 |
| Alex Rodriguez |
It is common human behaviour to
want more. More money, more amenities, we all want more of everything. That is
human nature, but not all of us are equally fortunate. Some of us get paid
enormous amounts of money for little or no work while many others (in fact a
huge majority of people) have to work very hard to earn their keep. This I can
illustrate by a simple example. Alex Rodriguez is a thirty-six year old man of
Hispanic descent who was born in New York but grew up in Miami. He entered the
workforce directly out of high school. He currently has a job in New York City
and has been living a comfortable life since the young age of eighteen.
[1] What is his profession? He plays baseball. A majority of people from
Rodriguez’s background have to struggle to make ends meet while Mr. Rodriguez
is pocketing close to $27,500,000 per year, a figure that some of us can only
dream about. Why the disparity? That is the question!
Athletes
have a number of reasons why they earn such large amounts of money. In today’s
financially struggling world, people tend to lose their jobs and their
livelihoods very easily. Ordinary middle class people might have to work for
close to forty hours a week, mostly sitting behind a desk filing through stacks
of paperwork and pocket something in the region of $50,000 to $100,000 a year I
would say. People are paid for the value of the work they put in. There is huge
demand for sports as a pastime so athletes are values very highly by a larger
audience. However, such a statement often leads to a rather thought provoking
follow up: With education such a vital field in today’s world, why do teachers get
paid poorly? It’s quite an interesting question to put forth!
The
supply of athletes is very rare. The supply of outstanding professional
athletes is still rarer. It is basic economic knowledge that when the supply of
one commodity is very limited, the price for that commodity will be very high.
Teachers are available in abundance; this is one of the main reasons why they
get paid a lesser salary compared to a professional athlete. Of course this
will lead to the argument regarding emergency workers – policemen, paramedics
and firemen. Do they deserve a higher salary because of the nature of their
work? Firemen and policemen are exposed to a huge number of risks each time
they go out on call, while paramedics help save lives. Yet the average
firefighter in America earns around $40,000 to $60,000 a year. [2]
A
professional athlete’s life is not just a bed of roses. It has its own thorns
too. Young athletes hoping to make it to the big leagues sacrifice a lot of
their teenage years training and preparing themselves for a disciplined life.
They often tend to put in hours of hard work and sacrifice each day, something
that ordinary people might not do on a daily basis. Injury is another demon. An
athlete could suffer a career ending injury which could force them out of the
game for good. Former Washington
Redskins quarterback Joe Theismann’s injury comes to mind. [3] An athlete could also suffer an
injury that might heal but cause a massive dip in form. The case of Canadian
born English soccer player Owen Hargreaves immediately comes to my mind. [4]
Some athletes have even lost their life as a result of a horrific incident
during a sporting event. Italian MotoGP racer Marco Simoncelli, who was killed
a month ago in Malaysia when he lost control of his motorcycle, is an example.
The recent Lokomotiv Yaroslavl plane crash which killed an entire team is
another example. [5][6] There exists this high risk factor amongst
most athletes. Economic policy usually indicates that a high risk means a high
reward as well. This leads to athletes demanding such a high salary. In the
case of Alex Rodriguez or LeBron James who were drafted right out of high
school, a career ending injury could completely ruin them. Tiger Woods also
comes to mind for different reasons. It wasn’t an injury of any sort that
ruined his glowing reputation. It was a car accident and numerous allegations
of marital infidelities that caused his downfall. A UC Davis
study says that the Tiger Woods scandal cost shareholders of companies like Nike and Gatorade close to $12
billion. [7] This scandal cost us everyday citizens a lot of money
but because of the ‘Tiger Woods’ brand name he amassed huge amount of money for
himself, so technically he can still live a comfortable life with no real
worry.
