International Sport

As a kid, most of us will have dreamed about scoring a touchdown, or landing that crucial dunk. We’ll have imagined hitting the home run to win the game, or thought about scoring the penalty to win the league. We’ll also probably have thought about the vast amounts of money, supermodel girlfriends and massive houses, right? These things all go together with being a top flight sportsman in modern times.

It sounds like the dream job, and to an extent it’s easy to see why: playing a sport you love all day and being paid through the nose for your efforts. Take the example of soccer star David Beckham and his recent move to MLS – in excess of $200 million over 5 years, which isn’t bad. That works out at a total of 17 full days on the soccer pitch over 5 years for all that money. Not bad going, huh? But why is this the case? Why should these sportsmen receive so much for doing their job?

The fact of the matter is that $200 million could build several brand new hospitals and schools, and could go some way towards social security. It’s not a lot in national scale terms, but it’s a lot for one man to be earning for kicking a ball around a park. The money used to pay these sportsmen comes from a variety of sources. Sports clubs take in primarily gate receipts from spectators in addition to the sale of snacks and merchandise at each event. In addition to that, they secure massive sponsorship deals and additionally strike up contract with TV channels to broadcast their progress. As if this wasn’t enough, they also trade sportsmen’s contracts for millions, and receive financial rewards along the way for winning competitions.

At the end of the day, sport is a business and players are its assets. Without sportsmen, teams could not play, and thus the value paid to sportsmen for their services is no surprise. Additionally, the fact that each sportsman generates large revenues through their own merchandising for the club or team makes them an invaluable investment for any organisation.

Furthermore top skills are always in demand, and like anything you have to pay for quality. Although it might seem unjust, the large scale operations of the major sport industry is testament to traditional market economics in our society.