The most successful athletes in the largest sports leagues in the world are paid eye wateringly high salaries. Many of these sports stars rake in more in a week than an average worker makes in a year, with sums going as high as six figures.
For example, association football (or soccer) has some of the highest-paid athletes in the world. One of them, Ronaldo, is regarded by many as one of the most successful footballers of all time. Because of this record and the associated worldwide fame, Ronaldo earns one of the highest salaries in sport. In 2018 he earned $61 million from salary, prize money and bonuses, and then an extra $47 million for his work off the pitch, which mostly involves endorsing the products of various brands.
Why So Much?
Basic economic theory states that all prices are set through supply and demand. If there is more demand for a product or service than there is supply, the price will go up. Conversely, the price will go down when demand drops or supply increases.
This same principle applies to wages. For example, there is a shortage of Quantity Surveyors in the UK construction industry. This means that workers can command high salaries, even after just a couple of years in the industry, many earning above the £60,000-80,000 mark.
This doesn’t wholly explain the price that athletes can command, though. Being a professional football player, basketballer or tennis player is the dream of many, so there should be an abundance of supply in the market.
Quality Over Quantity
However, just because someone wants to be a professional footballer, doesn’t mean they can. Many people compete each year to get signed by a team, but few build lucrative careers. This would, therefore, suggest that there is, in fact, a shortage of quality supply to meet the demand in the market.
Because Fans Love Them
A simpler answer to why athletes are paid so much is that fans love to watch and support them. TV networks pay millions to have the rights to broadcast games to fans. They pay because they know they’ll make a profit from ad revenue (NFL games can often have more than 150 ads per game). Amazon also recently began showing sports on its Prime Video service, making the Amazon Fire Stick even more attractive.
Fans also love to spend money on merchandise, providing additional revenue for teams and athletes. The large following that these athletes have also helps them to get sponsorship contracts, providing further income.
Is it fair?
Ultimately, fans of sport love watching their favourite teams and athletes compete. The money that this generates is what pays large salaries but has also led to investment in broadcasting technology that improves the fan experience. While some may think it’s unfair to pay athletes millions and teachers a fraction, the fans have decided that these high salaries are representative of the value that athletes provide.