This article might be a bit stretched for economics, but it deals with money at the very least. Last week, Baltimore Ravens QB Joe Flacco signed a deal which made him the NFL's all-time highest-paid player. The new contract--worth $120.6 million with $52 million guaranteed--is the largest in NFL history.
With the deal, Flacco will earn more than the likes of Lionel Messi and LeBron James; only Alex Rodriguez of the New York Yankees will make more money. When asked about the contract, Flacco said, “It was never about earning the money and all that. It was about earning the respect."
Sports are an interesting industry because they are, in essence, funded by fans. Really, its the several-thousand fans who fill up Baltimore's stadium each Sunday who are footing the bill for Flacco. So I wonder: while playing in Baltimore, a city loved by Flacco, where he is respected, is it really not about the money?
http://www.washingtonpost.com/blogs/early-lead/wp/2013/03/04/joe-flacco-says-new-contract-was-about-respect-not-money/
As a dedicated sports fan, this article caught my eye. It is very hard to believe that Flacco signed this contract for any main reason other than the significant amount of money and part of history. As a fan, I respect the athletes for their accomplishments on the field, not for the check in their pocket. It is also eye opening and mind blowing to realize how we as fans are in essence paying the player's salary. The sports industry is growing everyday, yet those benefitting don't seem to give back to the community.
ReplyDeleteWell, if you think about it, all industries are funded at least in part by the customers. WalMart workers have salaries funded by the revenue that the firm generates. Newspapers draw most of their money from advertisers, but subscribers contribute to the journalists' salaries. So sports really aren't that much different in that regard.
ReplyDeleteTo Flacco specifically, the Ravens got a terrible deal in this. Flacco may have had a spectacular playoff run, but he was generally regarded as an average player with little marketability before the Ravens won the Super Bowl. He's the kind of player that benefits from his supporting cast immensely (think Trent Dilfer, or more recently Matt Schaub). This is clearly a situation where a little luck made Flacco significantly more valuable in the eyes of fans than he probably is. I'd be very surprised if the Ravens continue to have championship success while buried under this gargantuan contract assigned to someone who doesn't merit it. Should be interesting to see how this turns out for the franchise.
I completely agree with Brian. Flacco was in luck with everything that went on, and I think it also had a lot to due with Ray Lewis. The fact that one of the star players was retiring after the season, it brought so many people to become fans based on that alone. In turn, this supported Flacco and his success and now paycheck.
ReplyDeleteAnd to the fan base paying for the salary is the basic supply and demand curve, more people buying, more expensive. For example, the average player in the WNBA makes a fraction of what a player in the NBA makes, and it's mostly based on there isn't a huge following for the WNBA which in turn, does not allow those players to make as much as NBA players.