Why Athletes deserve all the money they earn.

Note: This article is mainly against criticizing athletes who earn high amounts of money through playing fees or endorsements. The greater need of the hour is to make efforts towards making sports a viable profession in developing countries and I shall touch upon that in a later post.

People who watch a sport casually or follow it passionately often have a lot of comments on the money earned by sporting personalities, mainly cricketers (in India). Most criticism is centered on the fact that the high endorsement amounts paid to them will affect their on field performance. The underlying assumption here is that the athlete will have to allocate some days to his / her sponsors for shooting commercials and other promotional activities which in turn will reduce time available for training. Another school of thought opines that some sports personalities are paid mainly for their looks and not their sporting abilities, hence creating a wrong impression in the minds of young sportsmen. Many experts have made cases that the salaries paid to players in cricketers / footballers / basketball / baseball / Ice Hockey players in IPL / European Football leagues / NBA / MLB / NHL are outrageous. I beg to differ on all these points and would like to present my argument below.

Why the best deserve a higher pay

Any sport is a highly specialized field and only the best people in that field play professionally and / or get to represent their country. Now in our day to day life the top people in various fields are paid significantly more than other people in that field. We don't mind paying extra money to the best doctors or the best lawyers to render their services. Even in the private sector the top performing talent is paid significantly more than the rest of the crop. Agreed that these professionals / salaried employees are paid to do a particular work in which they excel and NOT for other activities. The case of an athlete is slightly different (somewhat like an actor).

Any athlete gets paid mainly for 2 things: 1. To play the sport 2. For promoting / endorsing any product or service. Most critics have a problem with them getting paid for point 2, pay them extra money for playing the game, reward them for any accolades they win for their team / country. However there is a slight difference between a sportsman and a doctor / lawyer or a private sector employee for that matter, a sportsman plays the game in the view of millions of fans, helps shape the view of many youngsters and is an opinion leader in many spheres of influence. Like an actor, model or a writer, the work or skill of a sportsman is viewed by many people. So like actors or models (or a writer in some instances) a sportsman should also have the opportunity to promote products or services. It goes without saying that no company will consider offering any money for endorsements to someone who is not popular. Like any other sphere of life the top performing sportsman should be paid significantly more than others in that sport. (which justifies the salaries in major sporting leagues around the world).

And if the performance of the athlete is not commensurate with his pay, I think the market will take care of it automatically. His employer (the team owner) will definitely not want to pay such a huge amount to an under performer and due to lack of good performances the popularity of the athlete will be affected which will have some effect on his endorsements.

Essentially am trying to make two main points:

1. Like the professional world or the private sector, the best athletes in their chosen sport should get paid significantly more than the other average and mediocre performers.
2. Since a sportsman (or woman) is a popular person whose skill is viewed by many people who like the game, he or she can shape opinion or influence decisions to a certain extent, hence it makes sense for companies to offer high endorsements to them.

Looks are a big plus.

Another area where people tend to complain is the fact that a good looking athlete makes much more money than what he or she deserves, from David Beckhem to Anna Kournikova to Maria Sharapova, globally critics have an issue with the fact that the endorsements which they get have little to do with their sporting prowess and more with their looks.

Lets take an example closer to home. Many friends of mine have an issue with the fact that Sania Mirza gets a lot of money from endorsements than someone like Saina Nehalwal, who is considered more talented and is much closer to the top in her sport (World No. 2 at the time of writing). I agree partly. Yes, I believe that Saina Nehalwal deserves much more endorsements and rewards than what she currently gets but I do not agree with the fact that Sania Mirza does not deserve what she gets. Agreed that she is nowhere close to the top in Tennis and that her form has been slipping. Tennis as a sport is much more popular than Badminton, its played actively in over 80 countries compared to a handful of countries which play badminton. Tennis as a sport has a much larger television audience than badminton. Of course this is not poor Saina's fault and she still remains the country's best bet to win an individual Olympic medal after our shooters. Like in real life, a manager in a large multinational company gets paid much more than his counterpart in a small local company. This is simply because he handles much more work and responsibilities because of the size of his company.

Similarly Sania caters to a much larger audience who like tennis and being one of the top Asian players in the sport has her bunch of followers. The fact that she is good looking helps her cause, but then again how many of us disagree that good looks + talent is a lethal combination. Most of us have some kind of subconscious bias for someone who is better looking (assuming talent and capability is at the same level). Yes we all would love to deny it and claim that beauty is only skin deep but seriously, if you had to sell a million soap bars would you want the plain jane to endorse it when you could get the beauty to do it? The point that I am trying to make here is that Sania should not be discriminated against because she is good looking. She is still India's top tennis player and is one of the top 5 Asian women in the game. And Asia houses one third of the worlds population, which is reason enough for her to get all those endorsements. The fact that marketing managers need to wake up and consider champions like Saina is another matter which I will discuss in another post.

