Professional Athlete Salaries

[Bob B.]

Babe Ruth was the highest paid baseball player in the world in 1930. He made $80,000 that year.

Last spring, Miguel Cabrera, to my knowledge the current highest paid baseball player in the world, signed a contract extension with the Detroit Tigers worth $292 million over ten years. Yesterday, Torii Hunter left the Tigers, and signed a one-year $10.5 million dollar contract with the Minnesota Twins. He's a very good, but not upper crust great baseball player who will turn 40 next year.

Most everyone reading this knows someone who makes 80K per year, or makes that much or more themselves. 80K per year is still a very good salary, but public high school principals make 80K per year. 80K is a salary that a lot of above averages Janes and Joes make.

84 years from now, no above average Jane or Joe will make tens of millions of dollars per year. Professional athlete salaries have way outpaced inflation.

TV contract are clearly a difference. And, probably attendees are paying more inflation adjusted dollars to go to the ball park to watch the game. Unions and free agency probably mean owners are keeping less as a percentage of of the draw than they did 84 years ago.

I'm not one to say that the athletes don't deserve every dollar they make. Very, very few people can hit a baseball thrown by the best pitchers in the world like Miguel Cabrera. If they generate the revenue, they should keep it. It's just the disparity between then and now that has me scratching my head.

Thoughts on why pro athlete salaries have grown so much compared to most people over time?

[jIM_Ohio]

Babe Ruth was the highest paid baseball player in the world in 1930. He made $80,000 that year.

Last spring, Miguel Cabrera, to my knowledge the current highest paid baseball player in the world, signed a contract extension with the Detroit Tigers worth $292 million over ten years. Yesterday, Torii Hunter left the Tigers, and signed a one-year $10.5 million dollar contract with the Minnesota Twins. He's a very good, but not upper crust great baseball player who will turn 40 next year.

Most everyone reading this knows someone who makes 80K per year, or makes that much or more themselves. 80K per year is still a very good salary, but public high school principals make 80K per year. 80K is a salary that a lot of above averages Janes and Joes make.

84 years from now, no above average Jane or Joe will make tens of millions of dollars per year. Professional athlete salaries have way outpaced inflation.

TV contract are clearly a difference. And, probably attendees are paying more inflation adjusted dollars to go to the ball park to watch the game. Unions and free agency probably mean owners are keeping less as a percentage of of the draw than they did 84 years ago.

I'm not one to say that the athletes don't deserve every dollar they make. Very, very few people can hit a baseball thrown by the best pitchers in the world like Miguel Cabrera. If they generate the revenue, they should keep it. It's just the disparity between then and now that has me scratching my head.

Thoughts on why pro athlete salaries have grown so much compared to most people over time?

You are comparing three different skills (Principal, Teacher and athlete).

If the teachers were good enough to be athletes, they would likely choose a different profession.

You also said the average teacher ($80k) and compared them to the best athlete. Most minor league athletes (the below average kind) make less than half the teachers salary. The average pro NBA basketball player makes about $1 M, but the pro Basketball players in Europe make much less than that.


My angle is this- the owners of the pro sports teams are making millions. They own a billion dollar business and make hundreds of millions in profits each year. A $10 million salary is a form of profit sharing. Is is better for the owners to make $300 million and the players $80k, or the owners make $100 million and the players get a larger cut ($20 million).

I work for an $18 million company- if we made a million in profit, I would expect to get a raise too.

[rennigade]

Theres more people alive today than ever. More people are watching sports, more people are buying tickets, jerseys, premium sports channels...the more people that watch tv the more add revenue is being generated (commercials.) Thats why athletes are paid so much. When Jordan played for the wizards...I knew a lot of people that only attended the games to see him play. Without him...they wouldnt have spent money. There is a reason they're making x amount...its because as an owner its still profitable to pay them that much.

[Bob B.]

You are comparing three different skills (Principal, Teacher and athlete).

If the teachers were good enough to be athletes, they would likely choose a different profession.

Read my post again. I didn't mention teachers, only principals and pro athletes.

