Follow @profsportsmoney

Sunday, November 15, 2015

Highest Paid Athletes Per Quinquennial

What the heck is a quinquennial eh? Well, it's every 5 years, so were going to go back to 1990 and take a look at the highest paid players every 5 years and see how much it's changed. All the total earnings numbers come from Forbes.

1990
1990 was 25 years ago, 3 years older than myself. The highest paid athlete that year? Mike Tyson. He earned $28.6 million that year. Tyson was a 5 foot 10 inch heavyweight boxer. Mike was 18 years old when he made his debut as a professional boxer in 1985. The match was over quickly as he knocked out Hector Mercedes in the first round. Throughout his career he had 58 total fights and won 50 of those. Of his 50 wins, 44 of them were by knockout. Many know Mike Tyson from biting Evander Holyfield's ear off in 1997.

1995
Michael Jordan, the Chicago Bulls guard that is considered by many as the greatest player of all time as you may know, earned the most money out of any athlete in 1995. His total earnings were put at $43.9 million. By 1995 Michael Jordan had 10 NBA seasons under his belt, and this was also the 4th year in a row in which he was considered the highest paid athlete (1992-1995). He took a year off in 1996, in which Mike Tyson was again the highest paid athlete, and then came back on top for the next two years in 1997 and 1998.

2000
Michael Schumacher was the highest paid athlete in 2000 with total earnings of $59 million. This was his second year in a row as the highest paid athlete as he made $49 million in 1999. Schumacher was an auto racer who 7 Formula One World Championships. He holds a handful of records for Formula One, including fastest laps, most races won in a single season, race victories, and most championships. Many believe that he is the best Formula One racer of all time.

2005 & 2010
Tiger Woods, everyone. Woods has dominated the highest paid athlete list in the past 14 years, as he has been the top dog 11 of those years, including both 2005 and 2010. He was the highest paid athlete from 2002-2011, and then returned again at the top in 2013. During those 11 years he combined for total earnings of $987.4 million. His highest total earning in one year was 2008, in which he earned $115 million. Woods was a dominant force on the golf course, but he also brought in a lot from endorsement deals.

2015
Wanna talk about a lot of money folks? Then let's talk Floyd Mayweather, who has total earnings of $300 million in 2015. Most of those earning came from his fight against Manny Pacquiao earlier this year, who happens to be the second highest paid athlete this year. $15 million has come from endorsement deals. Compared to 1990, Floyd is making a whopping 1048.95% times more than what Mike Tyson did, Talk about a huge difference in money!

Thursday, November 12, 2015

Great Free Agent Signings

Free agency is a key period for many sports teams. It's their chance to get the interest of some of the best available players and bring them to their team. Some turn out to be busts, some turn out to be hidden gems, and some pan out to be just what they thought they would be. Here's a look at some great free agent signings by teams in sports history.

Drew Brees

In 2006 Drew Brees signed a six year, $60 million contract with the New Orleans Saints. His former team was the San Diego Chargers. Since his arrival to New Orleans he has been 87-56 as a starter. He led the team to a Super Bowl victory in 2009, their only Super Bowl in the team's history. During his tenure as a Saint he has also broke a few NFL records. Just recently he tied the record with most passing touchdowns in one single game (7). He has to most consecutive games while throwing at least one touchdown pass, which is 54 games. 2011 may have been his best season as a Saint so far.  During that year he broke the record for the highest completion percentage as a quarterback in one season at 71.2%. He also threw for 5,476 passing yards that year, which at the time broke the record for most passing yards in a season. Peyton Manning broke that record in 2013 by throwing just one more yard than Brees had. Drew Brees is currently 4th on the all time list for passing yards in a career as well.


In 2014 Cleveland got back their superstar athlete Lebron James back that they lost in 2010 to the Miami Heat in free agency. He signed a two-year, $42 million deal. Many believe that once Lebron retires, he will be the greatest basketball player to ever live. It was huge for Cleveland to get back Lebron, as they went 33-49 in the 2013-2014 season. Last year, Lebron's first year back, Cleveland went 53-29 and went on to play the Golden State Warriors in the NBA finals, but lost. He has put any team he has been on in contention for an NBA championship. He has won 4 Most Valuable Player awards since being in the league. He is an 11-time NBA all-star and a 9-time ALL-NBA First Team. His list of awards goes on and on and very few players compare to what he means to his team on any given night. Coming back to Cleveland meant a whole lot to both the city and himself.


