The economics of mega-millionaire athletes ... and the huge gap between rich and poor teams
ESPN's annual money survey of 278 teams across around the world found that we pay wages equal to $15.7 billion to the 7,925 athletes in 14 sports leagues in ten countries.
Of the 15 teams with the highest average salary, eight were European football (ahem, soccer) clubs. In the graph below, they are outlined in red. Baseball teams, led by the New York Yankees, took three of the top 15 spots, and they are outlined in green. NBA teams, led by the Los Angeles Lakers, snagged the last four spots. They are in solid blue.
One angle into this fun study is the "economics of superstars." Real Madrid isn't just a nice group of boys from the larger Madrid metro playing against their friends from around Spain. It's an international team, comprised of international superstars, with a rabid international audience. That the top soccer teams from Europe have a worldwide audience means they have a worldwide revenue base, especially from TV deals and licensing. That's why Barcelona can pay $217,014,221 a year to field their team, making them the most expensive sports team in the world. And it's why the NFL and NBA can afford ever-rising salaries. If sports money comes down to audience, more televisions and internet connections around the world means the rights to broadcast the world's most popular teams are getting ever-more lucrative.
Another angle is team sizes. The NBA squads are all in the top 70 of ESPN's list of highest average salaries. But their total salaries aren't nearly as high. The Indiana Pacers, for example, are number 167th in the world. Think for a second and you can intuit why. Football has teams of 11. Basketball has teams of 5. It turns out James Naismith designed a relatively labor-efficient game.
Finally, after a year where we almost lost a season of the NFL, and then the NBA, to labor disputes, let's take a look at how salaries from the top five teams in the NBA and NFL compare to the bottom five. And let's compare this with baseball. (Once again, these figures are average salary per team.)
In basketball, the average Laker salary is 85% more than the average Cavalier salary. In football, the average Steeler salary is 85% more than the average Bengal salary. (Brief aside: Poor Ohio, literally.) But in baseball, the average Yankee salary is 300%[edited] more than the average Athletics salary.
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