 |
| LeBron James |
Athletes
are ‘skilled labourers’. As absurd as this may sound it’s true. There is only
one LeBron James, one Peyton Manning and one Albert Pujols. The demand for such
athletes is so high that their prices escalate to astronomical figures. There
might be other youngsters who aspire to make it big in the professional leagues
at some point in their lives but chances that they will be better than the best
is rare. Hockey is still looking for the next Wayne Gretzky. A high paying
salary does not guarantee success in a sport. This adds to the risk element I
was talking about earlier. Team owners and officials put a lot of trust into
big name players and pay them large amounts of money. However, the nature of
sporting events does not guarantee their success each year. English soccer club
Manchester City have spent millions of pounds in the last few years and have
only managed to win one trophy, the FA Cup in 2011; their first trophy since
1976. [8] They have just announced a record £197 million loss, the
biggest loss in English Soccer History. [9] Money can’t buy
happiness and neither can it guarantee success.
 |
| Jokes Apart: We'll see money like this soon if it continues... |
I’m
sure there are people who believe that being excessively skilled in a
particular sport is not a good characteristic. Yet, it could be these very
people who pay large sums of money to go and watch their heroes in action or
spend even larger sums of money to dress the way their favourite athletes
dress. Believe it or not, even a simple action like buying a ‘Maple Leafs’ or a
‘Blue Jays’ jersey contributes money to the coffers of the sporting franchise
and a large sum of this money is often used to pay the high salaries of the
players. Even watching the team play on television, sitting in the comfort of
your living room with a glass of pop in one hand and a bowl of popcorn,
contributes money to professional teams albeit in smaller amounts. Sporting
franchises often sign huge television and radio deals with major sports
broadcasting companies that bring in a lot of revenue to the sports teams. Much
of this money is again used to pay salaries, so indirectly we pay athletes
salaries too. Personally, I feel an athlete is entitled to earn as much they
can provided they earn it legally. I love to play soccer and even though I
always dreamt of playing professional soccer, I know I will never be able to
make it to the level of goalkeepers like Peter Schmeichel, Oliver Kahn and Lev
Yashin. [10][11][12] This is why they were professional athletes and
I will never be one. They had the skills to make it big, which means that they
were entitled to high paying salaries as a result. If as citizens we are
against the high salaries of athletes citing them as a “ridiculous waste of
money” the only suggestion I can come up with is for those individuals to
completely boycott sports teams. This would include complete and total boycott
of watching sports teams play and buying sporting merchandise. This is the only
way I can see sports franchises and athletes losing a part of their revenue. [13]
 |
| Fire Fighters: Deserving a higher pay? |
As I
mentioned earlier, it is often thought that noble professions like fire
fighters, policemen, doctor’s even soldiers deserve more money than a rookie
professional athlete who is just starting his career. The answer to this claim
is the same: there is a larger demand for emergency workers compared to the
demand for outstanding professional athletes. Because of the lower demand for
noble professionals (in most areas of the world) they get paid less compared to
professional athletes. This is completely fair in my opinion as every
profession is unique in its own way. It is due to the rare supply of good
athletes that a renowned doctor might earn $35,000 a year while a rookie
sportsman might earn $250,000 a year. Every athlete is also aware of the fact
that they are unique. If one franchise is unwilling to pay their demands
(except in the case where it is outrageous) they know that someone else in the
global market will be willing to meet their demands.
In
connection with the ‘Tiger Woods’ brand that I mentioned earlier, another way
athletes can earn huge amounts of money is via their own brand name. The ‘Air
Jordan’ range belonging to NBA superstar Michael Jordan is another classic
example. Michael Jordan reportedly earned $40 million a year from endorsements
alone. [14] It wasn’t Michael Jordan’s basketball skills alone that
earned him huge sums of money; it was his economic potential that brought him a
lot of wealth too. This merely proves the fact that fame sells, and sells big. Some
people might call this outrageous, but Jordan was able to earn most of his
money through his brand name and there isn’t much that any of us can do about
it. David Beckham is another huge global name in world sport. He reportedly
earns $40 million a year even though he is in the twilight of his career. [15]
 |
| Mr. Basketball Himself... |
To summarize, I feel that most
people will always be divided in their opinion whether or not athletes deserve
such high salaries for the little work they do. Pros and cons to such an
economic question will always exist. It is my personal opinion that an athlete
is justified to earn as much as he or she can legally because it is their right
to do so. Critics will always exist no matter where we go. It is basic economic
principles that lead us to debate over this issue. In short, since the supply
of outstanding professional athletes is very low and demand is high, their
salaries tend to go up astronomically. Athletes endure huge sacrifices and take
a lot of risks as well: such actions will cause their salaries to only go up
higher. After all, ABBA puts it so eloquently:
“Money, money, money
Must be funny
In the rich man's world.”