Yes, good looking athletes tend to get paid more money (especially by sponsors for endorsements), but its a fact of life as explained above, the media / critics / sporting fans should channelise their energies to promote deserving performers who can get much more sponsorships rather than harping on the fact that some get lots due to their looks.

Career and Job Security

Apart from the US and a few European countries playing a sport is not considered a viable profession anywhere else in the world (unless of course you have rich parents). This is simply because an average athlete can rarely earn enough money to support him / herself forget supporting an entire family. Even the top athletes in some sports / countries earn money which can hardly to compared to their professionally employed counterparts.

Once again, lets take an Asian example. A management graduate from a top business school is a much sought after commodity in the job markets worldwide. Let consider a cliched example of an engineer-MBA. This is a person who has sacrificed many things in the 18 years of education which he or she had to endure. When I say sacrifice, I mean that engineering and management being tough streams of study where a lot of time has to be invested in studying and mastering concepts. I am only talking about the average student here, obviously there will be the super-talented people who breezed through their studies and also had the time to cultivate many hobbies on the side. Anyways, coming back to the main point, after studying rigorously for 18 years this individual is rewarded with a promising career in the corporate world. This career on an average spans 25 years (lesser if you are the type who would want to retire after earning enough to lead a comfortable life). The money earned by the person increases every year (or maybe stays the same in case there is a recession, am ignoring the possibility of a pay cut). Under normal circumstances the income of any salaried employee or professional will increase at a slightly higher pace than inflation in his country.

Now the management graduate has to spend this money on basic necessities of life and his or her family with the option of investing the savings which remain. Now consider a sportsman, typically a world class player in any sport must have started young, meaning that education must have been incomplete or affected in some manner (many US universities have sports scholarships, a phenomenon which is yet to be popular across the world). The average career of a sportsman is 10-12 years and unless you retire while you are at the top the earnings pattern follows a bell curve, starting with low income, increasing as the sportsman reaches his peak and then tapers towards the end. So essentially we take away a bunch of facts summarized below from this comparison.

1. The average career span of a sportsperson is almost half of that of a typical salaried employee or a professional like a lawyer or doctor.
2. While the expected income and savings of a typical salaried employee or professional can be predicted to a certain extent under standard assumptions (a growing economy, no recession etc), that of a sportsperson cannot be predicted due to the presence of a variety of external factors which affect his performance like form, physical fitness etc.
3. A salaried employee (or a professional for that matter) has to provide for basic necessities for self and the family from his income, a sportsman also has to provide for fitness and skill development in addition to basic necessities (mainly applicable for individual sports), so the ability to save money is slightly less.
4. Once the career of a salaried person is over, he or she can use the skills developed over the career span to start a business or providing consultancy services, in case of a sportsperson, it is safe to assume that only the top 10 percentile of the popular athletes are lucky enough to get into coaching or commentating. The rest of the people at 90th percentile or below have minimal or no use of the skills developed during the sporting career.
5. With less education that a salaried employee and no significant work skill developed during a sporting career, the probability of an ex-athlete getting a job once retired is much lower that that of a salaried person.

Now with the above assumptions (which can be proved within reasonable limits), don't you think it is fair that a person who has a career which is only half as long as that of an average individual should get the chance to at least earn at least 60-70 pct of what a normal person would earn in his lifetime withing those 10-12 years. Considering the fact that an athlete has to use both the mind and the body in unison to achieve his desired goals, it can be safely concluded that his work has a degree of difficulty which is atleast a notch higher that what is required in normal office work (where we use 80pct mind and 20pct body on a regular day). Why should the athlete not get paid extra money for this work?

If someone offered a job to you where there was no job security, a danger of getting physically injured, no additional benefits like medical reimbursements, paid leave and insurance, would you be interested in doing the job? Even if you agree to do the job wont you expect to a paid an amount of money which is significantly higher that what you earn today? Few of us would take this risk, especially when we are aware of the fact that a serious injury (for which we might not even be compensated) could mean an end to our professional career. An athlete is someone who has the guts to take such a big risk so obviously the returns for him / her must also be high (isn't this what those finance profs taught us?).