Are Professional Athletes Overpaid? (Part 1)
When this question is first asked the resounding answer always seems to be an emphatic,
"yes they are very overpaid!"
But why is that exactly? What makes them overpaid in the minds of so many people?
Is that a response out of jealousy that they themselves are not making millions of dollars to play a "game"? Or is it simply that they want things to be "fair" and everyone to get roughly the same amount of pay? There doesn't seem to be a logical reason behind their feelings other than they don't like the fact that young men are making millions of dollars playing a game while they are slaving away at an office making 10 to 20 times less.
But are professional athletes really overpaid?
This is going to be a 2 part series with the first part laying out the reasons why they are potentially not overpaid and the second part will lay out the reasons why they are potentially overpaid and I will let you, the reader, decide which one has the most factual evidence to back it up.
(Part 1) Professional Athletes are not overpaid
1. They are the best at what they do.
The best engineers, accountants, scientists, lawyers, and doctors all make very high salaries because they are the best at what they do. You just don't hear about them as much because they don't perform for you on TV each week and their salaries are not public record posted in the news papers. Keep in mind that every time you are watching a professional athlete on TV you are watching someone at the very pinnacle of their craft. Any person that is at the absolute pinnacle of their profession is compensated very well.
2. Not everyone can do what they do.
Seriously... think about that. Most of what makes them so great is the natural talent that they were born with. No matter how hard I try... I will never be 6'7 with a 40 inch vertical leap or be able to run a 4.3 40-yd dash, it is just not in the cards for me. In fact, it is not in the cards for many people. When you combine those rare natural gifts with a strong work ethic and commitment to one's craft, you get what you see on TV. An athletic freak doing what you and I wish we could do. The rarity of these abilities also plays into the supply/demand equation. There is a demand for these athletic abilities, but not many people can fit in that mold, therefore the ones that do are rare and rarity commands high prices. The demand is high, but the supply is low.
3. There is no job security.
In order for a person to take a risk, they need to be rewarded proportionately to that risk. Athletes need to be paid well because there is no guarantee how long they will be able to work. Players in the NFL average only about 4 years in the league. That means they have a 4 year window to make enough money to set them up for the rest of their lives. This is part of the reason you see so many retired professional athletes filing for bankruptcy a decade or so after they retire. They don't realize that the money flow will stop once they are done playing. It is their duty to their families to make as much money as they can, while they can.
4. Often they have trouble receiving health coverage from insurance companies.
No one wants to insure a football player in case of injury because well, they get injured, often. That means that their health care bills are often significantly higher than mine or yours. A knee replacement might cost us anywhere from a couple hundred up to a couple thousand dollars out of pocket, while it might cost a professional football player with no coverage $30,000 to $50,000 in medical costs. And, a knee replacement or something of the like is a lot more likely to happen to them than to you or I! So yes, they make a lot more money than us, but they also have higher bills than us.
5. It is purely economics.
This is probably the strongest argument of the five. The market has set their prices and we are the market. Back when each professional league was in its infancy their paychecks were nothing like they are today. In fact most early baseball players and football players had to work a regular job as well as participate in their professional athletic job on the side. So what changed? You did! The second you started paying $100+ for a ticket to go see a game in person and spend $12 on a hot-dog and watch every game on TV that you can... you set the demand level for their talents. Their salaries are a direct result of your demand for their product. If we all decided we no longer wanted to pay high prices for tickets, merchandise, food, etc... and stopped watching their games on TV, what do you think would happen to their salaries?
That's right, they would plummet.
From purely an economic standpoint they are paid just about what they deserve. In some instances certain athletes are probably even underpaid in comparison to how much revenue they generate.
The reasons why it can be argued that they are overpaid will be discussed in "Part 2" tomorrow...
Live well my friends!
Sources:
https://www.theodysseyonline.com/5-reasons-athletes-are-not-overpaid
Image Sources:
http://www.xtgn.org/35048/show-me-the-money
Pixabay.com
Follow: @jrcornel
Followed! w0w, this was a very great article indeed and a hard question@that as I had to stop & think for a sec ha! But you hit it on the nail@the end speaking on the demand aspect. Exactly, it is also a business. Actors get paid every time their show airs whether it's a repeat 0r not and so, us sport viewers are paying them a percentage by watching them on t.v., going to the games and what not. I can't wait to read more 2mrw, pls do post ;)
What a great comment! Thank you! It is comments like this that keeps me writing :)
It really is a tricky subject, you can make an argument for both sides. As you mentioned, I plan to make the argument from the other side tomorrow... stay tuned ;)
"all the market will bear".
Yep, good point! :)
Well thought out.
IMO, athletes don't add value to society consistent with their pay. Often, they are actually a detriment since they're idolized by many.
But, I won't argue with the market. Obviously a lot of folks disagree with me. They go to the games and buy branded merchandise. I don't. :)
@anotherjoe But you do have to consider the many athletes who donate and give back to their communities
Not really. I can consider it if I want. But it's not required and not even necessarily the norm. It's a nice social impact, but hardly justifies the wages. If it did, then we should be giving those wages to the organizations that have the greatest positive impact on our communities, rather than athletes.
I won't argue with the market. But I don't buy the "give back a portion of my millions" argument either. Heck, give me a million and I'll see to it that 95% goes back to the community or to help with world hunger and poverty. I'll buy you a ticket to the Super Bowl too!
There you go, that will be the argument in Part 2. :) Thanks for reading!
When I read the title, I knew what I wanted to answer ('no'). But then I read the latest argument. As long as there will be a demand...
Yep, In straight dollars to dollars terms people can make the claim that they are overpaid, but strictly in economic terms it becomes a much more difficult claim. Also the amount of pay verses benefit to society can be debated as well...
To me the answer is clearly no.
There is a reason why someone is paying these athletes. This is called a market.
Yep, the market sets prices... you would be surprised (or maybe you wouldn't ha) at how many people don't grasp that and think there is some all mighty price setter in the sky that has determined athletes are worth millions... the invisible hand of the market ah yes :)