Follow the Money—Sports

Why Guys Are Getting Paid Big

Your Weekly $ Pioneer

 

This guy is straight up getting paid

This guy is straight up getting paid

Since this week has a great NHL feel to it, I decided to stick with an NHL player for the $ Pioneer. Based on my last post, you’d think that there weren’t any guys in the NHL who were getting paid substantially. But don’t worry, I found a guy.

 

Behold, Alexander Ovechkin. He’s a forward for the Washington Capitals, and he’s the highest-paid player in the league right now. His salary is colossal.

Last season, the young goal scoring machine was resigned to the Capitals for 13 years and $124 million, by far the largest contract in the history of the NHL. He’s also the first player in league history to go over $100 million in a contract.

It’s not that he doesn’t deserve a healthy portion of this contract. Here’s a look at his career stats.

No matter the pay, we salute you Alex Ovechkin. You’re this week’s $ Pioneer.

December 9, 2008 Posted by | Weekly $ Pioneers | Leave a comment

Hockey Salaries—High for Hockey, Low for Other Sports

 

These guys technically don't get paid a lot...

These guys technically don't get paid a lot...

Not everybody in America is down with hockey. That’s fine. Nobody’s judging. 

 

The 2000s have been tumultuous for the National Hockey League. In eight years, the sport has seemingly decreased in popularity, endured a lockout that canceled a full season, and then witnessed a rebirth that a lot of people failed to notice.

No matter your theories on whether professional hockey is entertaining or not, there is an odd trend at work in the financial area of NHL life. Compared to other professional sports, the NHL’s current salary cap of $56.7 million is way low. Compared to a lot of other professional athletes, hockey players’ salaries are way low. Yet, it seems that the NHL is overspending again. It’s like some sort of a bizarro world.

$56.7 million is a number that needs to be put into perspective to truly get the idea of how tiny a number it is. Perpetual doormat Major League Baseball teams like the Kansas City Royals have a larger payroll than the biggest players in the NHL do. While Detroit is spending $55 million this year to field the best team in the NHL this season, bottom feeders like the Charlotte Bobcats and the Washington Nationals are spending near or over that amount to be two of the worst teams in their respective sports. It’s an incredible trend.

Here’s a link to another blog that does a great job of giving insight into how NHL salary caps and payrolls have changed over the years. Notice that the author thinks NHL player salaries are skyrocketing. I can’t say I agree with this logic, seeing as how the current “skyrocketing” salary cap isn’t even close to what a lot of teams pay for a worse record.

For comparison’s sake, I have to include some other money guidelines in the other major sports.

NBA—The highest a team’s salary could go under the 2008-09 cap is $71.150 million. that is nearly $20 million more than the NHL. Put it into the perspective of full contracts, and LeBron James will make more over the duration of his current contract than some entire NHL teams.

NFL—The 2008 salary cap for teams is a staggering $116 million. That is by far the highest of the professional sports (that have salary caps).

MLB—Baseball doesn’t have a cap, which is why only a handful of teams are in the running for the top free agents every winter. Bottom line, the top pro baseball players are dwarfing NHL team salaries. Just compare Alex Rodriguez’ current deal to that of the top NHL team.

In conclusion,  while it may seem like NHL salaries are getting out of control, the reality is that they’re still, by leaps and bounds, the lowest of the four major professional sports.

December 9, 2008 Posted by | Uncategorized | | Leave a comment

How the Other Half Lives

I’ve been focusing 99 percent of my energy on how prices have gone up for free agents and rookies alike, but what about the other guys?

You know who I’m talking about: the guys who aren’t fortunate enough to have the pay checks, talent or maybe even the agents to pull off some of the largest, most incredible contracts in sports.

Today, I’m celebrating the guys making the league minimum, or close to it. You may find some names you recognize.

Exhibit A–Chris Douglas-Roberts–New Jersey Nets. He’s only a rookie this year, so his contract wasn’t going to huge anyway, per NBA rules. But still, he’s a fairly prominent name in the world of basketball over the last year because of his stellar work at Memphis. This season, the swingman is making $442,114. We salute you, Chris.

wizards3_resizeExhibit B–Juan Dixon–Washington Wizards. I love to talk about journeyman players. My buddies and I like to drop the names of players who haven’t made a big impact on the sport and joke about them. While I greatly respect Juan Dixon for his work at Maryland in college, he’s amounted to being a true journeyman in the NBA. Appropriately, he’s making $998,398 this season.

ExhibCardinals Rockies Baseballit C–Ryan Ludwick–St. Louis Cardinals. This guy had a productive season last year, making the NL All-Star team. But here’s the deal: Ludwick has bounced around in his career, and had the best season of his life at age 30. He hasn’t just bounced around MLB teams either. He’s been in and out of the minor leagues for most of his career. Last season, he made $411,000.

Exhibit D–Josh Hamilton–Texas Rangers. I saw this guy’s name next to his salary and did an instant double-take. Hamilton was the feel-good story of the year in baseball, and put up numbers that could very well earn him AL MVP this week. Really, he’s been very productive his last two seasons. In 2008, he’s making a grand total of $396,830. Wow.

ruudhandsmallapsmallExhibit E–Barrett Ruud–Tampa Bay Buccaneers. Ruud wasn’t much of a household name until the current season, where he’s put together a heck of a year, anchoring one of the NFL’s best defenses from the linebacker position. This season, Ruud’s making a miniscule (by pro sports standards) $523,840. Compare that to a player such as recently-benched Cleveland Browns quarterback Derek Anderson, who recently got a $7 million signing bonus in the offseason. That’s a signing bonus, not based on any 2008 games. People who aren’t even playing are making more money up front than Ruud will make for an entire 2008 season of toil.

