I‘ve written this article in somewhat of a timely fashion as two professional sports leagues (National Football League and National Basketball Association) are months away from a lockout that could halt their 2011 season. It’s not secret that sports stars make enormous amounts of money and even the players that are less than fantastic at what they do can still pull in millions of dollars. Now, more than ever, their salaries are under the microscope because our economy continues to sit in the tank. So the question remains, asked by the gentleman concerned. Are sports player salaries out of control?
The quick answer to this question is no, not in my personal opinion. Understanding that my stance is probably the unpopular one, allow me to explain why I feel this way.
- Professional athletics is a high risk occupation in more ways than one – While I probably can’t argue that a $25,000,000 a year salary is in line with the risk involved from playing baseball, I can make this argument for low end of paid players. In order to be worth millions, every second of every day for a good long time needs to be invested in your career and one single injury can make you worthless. Then of course, you have to factor in that the millions you’ll make will only be done so for just five or so years (Varies between sports and individuals). So after spending your elementary school, high school, college and professional career playing a sport, you only get paid for a few years and then your finished. There’s a good chance you’ll be in your 30’s, with no college education and no skills of any kind other than the sport you’ve lived your entire life. Perhaps this is why 80% of NFL players end up in bankruptcy after they retire.
- They’re worth it – Walk around your town and you’ll find sports merchandise at most every corner. Jersey’s, trading cards, autographs … the amount of money spent each year on merchandise is astronomical. Then you factor in ticket prices, concessions at the game and television contracts and before you know it, the players that make up the game are well worth their millions. From a business perspective, it makes sense to keep them happy and well paid.
Now when I say worth it, I think the money they command should be put back into the player, as it currently stands. However, it would appear that the owners in both leagues are claiming massive losses and thus a reduction in player salaries (up to one-third) are being asked for. Obviously, the players aren’t happy about this and both sides of both leagues have been in a standstill over the last few months. If a compromise cannot be made, each league could face a lockout, which means a total shutdown.
A lockout would not only ensure that a player is out of work for an entire season but probably would ensure a much smaller salary if and when the league returns, as fan interest would plummet and revenue would be much lower than pre-lockout. As a player, even if you feel you’re worth more than what an owner or team is offering you, would you settle for less considering the situation? Applying this logic to your own career, would the fear of losing your job temporarily force you to accept a lower salary?
The argument could be made of course that athletes aren’t deserving of the money they make simply because of what it gives back to the community but I don’t think that has anything to do with business. Many suggest that doctors, police officers, teachers and firefighters should be paid more for the work they do, and I agree 100%. But the problem there is that the taxpayers are responsible for paying most of those salaries and if people want them to be paid more, they’ll have to do it themselves. Health care costs would rise even higher and the outrage on tax hikes would create more problems than they would solve.
It will be interesting to see how these labor talks play out over the next couple of months because for a guy like me that loves his NFL Sunday’s, no football in 2011 would not sit well. Considering the economy today, I think a reduction in player salaries is necessary and hopefully, the guys making $20 million a year can live with $18 million for the next few years.Topics: Personal Finance