I agree, and understand with everything you and the second poster posted. So, either Babe Ruth was underpaid (he probably was), and/or there is more inflation adjusted $$ flowing through the sports world (probably the biggest factor).

When someone new comes into the SA forums, flat broke an in debt, and they list out their budget that includes $180 per month for a cable package, that includes a premium sports package, that's a big part of the money flowing through professional (and college) sports.

[rennigade]

How much do you think picasso and van gogh were paid for their paintings back in the day? They probably werent fetching millions of dollars like they do today.

Supply and demand brother. Theres a huge demand right now for the best athletes in the world. Its only increasing as more and more people are interested in them. Simple as that. As much as people may have like baseball back in the day, the demand wasnt as high. They couldnt justify giving babe ruth $10 million a year when he was only generating $250k from the fans (these numbers are just examples and not factual.) Its pretty straight forward.

[ua_guy]

I agree that some of the comparisons are slightly awkward and there are other influencing factors like the fact that the sports "biz" is a lot bigger than it used to be and there's more revenue and profit moving through than ever.

I think my amazement regarding those salaries comes from what we as Americans say we value, and then to look at where our money really goes and how we monetarily reward the people in our country that we say we value most.

[greenskeeper]

Since the beginning of major league baseball (about 1876) there have only been around 18,000 players who have played in at least one game.

Quite a rare club indeed.

You also left out endorsement and product royalties.....for the "best of the best" that income makes their salary look like part-time income.

[rennigade]

Since the beginning of major league baseball (about 1876) there have only been around 18,000 players who have played in at least one game.

Quite a rare club indeed.

You also left out endorsement and product royalties.....for the "best of the best" that income makes their salary look like part-time income.

Thats 1 out of every 333,333 people on earth assuming 6 billion people exist...which was less when the stats started...more than 6 billion today. I would agree with you that it is pretty darn rare.

[Bob B.]

I think many of you missed my point.

I am not of the opinion that professional athletes are overpaid. I simply meant to report that I observed that 84 years ago Babe Ruth was making a salary that is now common.

A salary of 10s of millions of dollars per year will never be common.

I thought that was noteworthy, and worth discussion.

[bjl584]

I think many of you missed my point.

I am not of the opinion that professional athletes are overpaid. I simply meant to report that I observed that 84 years ago Babe Ruth was making a salary that is now common.

A salary of 10s of millions of dollars per year will never be common.

I thought that was noteworthy, and worth discussion.

Athletes are more like celebrities today than they were in the 30's.

Everything is on TV, is endorsed, sponsored, all over the internet, etc.

Sports are BIG money today. That wasn't so true a hundred years ago.

The popularity of sports has outpaced inflation. So the salaries have followed.

No one is selling out a stadium or fetching 10 million tv viewers to watch someone teach English.

[greenskeeper]

I think many of you missed my point.

I am not of the opinion that professional athletes are overpaid. I simply meant to report that I observed that 84 years ago Babe Ruth was making a salary that is now common.

A salary of 10s of millions of dollars per year will never be common.

I thought that was noteworthy, and worth discussion.

define common? There are more people making that kind of money outside of sports.

[HappySaver]

In answer to OP's original question: television.

[JoeP]

The answers for "who pays these guys" is easy: the team owners.

But the team owners are banking that they will earn even MORE to easily cover those salaries and put more money in their pockets.

They'll get their money from: ticket sales, television broadcast contracts, appearances (they're celebrities now), licensing, advertisers who want their brands on billboards, etc....none of which involve ME parting ways with a single dollar, because I am not a sports fan!

[GrimJack]

$80k salary during 1930 is Value: $1,083,948.83 in 2014; not as much as the really big boys but still some kind of pay.

[greenskeeper]

They'll get their money from: ticket sales, television broadcast contracts, appearances (they're celebrities now), licensing, advertisers who want their brands on billboards, etc....none of which involve ME parting ways with a single dollar, because I am not a sports fan!

almost, except chances are your tax dollars have built a stadium for them to play in.