Mr.

Aronson

English 5-6

May 1, 2018

Professional Athlete Earnings

Professional athletes have not always made as much money as they do now. When

leagues like the NFL and the MLB were founded, many players worked other jobs during

offseason just to make a living wage, but now athletes are making more money than ever before

(Stephenson). Athletes across the NBA (National Basketball Association), NFL (National

Football League), MLB (Major League Baseball), NHL (National Hockey League), and MLS

(Major League Soccer) are all giving their athletes record amounts of money. Many factors

contribute to the enormous salaries that modern day professional athletes earn.​ ​Professional

athletes earn as much as they do because of T.V contracts and sponsorships, player

endorsements, and their salaries they receive from their team, however, many athletes don't

manage this wealth very well.

Over the last century, the professional athletes have gone from barely making a living

wage to making millions of dollars each year. The increase of professional athletes earnings can

be attributed to two main changes in sports: the introduction of television and modern free

agency. The introduction of television has probably been the most influential factor in the wages

throughout sports. During the 1950’s television became a staple of the American household. The

number of people that could watch a game “went from thousands inside a stadium to millions via
the television”. This sudden expansion in sports viewership brought along “lucrative

broadcasting deals”. These deals began to make many professional athletes significantly

wealthier (Stephenson). These television contracts are very large; right now the NFL makes $5

billion dollars a year in combined payouts from CBS, FOX, ESPN, and NBC (Adgate). This

money is then used to fund many aspects of the league but one of the main places this money

goes is into player salaries. As these sports leagues get larger and larger T.V contracts, athletes

are demanding more and more of the money (Todd).

​Along with the rise of television, free agency as we know it contributed to the salaries

we are used to seeing across professional sports leagues.​ In sports, a free agent is a player who

can sign to any team or club, meaning they are not under any contract. This means that a player

can accept the highest offer, creating competitive bidding in sports. We are used to this in

modern sports, as it has been around in some sports for nearly 45 years but this was not only the

case. Players used to stay on one team for their whole career; the only way to change teams was

getting traded. The only way to get new players was to draft them or trade for them; it created an

unbalanced atmosphere where teams would dominate certain sports due to the fact that players

would usually stay on a team for their whole career (Schottey). The competitive bidding that free

agency creates is very beneficial for athletes because they can maximise their incomes. Many

NBA players are now signing short contracts with player options; these contracts allow player to

play out their contracts but in the final year they have an option to opt out or play one more year

with the team. This means that players can access their options and either stay with the team or

leave for a better contract. Players are signing short contracts because those contracts allow
players to make the most money possible while they are still young. While players are young and

in their prime, shorter contracts allow them to be a free agent more often and accept the best

contract they can get. Modern free agency in professional sports has lead to players making

much more money due to the competition between teams.

One of the reasons that some professional athletes make as much as they do is

endorsements.​ Player endorsements have been around for a while, dating back to the MLB in the

19th century, but they didn’t use to be as lucrative as they are now. ​The top athletes in their

respective sports are earning upwards of $40 million dollars off of endorsements, far more

money than ever before made off these deals (Thorn)​. The rise of sports on television and

superstars emerging in sports was followed by the start of these massive player endorsements.

Companies saw these players as perfect advertising opportunities and began to pay them a lot of

money to use them to promote their products. Perhaps the most iconic and well-known player

endorsement is Michael Jordan’s deal with Nike. ​Jordan began his relationship with Nike his

freshman year with the bulls in 1985. At the time he had the biggest basketball endorsement with

a 5 year $2.5 million deal. In Nike’s first year selling Air Jordan products, they made $130

million and took the lead back from Reebok in the sporting shoe industry in 1990 (Baue).​ ​This is

just one example of why professional athlete endorsements are so beneficial for both parties.

They allow players to make money promoting products and allow companies to make profits off

of these hot selling products.

 The salary an athlete earns can vary tremendously depending on the sport they play. The

average player in the MLS earns $327,200 while the average NBA player earns $7.1 million; this

means that the average NBA player earns roughly 22 times more than the average MLS player.

While these are the two ends of the range, salaries do vary quite a bit between sports. The

average MLB salary is $4.5 million, the average NHL salary is $3.1 million, and the average

NFL salary is $2.7 million (Badenhausen). Part of the difference in salaries is the number of

athletes on a given team. Each NFL team has a 53-man roster so they have a lot more players to

pay than an NBA team with a 14-man roster. In total, the NFL pays $4.6 billion to their players

compared to the MLB’s $3.9 billion, NBA’s $3.2 billion, NHL’s $2.2 billion, and the MLS’s

$200.3 million (Gaines). The differences in salaries across the leagues are due, mostly, to T.V

contracts.