Randy Johnson signed a 4-year, $53 million contract in 1998 at the age of 34 years old. A lot of people thought that was a lot of money at the time for a pitcher that age, but Randy delivered. In the 4 years of his contract he won 4 Cy Young awards. In the 2001 World Weries he won 3 games for the Diamonbacks, which happens to be the only World Series for Arizona. He also pitched 1 1/3 innings on relief during that World Series, which happened to be on zero days of rest, which makes it even more impressive. During that 2001 season he went 21-6 with a 2.49 ERA (Earned Run Average). He also struck out an outstanding 372 batter during the season as well.

Wednesday, November 11, 2015

Real Madrid: The Most Valuable Sports Team of 2015

Real Madrid, a soccer team from Spain worth $3.26 billion has been listed as the world's most valuable sports team for the third year in a row. The president of the club is Florentino Perez and the coach is Rafael Benitez. The arena, Santiago Bernabeu Stadium, is named after one of the greatest Real Madrid players of all time, Santiago Bernabeu, and holds 85,044 people. The club began in 1897 under the name Football Club Sky and was eventually split into two teams in 1900. These two clubs were named New Foot-Ball de Madrid and Madrid Football Club. In 1905 Madrid Football Club defeated Athletic Bilbao in the Spanish Cup final to win its first ever title. The team changed its name to Real Madrid in 1920 and it has been that ever since. Other great players to wear the Real Madrid uniform are Raul Gonzalez, Alfredo Di Stefano, Manuel Sanchis, Iker Casillas, and many more.

Above is the current roster for Real Madrid

To the left is the current roster for Real Madrid. They are led by superstar Christiano Ronaldo, who leads the team in goals with 14 in all leagues and 8 in the Spanish Primera Division. Karim Benzema is second on the team in goals with 8 in all leagues, while James Rodriguez currently has 5.  The assist leaders are Isco with 6, Gareth Bale with 5, and Lucas with 5 as well. Their current team record in the Liga BBVA is 7-3-1 (7 wins, 3 draws, and 1 loss). They are in second place in the league with 24 points, 3 behind the leader Barcelona with 27.

To the right is a list of ten teams who are worth the most in 2015.  It's not surprising to see teams like the Dallas Cowboys and New York Yankees in the top ten. The Lakers made a pretty big jump from 2014, moving from number 15 to number 6 on this year's list. The New York Knicks are also on this list. Them and the Lakers had a combined record of 74-100, and both missed the playoffs. So having a team worth a lot of money doesn't always mean success will come with it. The Lakers have had a very strong history full of championships and great players. It's also worth noting that 3 of the top 5 teams are soccer clubs.

Wednesday, November 4, 2015

Floyd "Money" Mayweather

Wanna know the richest athlete in the world today? He's a boxer and his name is Floyd "Money" Mayweather, and the money nickname is there for a reason. His total winnings from boxing this year were a whopping $285 million, almost twice as much as the next athlete on the list, Manny Pacquiao, who is also a boxer. He also earned a total of $15 million from endorsements. He took in at least $220 million just from his fight against Pacquiao this year. You could say that Floyd enjoys spending his money just about as much as he does making it. He has his share of luxury cars and even once had around $7 million in jewelry alone stolen from his house.

His 20,000+ square feet home, or should I say mansion, in Las Vegas is incredible. The picture to the left is just a glimpse of the house, which is valued at about $9 million. This home includes a pool and a hot tub. Not only does it also have 5 bedrooms and 7 bathrooms, it also has a gated golf course with it as well. Floyd's closet may be twice the size of most people's master bedrooms. If you'd like to get a short inside look of the home, check out this video here. In the video he's wearing a $100,000 watch and shows off more than $15 million in cars as well. Or you can check out his Instagram account for this mansion at @bigboymansion


The guy practically sleeps in his money.  There have been some ridiculous ways that he has decided to spend his money throughout his career.  He's bet $1 million on the Patriots before, but that's nothing compared to the $5.9 million he put down on the Miami Heat in 2013. He uses a Cadillac golf cart that is estimated at around $20,000. Jackie Starr, his full time barber, has a salary of over six figures. I repeat, she gets paid six figures just to cut his hair alone. There's countless other ways that Floyd has spent his money in ridiculous ways as well.

