You hear all the time about the multi-million dollar salaries star athletes earn every year. And you can’t watch 15 minutes of golf without hearing about how much Tiger Woods earns in endorsement contracts.
But what about the little guy? How about the left handed middle relief specialist that faces one batter a game and only pitches 65 innings a year? Or the football player that makes a few blocks and otherwise rides the bench? Or the 11th man on the basketball team whose sole role in life is to foul Shaq so he can miss a free throw? How much do these guys earn?
The quick answer… A lot. At least by my standards. The minimum salaries in each of the 4 major sports in the US continues to rise at a rapid rate. And rightly so. They have the talent that we pay to see. We wear the jerseys and hats, go to the games, watch them on Direct TV, live vicariously through the players in our fantasy leagues, and talk around the water cooler about how Lebron James is or isn’t the next Michael Jordan and whether or not Barry Bonds is a disgrace to the game. These games can’t be played without these role players, so why should the owners make all the scratch?
So how much is the minimum? (Click on the links for more detailed info)
- Baseball: $380k + annual increases to the minimum through 2011
- Basketball: Rookie – $412k; 1 yr experience – $664k; 2 yrs – $744k; + annual experience increases. The minimum for 10+ years is $1.17M!
- Football: $260k + increases for years experience
- Hockey: $450k + $25k annual increase through 2011-2012 season.
Remember, these are the minimums, it can only go up from there!!!
More fun facts:
Baseball – This year the minimum rose from around $340 to $380k. The owners have the ability to set the player’s salary for the first 3 years, then the player is eligible for arbitration where each side submits a salary proposal. If they do not agree, a 3rd party hears arguments then decides. It’s an ugly process that no one likes. After 6 years, the player is eligible for free agency. When free agency hits, anything can happen – from $600k role players to the $25 million that A-Rod earns every year. (A-Rod has actually earned more in a season than an entire MLB team’s 25 man roster!!!)
Basketball – This is the most elite of the major 4 professional sports as there are only 12 active players on the roster at any given time. With fewer players, there is more money to go around per player. The NBA also has salary caps, which makes salary negotiations more interesting and allows for more creative contracts.
Football – Football has the most active players on the roster, so that is a major reason why the minimum salaries are lower than the other sports. Like the NBA, the NFL also has salary caps, so you hear about players earning $6 million signing bonuses or $9 million work-out bonuses. It is amazing how many ways there are to mess with the salary caps. I would never want to be an accountant for a pro sports team! Another interesting thing about NFL pay is performance based pay, which is a pool of money that is distributed to players in a comparison of playing time to salary. In 2005 the pool of money to be split was $57 million!
Hockey – Surprisingly, the NHL has the highest minimum salary for the average player. But their Collective Bargaining Agreement also puts a cap on player salaries, which the other sports do not do. There are also limitations on which players are eligible to receive performance bonuses, which is a loophole that other sports use to increase contracts without breaking the salary caps.
What you don’t see alongside the minimum salaries is how much else these players earn. Every travel day is a day of per diem for the player. Their hotels, transportation, etc. are paid for and there is always food in the locker room. So for most pro athletes, this equals fun money or gambling money. It is usually paid out in cash at the beginning of the road trip.
Besides per diem, there are endorsements. Even Joe Benchwarmer? Yes, even Joe Benchwarmer. In high school we had a veteran MLB relief pitcher who worked out with us in the off-season. To respect his privacy, I won’t mention his name, but only a die-hard baseball fan would know who he is. His endorsements? Nike gave him a catalog and a special number. All he had to do is call in and place his order. He also got a $5000 check annually. That’s just to have Nike on an MLB field during game time. He also got plenty of free gear from other companies such as Rawlings and Louisville Slugger.
On top of all that, the players get a cut of merchandising and have player card contracts with companies like Upper Deck and Topps. The money goes into a collective pool and is split among the members of the players union. Except Barry Bonds. He owns his own likeness and licenses his rights separately. I guess every profession has a diva. 😉
Pro athletes are well compensated, but as I mentioned before, they have immense skills, they entertain, and more importantly, we are out there paying to see them. Check back later this week… I will have more info about pensions in the major professional leagues.