Type: Research
Pages: 9 | Words: 2556
Reading Time: 11 Minutes

Up to 1960’s of the XX century, sports activity was generally the destiny of fans and was considered as noncommercial, however, by the beginning of the XXI century sports had turned into a profitable business. Now, its monetary turns are enormous, and it actively competes to the other types of entertainment in the market of shows. First of all, it apparently refers to professional sports. In amateur sports, there is also various business activity: production and promotion of sports stock, sportswear, construction and operation of stadiums and other sport constructions; however, commercialization does not mention sports competitions. Speeches of the amateur athlete are not connected with obtaining the income; the participation in competitions for the professional is a source of earnings. It means that a separate segment, a labor market of professional athletes, is formed on a labor market. Such a sphere as sports has always been far from everyday life. The majority of people want shows, so they are ready to pay those who give these representations. Thus, a talented athlete can receive much more than a teacher or doctor. Nevertheless, it is reality; therefore, rules and prices for work in these areas of business are formed this way.

The commercial feature of professional sports leads to the development of those kinds of sports which, first of all, can potentially make the greatest profit: football, tennis, basketball, hockey, golf, and others. Professional sports, essentially, is a show, therefore, the profitability of these or those kinds of sport depends on spectators’ interest. Consequently, it is important to provide a high quality service to the audience so that it does not cease to exist. For this purpose, high competition should be supported during professional sports tournaments. The intrigue of the sports contest and a certain unpredictability of the result should remain. For the same purpose, young talented amateur athletes are attracted to the professional sports, and so-called sports elite is created, which implies the athletes stars who are enjoying a wide popularity in the society.

For the last decades, the number of official commercial tournaments grew considerably in the world. The compensation paid to athletes for participation in competitions and for superior results in sports also increased. The organizers of sports events try to invite the most known and popular athletes, those from whom high achievements are expected and who can provide the diverting performance. Due to the stage effect, such tournaments draw attention of the audience, sponsors, mass media which define a financial success of both sports events and athletes.

The earnings of the professional athletes grew considerably. The most known of them have managed to make a decent fortune during their sports career. Ten the richest athletes of 2003 (in million pounds) were: Tiger Woods (golf) – 57,7; Michael Schumacher (“the Formula 1”) – 35,5; David Beckham (football) – 20,4; Oscar De La Hoya (boxing) – 18,3; Roy Jones Jr. (boxing) – 14,8; Kevin Garnet (basketball) – 14,5; Shaquille O’Neill (basketball) – 13,6; Serena Williams (tennis) – 13; Alex Rodriguez (baseball) – 12,6; Michael Jordan (basketball) – 12,3.

Today, even the minimum salary of the professional athletes in prestigious sports exceeds considerably the salary of skilled workers and employees. They quite often earn more than the top managers of the large companies receiving from 2 to 5 million dollars a year. Such ratio of earnings of athletes and heads of business is observed around the world. Furthermore, in 2004, the earnings of “the most expensive” heads of the companies made from 3 to 10 million dollars in the USA. However, taking into account payments on options, it reaches 30-50 million dollars a year that is quite comparable to the income of the sports stars.

Naturally, there is a question why professional athletes, whose value for the society is rather insignificant, receive such an enormous income. Despite certain specifics, their labor does not differ cardinally from the one used in the industry, agriculture and other spheres. The product of activity of the athlete is the show, the benefit which is presented in the market of sports services. In individual sports, it is also possible to speak about the value for the whole mankind of outstanding results, the records, demonstrating the expansion of possibilities of the person. Game sports are a real show, and the value of this show for people is hardly higher than the value of medical services, education or air transportation as far as the salaries of basketball players or football players surpass the salaries of doctors , teachers or pilots of civil aviation. Why is there an enormous abyss between the salary of a teacher and a professional football player or another athlete? It is much more useful for society to teach children or cure people. It is less useful for a social development to work as a professional athlete, to create a show and to entertain people. Why is there such a big difference in the size of earnings? Where is the logic?

