Are Professional Athletes Overpaid?

The salary of professional athletes is one of the few hot button topics in sports business.  Some people see the issue as a reflection on how society places sports on top of life's other priorities, while others argue this issue as a nuance of economics.  In every industry or career path, there will always be people that are either overpaid or underpaid.  In sports business, professional overpaid athletes are those who are paid big bucks, although they are not significant contributors to team success, while we also have underpaid players that help the team win and put up better stats. 

However, when we ask the question, "are professional athletes overpaid?” it requires us to focus on the industry of professional sports as a whole.  The minimum salary of major league athletes ranges from $100,000-$300,000 per year.  In the NBA, the average salary is in the ballpark of $5,000,000 a year, and the highest paid athlete for the 2008-2009 season is Kevin Garnett at $24,750,000.  Alex Rodriguez of the New York Yankees just signed a 10 year $270 million contract.  These outrageous amounts make big news when the free agency season hits.  That is why every year the question on overpaid athletes is brought up. 

So are they really overpaid?  Let us look at the arguments from both sides.


A Question Of Hard Work

Some people believe that financial rewards should come depending on how hard you have worked to achieve it.  Many look at professional athletes as lucky people who happen to be talented at shooting, throwing, or hitting a ball.  On the other hand, normal folks have to labor themselves through college, work for their tuition, and have a career as a doctor, engineer, or a banker if they want to earn a fraction of what these overpaid professional athletes get. 

Let us take the story of an average sports fan.  Imagine a young engineer who just started working for two years.  He works hard to pay the mortgage for his home, buy a car, and save for his future.  He also likes to go out with his buddies to watch a professional basketball game.  He will have to shell out his hard earned money to buy a ticket, get expensive food at the concession stands, and pay for a parking spot near the arena.  The experience of watching his favorite player will cost him hundreds of dollars for that night. 

Then, at the night of the game, he watches disappointingly as his favorite player just goes through the motions of the game, and not really exerting any effort or doing his part to make the game competitive.  In this scenario, we have lazy overpaid athletes robbing the hard working sports fan of his money.  This situation is the crux of disappointment for many sports fans, and most of the time they feel that they are probably right to question overpaid athletes if they are not ready to give their effort.

To counter the argument, many believe that effort and hard work is beside the point.  For one, hard work and effort are arbitrary and subjective.  The same young engineer could also be slacking on his job, which can compromise the productivity of his firm.  That does not change the fact that he makes more money compared to people with other careers.


Professional Star Athletes Are Paid For Rarity Of Talent

People who believe that athletes are paid fairly look at the realities of professional sports and that rarity of talent that comes with it.  It is easy to watch 10 basketball players slug it out and proclaim them as overpaid professional athletes, but these ten players are probably the ten best basketball players in the world, and they are paid because they are the best at what they do.  If the young engineer somehow becomes one of the ten best engineers in the world, will he be rich too?  Most likely.  The NBA consists of around 450 professionals from all over the world.  If we pool 450 of the best doctors in the world in a fantasy surgeon’s league, will we think that they are overpaid too?  This suggests that as long as you are the best in any field, you are most likely getting millions for your work.
 

Professional Athletes As Sports Icons

Professional sports are part glamour and part sport.  There is always a marketing force behind it.  In free market economics, we can say that this is probably the best business model that professional sports owners practice because this is what works.  Since athletes are rare in supply, they command a higher price.  Professional athletes also become icons of the sport, and a lot of people benefit economically by having them. 

A superstar athlete is a celebrity that sports fans like to watch.  They create the buzz and the publicity, so advertisers, ball boys, ticket vendors, and more will be able to keep their jobs and earn an income.  Professional athletes are icons in their own right.  It is unfair for players of rare talent to support the sports industry and be labeled overpaid professional athletes.


Are Sports Talents Replaceable

On the other end of the scale, some people believe that athletes are as unique as they are replaceable.  They argue that the sports industry does not end with a few set of players.  A lot of other players can be trained to catch a ball, and while it may be sad to see a talented player retire, someone else will eventually replace him.  This supports the argument that the pay for athletes should be capped to regulate their salaries.


Conclusion

At the end of the day, the question "are professional athletes overpaid?" depends on how we value these players.  The raging debate transcends economic and moral issues.  At the same time, people prefer to take the fact lightly and just enjoy the sport.  Is it a question of fairness, or a question of just reward for a rare skill?  Is the skill of a professional athlete rare enough to be compensated as such?  Let us leave these questions to our personal views.