The spate of signings connected to the recent opening of the National Basketball Association’s season for free agency had many people I know blinking in disbelief. Not only has the going rate for a top-level NBA star zoomed to about $30 million a year but the pay for journeymen players has soared apace. Hoopsters we’ve scarcely heard of were pulling down eight-figure annual deals! What’s the world coming to?
Truth is, of course, we’ve been shaking our heads over jock riches for years, and probably always will. Ever since big-league baseball players in 1975 broke free of their sport’s “reserve clause,” which bound players to their teams until the teams chose to release or trade them, the lines on all athletes’ pay charts have been up, pretty much in a straight line. So, too, has public bewilderment with same, even among people who otherwise champion free-market economics.
A little math suffices to illustrate the inequities that throwing riches at jocks involves. If the average public-school teacher earns, say, $50,000 a year, the $30 million-a-year the likes of Kyrie Irving or Bryce Harper are getting would cover the entire annual payroll of the 600-teacher public-school system of New Haven, Connecticut. If that isn’t enough to piss someone off, nothing is.
But it’s equally true that such complaints really aren’t wholly justified. Sports exist in a marketplace peopled solely by volunteers, which is to say that teams and athletes get your money only if you choose to give it to them. (The exception is the use of tax dollars to build sports facilities.) If you don’t like the games’ economic structures, don’t buy tickets or otherwise support them. It’s as simple as that.
And fans and nonfans alike can take perverse satisfaction from the knowledge that athletes are notoriously poor handlers of money, people who will revert to economic norms or worse no matter how much they pull down during their salad days. In the maxim “a fool and his money are soon parted,” the word “jock” can be substituted for “fool” with no loss of meaning.
Evidence to support that premise is easy to come by; a few years ago Sports Illustrated magazine reported a study showing that 78% of NBAers and 60% of National Football League players were either bankrupt or experiencing “financial stress” within five years of retiring. Those numbers are large enough to raise questions, but even half the reported rates would be shocking.
In assessing jockonomics, a couple things should be kept in mind. The first is that nobody who works for somebody else is overpaid. Babe Ruth has been credited with saying that to justify his $80,000 salary in 1927, but its truth is self-evident whether he really said it or not.
The second is that published pay figures are grosses, not nets, and thus are misleading. From annual salaries in the seven-figures-and-up range one can immediately deduct about 35% for federal taxes, another 5% to 10% for state and local taxes and still another 10% for agency or legal fees. The state bite can be larger than normal because of the so-called “jock tax” which, pioneered in California, requires that athletes be taxed in just about every state in which they perform and at the rate of that state rather than the one they call home. If nothing else this often requires them to file a dozen or more state forms at tax time.
Individual-sport athletes such as boxers and tennis players also typically must maintain, at their own expense, coaches, trainers and others that help them in their trades. For boxers training for a big fight this contingent can number in the dozens.
But even so what’s left can be considerable, and it should be noted that young athletes (almost all are huge earners for their age) often come from backgrounds that don’t prepare them to handle sudden wealth. The youngster coming into his first big pro contract typically finds himself surrounded by friends and relatives wishing to share in his good fortune, some with good cases for doing so. With little or no schooling in investment matters he is easy prey for fast-talking operators who tell him that ordinary annual returns of 5% or thereabouts amount to “chump change” and, thus, are beneath his exalted status. Having grown up with the privilege that extraordinary athletic ability brings in this land, this argument becomes easy to swallow.
And having gone from next to nothing to quite a bit in, like, 60 seconds, the newly rich jock easily falls into spending habits that can be sustained only as long as his income stays very high. Shaquille O’Neal, the former basketball player, seems to have emerged from hoops stardom in good financial shape, which is good because an article on his playing-days lifestyle had it that he was spending $l,620 a month for “music and magazines”, $2,305 a for pet care, $6,730 for laundry and cleaning, $24,300 for gasoline and $114,946 for “miscellaneous personal” reasons. And that’s before his mortgage(s) and food kicked in.
Automobiles are a big source of jock extravagance; one piece I saw online had it that Mike Tyson, the boxer, has owned a total of 111 such vehicles during his lifetime. Some he drove himself, others he gave to friends. More than once he abandoned cars after he couldn’t remember where he parked them, according to the article.
Because they deal with the public individually and directly, boxers top most lists of richest jocks. They also are among the poster boys for financial disaster. Muhammad Ali earned a reported $50 million during his career but late in life lived off appearance fees. Tyson, coming along after the take for big fights had mushroomed because of pay-TV, grossed a reported $700 million. He declared bankruptcy in 2007. Now age 53, he lives off occasional acting gigs and lectures, one of the latter concerning how he blew his money.
Athletes’ typical need for quick gratification can subvert even well-meant financial plans. Businessman Bill Cayton, Tyson’s manager before being elbowed aside by the unscrupulous Don King, told me about setting up a trust fund for one of his earlier fighters, Wilfredo Benitez, that ensured Benitez a good income on retirement. “We made Wilfredo and his relatives sign promises never to invade the principal, but three weeks after the thing was set up he showed up at the bank asking to do just that,” Cayton said. “We told the banker not to let him but the next day he phoned again to say that Wilfredo, his father and a brunch of friends were in his office threatening to riot if they couldn’t get some money. We told the fellow to do what he had to, and inside of six months the whole sum was gone. Sad, but true.”