“The logic is that the teacher tries to make people think – and it is necessary for nobody… The football player helps to make thoughtless morons who are very easy to be operated and who are very easy to deceive…”

Some people think that the athletes’ income is unfairly high. They also should understand that it is hard work connected with a probability of receiving traumas and even disability.

Other people think that the athletes’ work costs as much as they are paid. Nobody will make up his mind to offer 2 million euros to the football player who plays in an ordinary club and the most part of time spends on a bench. To apply for a high income, it is necessary to prove that person is worthy. They are sure that such athletes like Beckham deserve such money.

On the one hand, they receive immense money on which it would be possible to afford the whole team, but on the other hand, this money has not all but only outstanding athletes. Therefore, a salary of such level is necessary to pay only in exceptional cases.

It also depends on what sum of money is meant. For many ordinary inhabitants, 5 thousand dollars a month is quite appropriate earnings, and for a basketball player, some million dollars is a commonplace. And why actually talented players bringing so much pleasure to fans cannot receive substantial money? They certainly deserve it, especially if they brought victory to the country.

The mechanism of the earning formation of “stars” (actors, athletes, musicians, writers, etc.) was described by Rozen Sh. The work of athletes is on sale on so-called “the market of stars” which is distinguished by an extreme asymmetry in the distribution of income: not many workers (athletes) earn much; the salary of the others is low. The other feature of this market is that a small number of the most talented workers serve practically the whole market. For example, the annual turnover of expenses in professional English football makes about 1 billion pounds, and employment (a number of professional football players) — only 3500 people (Aurelio).

The high income of sports stars (though the advantage of their activity for the society is not essential) can be explained with two phenomena. The first is imperfect interchangeability. The reason is that star athletes represent a limited resource, and a less talented athlete cannot replace a sports star entirely. The less the athlete can be replaced, the higher rent is appropriated to them as the demand for him/her grows disproportionate to his/her personal characteristics. The second phenomenon is that the collective nature of the sports show creates the dependence of a considerable external economy on the scale of a joint consumption. Thousands of people at the stadium and millions watching TVs can enjoy the competition at the same time. The service of the additional spectator audience demands the minimum additional expenses or efforts from the athlete.

The need of the athletes’ earnings is caused by the earnings for a living, necessary for all people. The athlete should train to show outstanding results every day for many hours. Training is a serious physical activity, which demands rest, restoration, strengthened food. Besides, training demands rooms, equipment, involvement of trainers, generally, conditions, and all this costs much. After the competitions, it is often necessary to be treated seriously owing to traumas. It is also necessary to be cured of the occupational diseases which athletes have. The athlete cannot earn all this in those few hours of days which remain from sports occupations. A sport with low preparation is not entertaining to the general public, and is not necessary in modern industrial society.

 Professional sports are accompanied by the payment for performance and the rates of the audience. It will cause interest at any level of skills of the athletes, Furthermore, it is an interest to the destiny of the money, rates and prizes. The essence of sports is a monetary interest, passion but not ideals. Any athlete who receives a monetary benefit from the public is considered to be professional. Such athlete can use sports as an extra earning in his/her free time from other work; it is not always compulsory to be entirely involved in sports performances.

Besides prizes for the victory at competitions (and the prize is a direct payment of the previous work of the athlete), there are also other forms of payment, which athletes of high level receive for their activity.

The earnings of the athletes comprise of several components: a salary, prize-winning for victories, the income of the advertizing activity. The ratio of these components for the representatives of different types of sports can be various. For example, the main source of income for football players and hockey players is a salary, boxers and tennis players receive money for the gained victories. It is extremely difficult to estimate what influences the growth of income of advertizing activity: this quite often depends not on the achievements in sport but the level of popularity of the athlete, however, the popularity can be supported at the expense of scandals and conflicts as well as at the expense of attractive appearance.