References:
[1]
Why Do Athletes Make So Much Money? (http://mcamp.hubpages.com/hub/athletesalaries)
MCamp,
HubPages
[2]
Do Professional Athletes Deserve Multi-Million Dollar Salaries? (http://wg.serpmedia.org/pdf_2ATE/WB2ATE_individual_units/full_color/WG2ATE_Part4.pdf)
Strategic
Education Research Partnership 2010
[3]
The
Hit That Changed a Career
Shapiro, Leonard, Washington Post Staff Writer. November 18th 2005
[4]
Anxiety affected Owen Hargreaves - Sir Alex Ferguson. (http://news.bbc.co.uk/sport2/hi/football/teams/m/man_utd/9163714.stm )
BBC
Sport, 7th November 2010
[5] Marco Simoncelli's death was
unpreventable, says MotoGP's safety officer. (http://www.guardian.co.uk/sport/2011/oct/24/marco-simoncelli-death-motogp-tributes)
Weaver, Paul. The Guardian UK. October 24th
2011
[6] Top KHL squad killed in passenger plane crash in
Russia.
RT
(erstwhile Russia Today). September 7th 2011.
[7] University Of California Davis: Graduate School of
Management. (http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20091228005221&newsLang=en) December 28th 2009
[8]
FA Cup final: Manchester City 1 Stoke City 0 Match Report.
(http://www.telegraph.co.uk/sport/football/competitions/fa-cup/8514022/FA-Cup-final-Manchester-City-1-Stoke-City-0-match-report.html)
White,
Duncan. The Daily Telegraph, May 14th, 2011
[9] Manchester City announce biggest ever loss in English football. (http://www.guardian.co.uk/football/2011/nov/18/manchester-city-biggest-ever-loss)
Conn, David. The Guardian UK. November 18th,
2011
[10]
Peter Schmeichel.
Wikipedia, the free
encyclopedia
[11]
Oliver Kahn.
Wikipedia, the free
encyclopedia
[12]
Lev Yashin.
Wikipedia, the free
encyclopedia
[13] The Coming Revenue
Revolution in Sports
Williams,
Jack F.
[14]
A Multiple Product Endorser can be a
Credible Source. (http://fulltext.ausport.gov.au/fulltext/1999/cjsm/v3n1/redenbach31.htm)
Redenbach,
Andrew. Cyber-Journal of Sport Marketing, February 2, 2009
[15]
The World's Highest-Paid Soccer Players. (http://www.forbes.com/sites/kurtbadenhausen/2011/04/20/the-worlds-highest-paid-soccer-players/) Badenhausen, Kurt. Forbes,
April 20th, 2011
Photo Credit:
Alex Rodriguez: http://jimssports.files.wordpress.com/2009/02/5111506200514821.jpg
LeBron James: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE22VtJH20VXoz_SSG61kxdYKfNCHvDo-EAE_aGVNr2lGc5BzxCpU1nmUU_RW1XUn9w1wDAmT2k5492F3vFouyrMAzqeaSwEEgpUZDcq1hNpWB68j5qSj-OlTs2bd2SZd61MKHxNUod8Y/s1600/highest_paid_athletes_11.jpg
Man City Money: http://www.sabotagetimes.com/wp-content/uploads/sheikh-mansour_1217186c.jpeg
Firefighters:https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfoKKjQoQqnCTcSYOZuslfjTTWUiMB7Y6u-b1GIDaRmVAQmSw5nnFuCxjFeXUPbyOxYRRFWC7_N09LC5R9w17B504Ktiys6C3Sx-Oug72yhzKIvq0Cnh7cqID-xMTo-ekaee3bQ5fclI5K/
Michael Jordan: http://thebestten.files.wordpress.com/2009/10/michael-jordan-xx3.jpg
Note: This piece was part of my economics term paper, which fetched me a grade on 83%. Feedback and comment are appreciated as always. I've only been studying economics for three months now and it isn't going to be by major in future either.
Also, excuse the faulty spacing of the references. For some reason I can't seen to fix it properly...
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