Why Professional Athletes’ Salaries are not overpaid
The unique individual skills, abilities, and talents in sports are highly recognized and nurtured in countries, particularly the United States. Professional athletes participate in sports for own interests and as a career where they earn their income. Players in national teams of sports such as soccer, basketball, and even athletics have been named among the richest individuals in the world. Because of this, the general public assumes that the career is overpaid. However, the income of individual players is determined by their benefits to the team (Scott Jr, Long, & Somppi, 1985). Additionally, other factors such as taxation, training, physical practice and coaching and pressure from the team also determine the salaries of the players. When professional athletes spend on the above variables, the relative salary is reduced by a significant percentage. Therefore, expounding on these elements and other challenges associated with the job will Help in understanding why the salaries of the players are not too high.
Training and physical practice is major spending for skilled athletes. This includes coaching, weight lifting, and other physical exercises to keep the body active. The players are always required to maintain physical fitness even when they are not playing. For instance, seasonal sports such as hockey and basketball reinforce training throughout the year so that they can perform well during the competition (Lyons Jr, Jackson Jr, &Livingstone, 2015). The state government does not cater for the subsidiary activities of the team members. Therefore, the players depend on the team sponsors or other donors to pay for their training. They also spend a lot of time on this training which could otherwise be used to do other jobs that can earn them revenue. The players have to pay for personal training outside the team, therefore, adding to their expenses. For that reason, the salaries which they receive are actually compensation for the time consumed and the additional expenses. Also, proficient athletes have a medical care expense. To be in a game, a player must be healthy. Most of the sports teams do not cover the health expense of the players. During the games and training, the players get serious injuries that require escalated cost of treatment. A current study showed that the average cost of replacing a damaged knee without insurance is between $35000 and $ 40000 (Mueller, 2012). In such cases, the player is supposed to cater for the high medical bill, follow up appointments, and therapy sessions. Furthermore, they are required to eat healthy so that their body can acquire energy required in the practice and the game. Doping and use of energy supplements are prohibited in all sports. If found using them, one can be prosecuted. Therefore, the players have to pay for high-cost individual medical covers. Spending on healthy food is also stressing to professional athletes since it adds to their expenses. Considering these expenses, their salaries are not overpaid. Correspondingly, the players get a lot of pressure from the team to perform. One of the determinants of players’ salaries is the contribution they make to the team. For instance, the National Basketball Association pays players according to the points per game and the field goal percentage (Lyons Jr, Jackson Jr, &Livingstone, 2015). A low performance attracts small pay and high engagement in the field corresponds to a more income. This is perceived as discrimination since the players do not have equal abilities and skills. As a result, it puts pressure on the players since they have to do better to have a good pay. The owners of the teams use this tactic to attract more sports fans thus increase ticket sales, viewership of the game and enhance merchandise sales. The revenue collected does not correspond to the players’ income because of the factors used to determine the payment.
Moreover, the majority of expert players earn a low income because of the terms of the job. Most athletes, especially in soccer sports, sign contracts with clubs to play for a specified period of time. The clubs often prefer short contracts so that they can evaluate the individual. The general understanding of sports fans is that when a player has signed a long contract, they will tend to withhold their effort and ability in performance. However, results from research conducted on a German soccer club showed that players who were on their last contract with a particular club were reluctant in putting their full ability in performance (Frick, 2016). Similarly, the ones who were in short contracts also reduced their effort levels in the games because they were uncertain if the club would agree on a renewal of the contract. Reflecting on the performance payment, professional athletes with a short contract will, therefore, earn less salary than the ones with long contracts. Similarly, most of them do not have long careers. Since the players are hired on contracts, their jobs are not permanent. When the agreements expire, the career is over and the player has to renew or join another club. Also, they are given early retirement. Since sports pose a great risk to the health of an individual, the old professional athletes cannot perform well. They are prone to diseases because of the old age making them less productive in the field. In addition, the clubs do not have pension plans for the retired players and this makes them financially unstable after they retire (Frick, 2016). The early retirement mentally pressures the proficient athletes thus making them find ways of planning for their future. As a result, they ask for more salaries so that they can contribute to personal pension schemes which will help them after their careers. Therefore, the salary is not overpaid since the players use it to secure their future. Equally, the salary they earn is a compensation for the expenses from childhood training to adulthood. Before becoming a professional athlete, one has to undergo intensive training and acquire specific skills for a particular sport (Morrison, 1996). These players had talents and abilities which were nurtured from childhood. For example, a renowned soccer player, Cristiano Ronaldo, started playing for an amateur team at the age of 7. For them to be professionals in the games, they had to pass several levels such as engaging in regional games and tournaments. For them to be persistent in their sports careers, they had to be self-determined and focused. They used a lot of resources to sharpen their skills and perfect their abilities thus the income they earn as professional players compensate for the past training and expense. Accordingly, considering this element, the general public can be able to understand why the salaries of the athletes are not high as perceived.