Every professional athlete should focus on how to improve his/her material well-being, how to sign a more favorable contract with the employer, how to include in this contract additional points in the form of bonuses and prizes, to sign the agreement with the advertizing companies, to open his/her own fashion line or perfumery, to write a book, etc. All this can, certainly, become true not due to altruistic motives but hard, even exhausting work of the athlete. The work of the professional athlete can be compared with a furious struggling for each earned dollar, euro or ruble.

It is crucial to note that there is a rivalry in the world of professional sports not only within one sport — its different types compete too rigidly among themselves for a share in the market of shows. Therefore, there is a gap in the income between the representatives of various sports professions not just between the athletes competing among themselves in one sport. In individual sports the differentiation of income is caused generally by personal characteristics of the athlete. In command types, the earnings of players depend not only on their personal information but also on the possibilities of the whole team or club which this or that athlete supports.

The following groups of the factors influencing the average income of professional athletes in different types of sports can be allocated:

  1. The main sources of the income of clubs, associations, leagues, federations in each sport is a sale of tickets for competitions, sale of the rights on TV and broadcasting of competitions, the income of the stadium or sports palace tenancy, the service of the audience during the competitions, income from advertizing and sponsor’s activity. As a rule, the richer the federation or the club is, the higher earnings of professional athletes are.
  2. The number of athletes-stars in different types of sports is various, but the sports stars get a considerable share of the income. In the popular sports, involving the greatest number of the audience, there are usually more stars that additionally act in films, in advertizing and take part in various shows. On the other hand, the athletes who deserve love of the audience and promote public awareness of sport attract additional money of advertisers and sponsors. Therefore, the more stars in a certain sport are, the higher the average earnings of athletes are.
  3. Market structure in a certain sport is essential. The aspiration of the organizations supervising this or that kind of sport to the maximum profit can lead to the monopolization of this sport. For example, in professional golf the market is supervised by the one and only organization, the Professional Golfers Association (PGA). Due to the absence of competitors, PGA has a possibility to regulate the sale of TV broadcasts competently. It created a uniform brand in the market of the sports goods and services for golf — all of them are on sale under the PGA logo. It makes a considerable profit for the Association. As a result, the golf stars became the most highly paid athletes of the world.
    In such a popular sport as big tennis, the market is divided between several Federations and Associations; consequently, the competitions are held the whole year, and many tournaments at the same time. It is exceptionally inconvenient not only for the audience. TV companies and advertisers also suffer: the prices on advertizing decrease, it is impossible to choose a uniform brand strategy. Many experts consider that if the new uniform association like PGA was created in big tennis, the income of professional athletes could be similar even to income in golf or even exceed it.
  4. The risk of traumatism is a crucial aspect. It is not necessary to forget that for the sake of high achievements athletes endow their health. As a rule, the higher risk of a trauma in a certain sport is, the higher its average income is. One of the most injury-prone sports is hockey. For this reason, the salary and the sums of insurance which are written down in contracts of hockey players are so high.
  5. The popularity of a certain sport plays a significant role, as well. The higher the spectators’ demand for competitions is, the more money is in it; therefore, the higher earnings of athletes are. The staginess draws attention to various sports not only of the audience but also advertisers, sponsors, television. The same sports which are not in a high demand of the audience (for example, Greek-Roman wrestling, handball, water polo, diving, shooting competitions) cannot be commercialized; so the athletes will have low earnings. Tennis, basketball, hockey, track and field athletics, mountain skiing are exposed to remarkably fast commercialization, therefore, athletes get immense prize-winnings and high salaries.

Thus, the majority of people want shows, so they are ready to pay those who provide them with outstanding performance. Moreover, a talented athlete can earn much more than a teacher or a doctor. Athletes should receive high earnings for their work. Unfortunately, many athletes have to harm their health and go on disability at the age of 40. Therefore, their hard work should be well-paid. Time has changed, and the athletes who fight desperately during the Olympic Games for the prestige of their country, for this patriotic spirit, should be paid for their work respectively.

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