Oy, how the other half lives.

November 18, 2008 Posted by | League Minimum Guys | Leave a comment

Your Weekly $ Pioneer

a-rod-announcement-new-york-yankees-star-alex-rodriguez-ends-his-contractIt was only a matter of time before this guy slugged his way into this category.

Even though he’s only 31 and still at the top of his game, Yankees third baseman Alex “A-Rod” Rodriguez is a sports money pioneer. The reason? His 2001 free agent contract with the Texas Rangers that paid him $252 million. A quarter of a million dollars for an (at the time) shortstop with a sweet swing. It doesn’t sound so bad in today’s sports contract climate, except for a few reasons.

1.) It was the Texas freakin’ Rangers. This was a team who, at the time, had zero pitching, zero pieces to put around Rodriguez in the everyday lineup, and some pretty poor structure at the top. Basically, this insane contract was offered to appease the fans who had to be growing tired of watching their team lose for years.

2.) A-Rod only stayed for a few seasons. Sure, he won a couple AL MVP awards, but the Rangers lost a ton of games and committed themselves to paying one player more than most entire rosters. Oh, the things the Florida Marlins could do with a $252 million payroll.

3.) The contract set a dangerous precedent for position players seeking new deals after 2001. $252 million was a big reach for any player at the time, but look how high MLB contracts have risen since that offseason. Now, you have starting pitchers who only play one day a week making $137 million. You’ve got centerfielders (Carlos Beltran) pulling in over $100 million based off of one great season. Detroit Tigers third baseman Miguel Cabrera cashed in just before the start of this past season for $150 million, and he hadn’t played a single regular season game yet. Basically, the A-Rod contract in 2001 changed the landscape of what players could realistically ask for, or at least sped up the trend.

That’s why Alex Rodriguez is this week’s $ Pioneer.

November 18, 2008 Posted by | Weekly $ Pioneers | Leave a comment

Throwback Week at Follow the Money

Every sport has a throwback night…or several…

You know how it works. Teams wear old uniforms, use old logos. It’s a great money-making scheme for the major professional sports leagues. It’s a chance for fans of all ages to take in the history of their favorite teams and bask in some of the ugliest color and logo combinations ever devised.

This week, I’m having a throwback on this blog. I’ve always heard the stories from my dad and older generations about how much pro athletes got paid before free agency, before sports became media driven, before agents and signing bonuses. When my dad was growing up, he lived across the street from Cleveland Browns linebacker Jim Houston, who I believe is now in the Hall-of-Fame. Houston was one of the best players on the Browns team, yet lived in a ranch-style house in Middleburg Heights, Ohio, surrounded by the middle-class citizens. That is a stark contrast to today’s star athletes, who own houses on celebrity islands on the coast of Florida.

Basically, I wanted to display for you just how much different player salaries were in decades past than they are now. Here’s a list of some star players who made next to nothing by today’s standards, as well as some general numbers for you to chew on.

1.) Nolan Ryan, Hall-of-Fame pitcher who tossed seven no-hitters in his career. He signed a contract in 1979 that made him baseball’s first million dollar player. That’s right, Nolan Ryan was the first pro baseball player to make a million. In 1979, that was considered a gigantic contract. What would a guy like Ryan be worth now? My guess: $150 million.

2.) Rickey Henderson, Hall-of-Fame center fielder and the greatest base stealer of all time. In 1990, Henderson became the highest paid player in baseball, making $3 million. Today, a guy who produces like Henderson did in his prime gets a minimum of $100 mil.

3.) The average MLB player in 1970 earned about $30,000. That’s not a typo.

4.) In 1985, the average NBA player salary was $330,000.

5.) In 1972, Wilt Chamberlain, considered one of the best basketball players ever, made $200,000. In today’s NBA, there are third string point guards buried at the end of the bench who are making at least $100,000.

6.) Walter Payton, considered by many to be the greatest running back to ever play (Next to Jim Brown, of course), was the NFL’s highest-paid player in 1980, working for a $500,000 contract. That number is the total, not pay for just one season. In 2008, Payton would be on a $70 million contract with a signing bonus of close to $30 million.

7.) Here’s a more recent one for you. In the mid to late 1990s, at the height of his game, Michael Jordan played with a contract that was just a shade over $33 million. Jordan is widely considered the best basketball player to ever play, hands down. Just to illustrate for you how much salaries have grown in the past 10 years, point guard Stephon Marbury, a lockerroom cancer, ball-hog and generally weird guy who’s currently sitting the bench waiting for a trade, will make $21 million…THIS SEASON…Jordan has six NBA titles, five MVP awards, won the scoring title more times than can be counted, won two gold medals and became the most profitable marketing machine in the history of pro sports. Marbury will best be known for throwing his name on $8 shoes at Steve and Barry’s. That is case and point of how much player salaries have increased over the years. There are some scary numbers out there.

That about wraps it up for “Throwback Week” at the blog. Hopefully Wilt Chamberlain isn’t rolling over in his grave as I type this.

November 3, 2008 Posted by | Throwback Week | 1 Comment