A chosen few make the really big bucks, leaving many to compete for what’s left
Professional sports — large entertainment businesses that many people rely on to make a living — have a unique model. The highest-paid employees of a company — or team franchise — are usually not CEOs, but star athletes.
Look at the Washington Nationals. GM Mike Rizzo — similar to a company CEO — makes $4 million annually. Meanwhile, Nationals pitcher Stephen Strasburg had his worst year in 2018 in his nine seasons by his high standards. But because of the quirks of baseball’s contract structure, he was one of the highest-paid players in Major League Baseball in 2019, with a base salary of $35 million. The average of his deal, which he opted out of following the season, comes out to be around $25 million a year — a sum many say he earned after his stellar playoff performance.
The D.C. team had two players in the top five, with pitcher Max Scherzer fifth behind Zack Greinke, David Price, and Clayton Kershaw, at $30.3 million.
MLB has one of the most unfair salary structures for emerging stars, echoing much of the rest of society. Nats outfielder Juan Soto shared the Babe Ruth Award with Strasburg as the postseason’s top players in 2019. Soto, just 21 years old, led the team with five home runs and 14 RBIs in the playoffs, including a 1.178 OPS and three round-trippers in the World Series. He had big hit after big hit, from the NL Wildcard Game to Game 5 of the NLDS to Games 1 and 6 of the World Series. Without him, the Nats probably don’t even win the wildcard game.
Yet, Soto barely made the minimum for a player in 2019 at $578,300. Fellow outfielder Victor Robles, another key piece who finished second in the Gold Glove, made even less at $557,800.
NL Rookie of the Year Ronald Acuna was up slightly to $1 million, while AL top rookie Shohei Ohtani made only $650,000.
Aaron Judge, who has made the All-Star game twice and was American League Rookie of the Year in 2017, took home a relatively measly $684,300. Yankees teammate Jacoby Ellsbury, who hasn’t even played since 2017 due to injuries, raked in $21.1 million this year, third most on the team.
Most other Big Five sports pay their emerging stars better. In the NBA, 2018 rookie of the year Luka Doncic, made $6.6 million last season.
NFL Rookie of the Year Saquon Barkley took in $5.7 million last season.
NHL Rookie of the Year Matthew Barzal earned almost $1 million in 2018–19 in a sport where the league average is closer to that than in the MLB, NFL, and NBA.
North American soccer also doesn’t pay young stars much, with Julian Gressel, the 2017 MLS Rookie of the Year, only earning $111,250 in 2018. The top-paid player, Sebastian Giovinco, formerly of Toronto FC, took home $7.1 million last season.
Overseas, the gaps between highest and lowest paid European soccer players are more striking in certain areas. Lionel Messi of FC Barcelona in Spain raked in $84 million in 2018, while Paul Pogba of Manchester United amassed the most in the British league at $25 million. The average salary in those leagues is about $3 million.
Note the gaps:
League ……………. Highest paid athlete …………. Average player salary
NBA ….……… Stephen Curry, Warriors, $37.5M ……… ..… $6.5M
MLB …………... Strasburg, Nationals, $35M ……..……..….. $4.4M
NFL …………... Russell Wilson, Seahawks, $35M ……..…… $2.7M
EPL ………..……. Pogba, Manchester, $25M …………………. $3M
NHL ……….. John Tavares, Maple Leafs, $15.9M ………….. $2.4M
MLS …………….. Giovinco, Toronto, $7.1M ………….……… $372K
TV changed sports finances
A lot of people equate those salaries to their own, but it’s more accurate to compare them to television personalities and actors. Sports teams get most of their revenues these days through broadcasting contracts — not game tickets, merchandise, and concessions sales as it was before TV really started controlling our lives a few decades ago.
The NFL alone receives about $7 billion a year from CBS, NBC, FOX, ESPN and DirecTV to broadcast football games, or about $216 million for each team. That doesn’t even include revenue from local cable channels and radio stations that broadcast games and team-related programs, foreign rights fees, affiliate fees, and related funds.
Thus, athletes become reality TV actors. These stations need to use them to recoup money in the form of advertising. A 30-second ad during the Super Bowl in 2019 cost about $5 million. Wonder why prices for cars, beer, food, insurance, and other products advertised during such events keep rising? Watch those commercials.
The highest paid Hollywood actors and television personalities in 2018 dwarfed the earnings of most major sports stars:
Actor/personality ……….. Earnings, 2018
George Clooney …………….. $239M
Kylie Jenner ………………... $166.5M
Judge Judy ………………..… $147M
Dwayne Johnson ………..…. $124M
Howard Stern ……………..… $90M
Some CEOs of U.S. companies also pulled in more than $100 million last year. And then some of the wealthiest Americans saw their net worth rise by billions of dollars. That was led by Amazon founder Jeff Bezos, whose value jumped by $19 billion to $131 billion, and Microsoft founder Bill Gates, who saw a rise of $6.5 billion.
Meanwhile, the median income in the U.S. increased about $2,000 in 2018 to $46,800. Even Juan Soto’s relatively minute salary looks pretty good compared to that, huh?
So will that average salary of less than $50,000 ever get significantly closer to those at the top?
Perhaps if people quit following celebrities and stopped buying products advertised during their favorite television programs and sporting events on a significant scale to send a message.
Perhaps if more companies paid all of their employees more, rather just dole out massive bonuses to a few at the top.
Yeah, that’s going to happen.