Blinded by Bucks

During the last week the baseball world has been abuzz over St. Louis Cardinals slugger Albert Pujols and his contract negotiations. He is in the last year of his contract and will make $16 million this year. Some reports have mentioned a figure of $30 million per year in his next contract! Stay with me if you're not a sports fan, I promise this will make sense.

Alex Rodriguez signed a $275 million deal with the Yankees in 2007 that would keep him in the pinstripes for 10 years. According to S.I.com's 2010 Fortunate 50, A-Rod picked up $33 million last year in salary. Keep in mind this doesn't include endorsements, which can be even more lucrative for some athletes like Tiger Woods. Woods only made $20.5 million from golf last year, but his endorsements raked in about $70 million despite his off the course challenges and lost sponsorships. To be fair, golfers don't have playing contracts, so their salary from the sport is totally dependent upon their annual performance as opposed to a long-term contract like an NBA, or MLB player. Even though most contracts contain performance incentives, what do you think would happen if NBA, MLB and NFL players were paid out based on how they performed in each game in real time, not based on the previous year's performance?

Yankee short-stop, Derek Jeter's new 3-year deal is supposed to be worth $51 million, which follows a 10-year, $189 million dollar contract he signed in 2000. It paid him $21 million last season. In the NFL, Oakland Raiders cornerback, Nnamdi Asomugha signed a 3-year, $45 million contract in 2009. Ironically, the NFL is America's richest sports league, but a salary cap on individual players keeps their salary averages lower than baseball and basketball.

I want to be clear, I enjoy professional sports (college even more) and I embrace a free market system. I am not against professional athletes, or anyone else making as much as they can. However, I am seriously questioning a culture that embraces such extreme compensation disparity when you consider the actual services being offered. Our values in regard to pay equity are absolutely out of control. Consider the salaries above as you read the following.

The average salary for a South Carolina public school teacher is approximately $47,000 and that figure is skewed to the tenured side of the bar. The average TSA Screener who makes sure there are no explosives on your next flight makes anywhere between $29,143-$39,600 per year! According to a national job postings website, the average police officer in South Carolina makes $46,000, which is 8% lower than officer salaries in nationwide job postings. The same website puts hospital emergency room doctor salaries at $197,000 per year. The average salary for the nation's governors is $128,735, and South Carolina's governor ranks 38th among the states in salary! The average base pay salary for an E3 level U.S. soldier is approximately $20,750. When's the last time a professional athlete stared down enemy combatants and hostile fire for a little more than $20,000? Many athletes make far more in one game than these positions make in an entire year!

I'm not advocating a Robin Hood mentality that takes from the players and gives to the teachers, police, etc., although that might not be a bad idea, lol. I'm simply saying that we need to seriously examine our values. A local school teacher, police officer, or ER physician, has a far greater impact on my world than Peyton Manning, and I'm a diehard Colts fan!

If you think this has always been the case consider the following from the International Journal of Sports Finance:

"The current system (of escalating player salaries and lack of revenue sharing) is a prescription for disaster. But whether the disaster is just around the corner or will take place 10 years from now, I don't know" (Nightengale, 1990). This quote from Steve Greenberg, the former deputy commissioner of Major League Baseball (MLB), reveals baseball administration's concern over soaring league salaries. Greenberg's statement followed a period when the average salary mushroomed from $29,303 in 1970 to $597,537 in 1990. Since then, the average MLB player's salary has climbed to $3.15 million for the 2008 season. Even rookies and marginal players have witnessed sizable leaps in their wages as the minimum annual salary increased from $12,000 in 1970 to $390,000 in 2008. To put the players' relative wage increase into perspective: over the sample period, MLB salaries rose from slightly less than double the average American's wage rate in 1961 to over 70 times the average wage rate in 2005.

There is definitely something wrong with a society that rewards professional athletes over 70 times the national average wage rate! Is it me, or should an average professional baseball player be paid $3.15 million while the person responsible for leading a state of 3-4 million people is paid around $123,000 per year?

I wish I had an answer. Let me know if you've got one.