Many athletes expect that the money they make during their playing careers is going to

last them their whole lives but this is often not the case. When athletes receive all of this money,

there is a temptation to spend a large chunk of it right away. Many athletes also engage in

activities that they cannot support when they stop playing, such as car collections, jewelry, drugs,

gambling, and many others. To go along with this, athletes are usually young and have little

experience managing money. This can lead to them trusting the wrong people to manage their

finances and not overseeing their finances enough, letting the adviser make all the decisions.

Many athletes also find risky investments more attractive and glamorous, for instance, athletes

are more likely to invest in car dealerships, restaurants, and motion pictures. Professional athletes

are also less likely to invest in investments they find boring which adds to financial insecurity.
Due to all of the reasons, “In 2009, Sports Illustrated estimated that 78% of NFL players declare

bankruptcy or face serious financial distress within two years of ending their playing careers and

60% of NBA are broke within 5 years of retirement” (Wiles).

Over the course of the 19th, 20th, and 21st century the role of sports in society has

changed drastically and so have the salaries. Professional sports have gone from a side job to a

job that puts you in the top 1% of earners in the US. Professional sports coming under the

spotlight of American culture also allowed companies to sign large, profitable endorsement deals

with athletes that can boost the appeal of not only the companies product but the athlete as well.

The development of contracts and T.V contracts has also lead to pay differences across

professional sports leagues, with some leagues being able to pay their players a lot more. Overall

sports have become a wildly lucrative business for players but also for the leagues and

companies involved.

Works Cited
Adgate, Brad. “The Sports Bubble Is Not Bursting.” ​Forbes​, Forbes Magazine, 16 Jan. 2018,

www.forbes.com/sites/bradadgate/2018/01/16/the-sports-bubble-is-not-bursting/#1a444d

3b3bba​.

Badenhausen, Kurt. “The Average Player Salary And Highest-Paid In NBA, MLB, NHL, NFL

And MLS.” ​Forbes​, Forbes Magazine, 9 Aug. 2017,

www.forbes.com/sites/kurtbadenhausen/2016/12/15/average-player-salaries-in-major-am

erican-sports-leagues/#53d0bbed1050​.

Baue, William D., et al. "Nike, Inc." ​Encyclopedia of Major Marketing Campaigns,​ vol. 2, Gale,

2007, pp. 1131-1157. ​Gale Virtual Reference Library,​

http://link.galegroup.com/apps/doc/CX3446600203/GVRL?u=portland&sid=GVRL&xid

=b6db145Accessed 17 Apr. 2018.

Gaines, Cork. “NBA Players Have the Highest Salaries in the World, but the NFL Spends the

Most Money on Players.” ​Business Insider​, Business Insider, 27 Nov. 2017,

www.businessinsider.com/nfl-mlb-nba-nhl-average-sports-salaries-2017-11.

Schottey, Michael. “How Free Agency Changed the NFL Forever.” ​Bleacher Report,​ Bleacher

Report, 12 Apr. 2017,

bleacherreport.com/articles/1561856-how-free-agency-changed-the-nfl-forever.

Stephenson, Debbie, et al. “When Did Athletes Start Getting Rich?” ​The DealRoom​, 24 June

2014, www.firmex.com/thedealroom/when-did-athletes-start-getting-rich/.

Thorn, John. “The Dawn of Athlete Endorsements – Our Game.” ​Our Game​, Our Game, 20 Jan.

2014, ourgame.mlblogs.com/the-dawn-of-athlete-endorsements-f504cba917b0.
Todd, David. "An earnings explosion: wealthy athletes, more money." Maclean's, 9 Apr. 1990, p.

51+. Opposing Viewpoints In Context,

http://link.galegroup.com/apps/doc/A8910815/OVIC?u=portland&sid=OVIC&xid=49b5

7cfc. Accessed 19 Apr. 2018.

Wiles, Russ. "Professional Athletes Need Better Financial Education." Professional Athletes,

edited by Margaret Haerens and Lynn M. Zott, Greenhaven Press, 2014. Opposing

Viewpoints. Opposing Viewpoints In Context,

http://link.galegroup.com/apps/doc/EJ3010879225/OVIC?u=portland&sid=OVIC&xid=5

78a62b5. Accessed 19 Apr. 2018. Originally published as "Pro Athletes Often Fumble

the Financial Ball," USA Today, 22 Apr. 2012.