not have a pension right now.
Ok that's 100 financiers. I said 100 athletes per sport. Unfortunately, the Forbes 'billionaire' list stops short of 400 financiers. So let's expand from financiers to businessmen (and women) in general.
The 400th richest person in the world (and there was a long tied-list for this) would be Fredrik Lundberg (oddly enough, a real estate investor), with a net worth of $2.9 B. By comparison, the 100th top salary in the NHL for 2011/2012 will be Shane Doan of the Phoenix Coyotes at $4.5 M. I somehow doubt his net worth is hovering around the $2.5 B mark.
What does this say about sports salaries?
Firstly, stop complaining about athletes' salaries. The only reason we even discuss it is because A) they are made public (unlike many actors' salaries, for example) and B) we identify with them and their team. We, as fans, played (or are still playing) these very sports that we pay to watch, thus we have that sort of 'it could be us' attitude. We may even have an inflated sense of how good we are at a sport (I sure don't). We sometimes forget the occupational hazards that go with the territory, as well. The face of the NHL, Sidney Crosby, may not even start this season after suffering a concussion 8 months ago. By comparison, they are making peanuts compared to top professionals around the world. And when was the last time your local hedge fund manager made a trip to a children's hospital to sign autographs and spend a couple hours? Or when was the last time you gathered all your friends around a TV to watch the stock market? Comparatively, we (society as a whole), get much more out of athletes and teams than we get out of our local real estate investor. Money isn't the only implication when discussing the true worth of an athlete.
Michael Clifford - I'm a sports fan that follows all major sports, with hockey, baseball, basketball and American football being my most closely watched ...
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