Wanna make some serious cash? Learn how to box, and learn how to be good at is, as the top two highest paid athletes are boxers.

Thursday, October 22, 2015

College Athletes: Should They be Paid?

We'll move away from the professional players in this post and talk a little bit about collegiate players. It's been long debated whether or not they should get paid, but the topic has been quite a bit more popular than usual the past few years. NCAA athletes currently aren't even allowed to sign items for money or sell their NCAA for money either.  Many of these athletes do get free college tuition though, which is a huge benefit.

Some studies have shown that athletes put in around 40 hours a week on their sport.  That includes games, practices, training, watching film and more.  For football it is estimated that some athletes spend just under 45 hours a week whereas basketball and other sports are a little bit under 40. If they used those hours to work they'd make just under $300 in a week with Iowa's minimum wage. These athletes are probably taking 12-15 credit hours as well, which equals out to be around 55 hours a week including both sports and school. These athletes aren't getting much time to study during the week, let alone just relax after their tough practices.  

Johnny Manziel is a big reason this topic has been on the rise in the past few years.  He generated a huge amount of revenue for Texas A&M, or at least it is believed that he is the main reason why the school made so much money that year. Let's see why.  Manziel won the Heisman Trophy in 2012.  From September 1, 2012 to August 31, 2013 the school made a whopping $740 million in donations. That is a record for Texas A&M. In fact, the school hadn't ever come within even $300 million of that amount ever. The school even auctioned off a dinner with Johnny for $20,000.  Someone literally paid $20,000 just to have dinner with him. The year he was quarterback, the bookstore had sold out all 2,500 replica #2 jerseys they had in stock. A typical jersey goes for at least $60, so let's just do the math. 2,500 jerseys at $60 is $150,000. That's not counting jerseys that aren't sold in bookstores, like online fan shops. Manziel saw literally none of that money. Is that fair? I don't think so, but the NCAA thinks otherwise.

Players aren't allowed to sell NCAA merchandise or items signed by them either.  If they sign one of their jerseys and sell it to someone, it is considered illegal by the NCAA and usually ends in suspension or some type of punishment.  In 2010 another great player, Terrelle Pryor and a few of his teammates were suspended because they sold jerseys, champions rings, and other items. They also got tattoo discount of some sort that had a part in the suspension as well. That, in my opinion is wrong, but selling items that belong to you? If it's mine I should be able to do what I want with it. The fact that players can't use their popularity to make money, like signatures for example, is just something I don't seem to understand.  

Sunday, October 18, 2015

Salary Caps

Salary caps are limits put in place that allows teams to spend only a certain amount on player salaries per year. They help keep teams within the league more even. For example, if the league's salary cap is $100,000, they can't sign a bunch of really good guys to big contracts unless they want to basically spend little to none on all their other players. Not being able to sign multiple great players allows the spread of sports stars in the league to different teams. It also helps keep costs down as players will want to sign a contract worth as much money as they can. Players will understand that signing a big contract might keep the team from signing other players that will help the team. Some leagues do not have salary caps, like the MLB. Teams that go over this limit have to pay a penalty to the league. Let's take a look at salary caps throughout professional sports.

NBA
The 2015-2016 salary cap will be set at $70 million.  Last years salary cap limit was $63.1 million dollars, so the increase is a whopping 11% from last year.  The highest team payroll is the Cleveland Cavaliers, who have player salaries that equal out to a total of just under $95 million. The lowest team payroll is the Portland Trail Blazers, which is $41,410,000. This is almost a $54 million difference between them and the Cleveland Cavaliers. They can use the extra money that they can spend in free agency sometime or trade for a player with a high salary.  An NBA team is allowed to have 15 players on their rosters. If players were all payed equally, they'd all have salaries of $4.7 million.

MLB
Major League Baseball is one of the sports that does not have a salary cap. This allows teams to spend as much as they want on players without having to pay penalties. Teams who make a lot of money or who are in bigger markets like New York City or Los Angeles tend to have enough money to spend lots on player salaries. The Los Angeles Dodgers have a team payroll of$272,789,040, which is the highest in the league. The Miami Marlins team payroll is $68,479,000, the lowest in the league. This is a difference of more than $200 million! A higher team payroll doesn't always mean better success as the Houston Astros' team payroll was the second lowest in the MLB, but yet the team made the playoffs. The Boston Red Sox had the third highest team payroll but failed to make the playoffs.

