One has to wonder what athletes of generations past must think about the sports marketplace today. Perhaps the most celebrated baseball player of all time, Babe Ruth, played the game for roughly $19,000 a year in 1934. Yes, that would be considerably more in today’s inflation-adjusted dollars, but you get the point. It doesn’t matter the sport, albeit baseball, basketball, football or golf, the money being made by top players today is astronomical. It wasn’t really that long ago when a million dollar salary was unheard of in sports. Nolan Ryan was the first major leaguer to hit that mark signing a four year $4.5 million salary in 1979. Nothing has been the same since.
Let’s take a look first at the ostensibly amateur ranks of collegiate sports. The shell has been peeled back little by little over the last several years. Forget Title IX and women’s sports for the moment, as that has been ruined as well, but is the crux for its own story at another point. And anyone who follows college sports knows that it’s all about, at least monetarily, men’s football and basketball. The other umpteen college sports ride the coattails. At the risk of losing total control of their monopoly, the NCAA has acquiesced, mostly due to losing a landmark U.S. Supreme Court case, which unanimously ruled in favor of college athletes seeking unlimited benefits tied to education in a case that enhances players’ ability to earn compensation while simultaneously diminishing the NCAA’s power.
The first shoe to drop was the NIL (Name, Image, Likeness) rule change. The NIL rule passed in 2021, allowing college athletes to monetize their personal brands through endorsement deals, sponsorships, and other commercial ventures. With this, athletes can now ink deals with companies and brands, wear branded gear during games, and even start their own businesses. Last week, in a move one would have never expected from the NCAA, the organization put forth a groundbreaking proposal that would allow Division I schools to pay athletes for the first time.
So what are we talking about here. Essentially changing the playing field for amateur sports. What has been truly a free ride for the NFL and NBA, utilizing college football and basketball, respectively, for their minor leagues at no cost to them, may come to an end. The NCAA is proposing a tiered structure, with those at the top having to pay at least half of their athletes $30,000 per year. As one might anticipate, this will become a limitless boundary on paying top college kids at the richest programs. Between booster clubs, scholarships, and the like, the segue from bigtime college football and basketball to the pros will be seamless. The rest of the schools will probably proceed as normal, kind of blending into the backdrop of college sports and perhaps even returning to what college sports were supposed to be, extracurricular activities.
In case you haven’t heard, they are paying people upwards of half a billion dollars to hit golf balls these days. When you sit on the world’s largest oil reserves you can pay and play with what is essentially Monopoly money. This week the third ranked golfer in the world, Jon Rahm of Spain, became the talk of the sports world with his joining of the Saudi-backed LIV golf tour, rival of the PGA. Depending upon who you listen to, his take from the Saudi’s is estimated to be somewhere between $300 and $600 million dollars. All from a guy who says he doesn’t play golf for the money. Righteous bucks for a 29 year old. The terms of Rahm’s multi-year contract are among the richest that LIV has offered to date. LIV’s deals for the likes of Phil Mickelson and Dustin Johnson have values that can exceed $100 million. Like the NCAA, the PGA has had a virtual monopoly on golf since its inception. LIV has brought competition to the market place, with a surprising merger proposal on the table between the two. Other than the four major tournaments, golf viewership has dwindled. An aging and ailing Tiger Woods hasn’t helped the cause either.
Okay, so if you can hit a golf ball for half a billion dollars, why not a baseball too. All eyes have been on Japanese sensation Shohei Ohtani of the Los Angeles Angels, who is expected to sign a contract in the range of $500 to $600 million, which would be the largest guarantee in North American sports history. Ohtani is not actually slumming it currently and probably won’t have to drive for DoorDash any time soon, as his current one year contract exceeds $30 million. Ohtani looks primed to shatter fellow teammate Mike Trout’s $426.5 million contract. That just goes to show you that you can’t always buy your way to a championship, as the Angels have yet to be in a post-season game with baseballs two highest paid talents.
The driver in golf is petrodollars, not TV dollars like in college or in pro football or basketball. The Saudi’s money won’t go away, it’s just a matter of how and where they want to spend it. In a record breaking transfer window, Saudi Pro League soccer clubs spent close to $1 billion, acquiring 94 overseas players from Europe’s major leagues, according to Deloitte. Jon Rahm should be glad that he took up golf instead of soccer, as it took almost 50 soccer stars to equate his $500 million or so stipend. Football and basketball on college and professional levels are captives to TV advertising revenue. As long as they produce a good product, they should be okay. Unless, of course, pickle ball somehow finds its feet with TV audiences. I don’t think the NFL or NBA are looking over their shoulders quite yet.
Have we Lost our Collective Minds: Half a Billion to Hit a Ball
