Sports and Income

From An Illustrated Guide to Income in the United States

Million-dollar salaries can be found in professional sports but some of the highest-earning players supplement their incomes with endorsement deals, e.g. Tiger Woods. However, looking at the history of Major League Baseball, we can see a dramatic increase in just the salaries of the highest-paid baseball players since the 1970s, although compared to CEOs or other celebrities their income looks more "modest".

 Read Online to view all to the graphics from my book.  These graphs were created using OmniGraphSketcher copied into Adobe Illustrator for additional annotations. 

Data from 

Freedman, Jonah. “The 50 Highest-Earning American Athletes: The Fortunate 50, 2010.” Sports Illustrated, Summer 2011. http://sportsillustrated.cnn.com/specials/fortunate50-2010/index.html.

———. “The 50 Highest-Earning American Athletes: The Fortunate 50, 2011.” Sports Illustrated, Summer 2011. http://sportsillustrated.cnn.com/specials/fortunate50-2011/index.html.

Haupert, Michael. “The Economic History of Major League Baseball.” EH.Net Encyclopedia, edited by Robert Whaples. December 3, 2007. http://eh.net/encyclopedia/article/haupert.mlb.

“2010 Baseball Team Payrolls.” About.com Baseball. July 6, 2012. http://baseball.about.com/od/newsrumors/a/2010baseballteampayrolls.htm.

USA Today. “USATODAY Salaries Databases.” July 5, 2012. http://content.usatoday.com/sportsdata/baseball/mlb/salaries/player/top-25/2010.



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NYTimes: More Than Ever, It Pays to Be the Top Executive

The New York Times had a graph on executive income for the article More Than Ever, It Pays to Be the Top Executive that shows the growing income gap between chief executives and their top subordinates. The article goes on to mention this "winner take all" behavior can be found in other industries like sports and entertainment. You can see more examples of this in the following graphs: Highest Paid CEOs Highest Paid CEOs vs Hedge Fund Managers US Income Distribution Highest Paid Athletes Highest Paid Celebrities Income/GDP Ratio Income share going to the top 5%


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Who are the high income earners?

From the New York Times this article, Lure of Great Wealth Affects Career Choices, caught my attention. It talks about a two-tier income stratum within professional jobs. Rather than earning the typical six-figure income under $400,000 there are people making millions due to:

. . . people [who] latched onto opportunities within their fields that offered significantly higher incomes [or] have moved to different, higher-paying fields — from academia to Wall Street, for example — and a growing number of entrepreneurs have seen windfalls tied largely to expanding financial markets, which draw on capital from around the world...Three decades ago, compensation among occupations differed far less than it does today.

Among these high income earners you can find:

  • Partners in Hedge funds and private equity firms
  • Real estate developers
  • Lawyers
  • Dot-com entrepreneurs
  • Scientists/entrepreneurs who sell their discoveries
  • Owners of ordinary businesses who sell them
  • CEOs
  • Wall Street investment bankers
  • Sports stars and celebrities

and the children of the super-rich

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Is $1.5 billion the highest income in the World?

It is official. I am astonished by the size of some of the incomes reported for hedge fund managers. When I first heard about the $150 to $200 million dollar incomes for CEOs and Celebrities (reported by Forbes magazine) that was impressive. But apparently that is barely enough to make the top 25 incomes for hedge fund managers in 2005:

This time there are two who break the billion-dollar barrier: James Simons of Renaissance Technologies Corp. and BP Capital Management’s T. Boone Pickens. In 2005 math whiz Simons, we calculate, earned a staggering $1.5 billion, edging out oil tycoon Pickens, who took home an equally astounding $1.4 billion from two hedge funds he quietly launched ten years ago. . .


. . .One thing that never seems to change for this exclusive club: The cost of admission keeps going up. A manager had to earn at least $130 million in 2005 to qualify for a place among the top 25 money earners, compared with $100 million in last year’s survey and just $30 million in 2001 and 2002. The 26 managers on the list made, on average, $363 million in 2005, a 45 percent jump from the $251 million the top 25 earned in 2004. The average, of course, got a boost from the billion-dollar boys, Simons and Pickens. But the median earnings also grew, jumping by a third, from $153 million in 2004 to $205 million last year.


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