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.
When the Boston Red Sox trot out over the lush green grass and fine-combed infield dirt to face the Tampa Bay Rays in the season home opener today, they will be doing so in a stadium famously celebrating its 100th birthday. But in the 1990s, Boston almost tore the place down. The survival and transformation of the ballpark is a telling story of economic development and historic preservation.
Fenway Park was built in 1912, after then-owner John L. Taylor, readying the team for sale, scouted out a new location to replace the Huntington Avenue Grounds where Northeastern University is located today. The choice was The Fens, adjacent to Frederick Law Olmsted’s Emerald Necklace by Kenmore Square at the foot of Back Bay. It was an ambitious and state-of-the-art development for its day, though it was a bit of a tight fit – requiring the infamous shortened left field and taller wall now known as the Green Monster.
Over the years, Major League clubs built facilities on the outskirts and in the suburbs, surrounded by parking lots. But Fenway Park’s cozy urban location became a model for a downtown ballpark, accessible on foot and by transit, as teams rediscovered the value of returning to the city, beginning arguably with Camden Yards in Baltimore. Ballparks went to the suburbs and then came back to town – and Fenway Park and Wrigley Field in Chicago stayed the course throughout. They simply bypassed the fad, and endured right where they started.
Read more at The Atlantic Cities. [Image: werkunz/Flickr]
There are three big stories here. First came the rise of radio and television riches. Revenues soared, but this extra money mostly made its way into owners’ pockets because players had so little legal leverage. For example, they couldn’t change teams, and contract negotiations mostly consisted of owners telling them what they’d get paid.
That changed when the Oakland A’s made a very expensive $50,000 mistake in 1974. After failing to make a payment into Hall-of-Fame pitcher Catfish Hunter’s insurance annuity, a judge ruled his contract void — including the provision that forbid him, and all players, from negotiating with other teams. Free agency was born. And that was very, very good news for players. Over the next two decades, teams threw ever-increasing gobs of money at players. For a moment in time around the turn of the century, baseball players probably were overpaid. And that brings us to the final part of the story.
Teams have pulled back, albeit modestly, in recent years. Even the Yankees want to save money now. (Maybe the Mayans were on to something). It’s has been modest, but significant. The players union, of course, has regularly accused the owners of collusion. The more likely culprits, though, are Moneyball and the Great Recession. It turns out that years of near double-digit unemployment is bad news for ticket sales. Baseball owners now spend an even smaller share of revenue on players than their counterparts in the NFL and NBA. The latest collective bargaining agreements for the NFL and NBA pay out 48 and 50 percent of revenue respectively to the players. In 2010, baseball players took home roughly 45 percent of team revenue.