Besides, professional athletes’ incomes are taxed. Jock tax is a taxing system that was established in the United States and it focused on the certified players. Since sport is their employment, they are subject to taxation. It requires all employees who travel to another state to earn for their employment pay a certain amount of their incomes to that jurisdiction (Williamson, 2017). The National Football League, National Basketball Association, and the Major League Baseball teams have been paying this tax for some years now. For example, in 2016, the Chicago Cubs traveled to Cleveland in Ohio for a match against Cleveland Indians. Since they had gone for a career activity that earned them income, they had to pay jock tax to the Ohio state. Furthermore, the professional athletes have to pay an income tax to the government of the state of residence. These taxes are a burden to the professional players since it is a requirement of the law that they cannot evade. Correspondingly, the type of sport determines the income of the team which directly affects the qualified athletes’ salaries. Sports fans assume that all sports are highly paid (Am, Kaempfer, & Sennoga, 2011). Best performers in well-known sports such as soccer, basketball, and baseball make good earnings. However, professional players in sports such as handball and cricket might be earning low income because the games do not attract a lot of fans. This is the case with seasonal sports where fans have to wait for a long period before participating in another game. Also, some sports pay on an annual contract, monthly or after a game. The difference in salary difference is the popularity of the sport and the percentage of fans who determine the ticket sale for the games. This directly reflects the amount of money each player will receive. Therefore, the income of skilled athletes depends on the popularity of the sport. Furthermore, the public interest in the team also affects the income of the players. People become fans of a sport or team because they are attracted to the performance of the whole group or a particular player. When a popular athlete is present in the game, more fans will be interested in watching the match, therefore, the sale of tickets will be high (Morison, 1996). Consequently, teams with unpopular players lack a strong supportive fan-base which negatively affects their income. Therefore, teams should focus on maintaining people who are recognized by the public so that they can earn enough revenue. As studies have shown, attendance of the fans and increased viewership directly affects the salaries of the players. In the same way, popular players have a positive influence on the income of the whole team and individual athletes.
To conclude, professional athletes are perceived to be overpaid which is contrary to the real ideologies. Being a career, the players are paid according to their performance and the contributions they bring to the team. The income they earn is used for spending in training and physical practice which is a requirement for their overall fitness. Besides, they use the revenue to pay costly medical covers required for their specialized treatments and regular check-ups. Furthermore, they plan for their own retirement schemes. The majority of the proficient players have short careers that are based on contracts and they are subject to early retirement thus making them earn less income. Moreover, they have to pay to income residents and non-resident taxes which cut their revenue by a large percentage. All of these factors explain why professional athletes’ salaries are not overpaid.
References
Alm, J., Kaempfer, W. H., & Sennoga, E. B. (2011). Baseball Salaries and Income Taxes. Journal of Sports Economics, 13(6), 619-634. DOI: 10.1177/1527002511422567
Frick, B. (2016). Performance, Salaries, and Contract Length: Empirical Evidence from German Soccer. ResearchGate, 6, 87-118.
Lyons Jr, R., Jackson Jr, N., & Livingstone, A. (2015). Determinants of NBA Player Salaries. The Sport Journal, 21.
Morrison, R. J. (1996). Sports Fans, Athletes’ Salaries, and Economic Rent. International Review for the Sociology of Sport, 31(3), 257-270. DOI: 10.1177/101269029603100303
Mueller, C. (2012, March 4). Two Sides to Every Coin: Are Professional Athletes Overpaid? Retrieved from https://bleacherreport.com/articles/1089195-two-sides-to-
Scott Jr, F. A., Long, J. E., & Somppi, K. (1985). Salary Vs. marginal revenue product under monopsony and competition: The case of professional basketball. Atlantic Economic Journal, 13(3), 50-59. DOI: 10.1007/bf02304294
Williamson, C. (2017). Taxation of Income on Professional Team Athletes. Liberty University.