NFL
The NFL salary cap for the 2015 season is set at $143.28 million. The New York Jets have a team payroll of $152.36 million while the lowest is the Tennessee Titans, which is set at $128.23 million. The NFL has a smaller gap between the highest and lowest team payrolls, as it is only about $ 25 million.  Each NFL team is allowed to have 53 men on their roster, so if every player was played equally, they'd make $2.7 million. Keep in mind that the NFL makes the most money out of any professional sport, yet it seems that the bigger stars in the NFL don't make near as much as the bigger stars in the NBA or other sports with salary caps.

Monday, October 5, 2015

Revenue from Concession Stands

Ever wondered how much teams make from concession stands during their home games?  There are certain factors that contribute to these numbers, obviously, such as the number of fans attending the game and differing prices between stadiums. To give you an idea of how much they make, all MLB ballparks combined bring in more than $500 million in one year. That's about $17 million a year per team if each team equally made the same. Let's take a look at how these teams make these huge revenues.


Hot dogs are huge money makers for MLB teams.  In 2013, there was projected to be over 20 million hot dogs sold at stadiums throughout the season. At $4.50 per hot dog (which some teams charge more) that's over $90 million in sales! It is also estimated that each vendor sells around 150 hot dogs per game. Each vendor who has to walk throughout the stadium has carries a bin full of hot dogs that weighs about 40 pounds full. Most vendors walk around 4 to 5 milers per game on average, too! Concessions profit more than 60% from each hot dog sold during a ballgame as well. Next time you're at a Major League baseball game look around and see how many fans have hot dogs. Also, take a look at the price of them, as some stadiums charge up to $6.50 per dog. 


Who doesn't love to get a little buzz while watching their favorite team play? Beer is another way teams make money from concessions. Drinks at professional sporting events usually have a profit margin of at least 90%.  This includes soft drinks as well, but beer should be close to that once we see how much it costs to buy a beer at a game. Let's take a look here at the average cost of beer by certain professional sports. 

                      NBA: $7.41           NHL: $7.34
                      NFL: $7.05           MLB: $6.09 

Over $7 for a beer? Crazy to think that it costs that much, but still over 60,000 beers are sold on average during NFL games. I'd suggest throwing a few back before the game starts to save a few bucks while inside the stadium. Three beers at a professional game would cost you about the same as it would to buy a full case of beer in most places.  

To find out more about concession stand information, visit The Economy of Food at Sporting Events.


Monday, September 28, 2015

Endorsement Deals

Making millions from sports isn't the only way athletes can make big money. Big companies love signing star athletes to help them with sales and marketing. When audiences see their favorite athletes on advertisements it makes them want to buy the company's product that the athlete is wearing or using. As a kid I always wanted a new pair of Michael Jordan sneakers. Even today I browse through Jordan shoes when I need a new pair. Athletes can make huge amounts of money from endorsements depending on the company and how popular the athlete is.

Michael Jordan, who many believe to be the greatest basketball player of all time has made a name for himself in the shoe industry. He signed a $2.5 million deal over 5 years in 1984 with Nike. This was right after winning a national championship at North Carolina and being taken 3rd overall in the NBA draft. This deal was huge for both Nike and Jordan, as the shoes are still very popular today. Jordan's clothing line is very popular as well, selling shirts, shorts, socks, hats, etc. It is estimated that Michael Jordan makes around $100
million a year from Nike. To put this in perspective, Jordan made a total of $90.2 million dollars throughout his whole NBA career. Every other basketball shoe that was bought last year was a Jordan shoe. You cannot walk into a shoe store like Foot Locker or Finish Line without seeing the new pair of Jordan shoes on display. Michael Jordan's success playing basketball helped create the most popular basketball shoes of all time.


Jordan Spieth, a 22 year old who is taking the golf world by storm lately, is endorsed by Under Armour. He just broke the record for the most prize money earned in one golf season, but also sees a nice paycheck outside of golf from Under Armour. He is currently the number one golfer in the world and he is getting a lot of interest from golf fans. When young golfers see him wearing Under Armour, they become interested in the brand and want to get a shirt or hat of their own. He also has endorsement deals with Rolex, NetJets, BioSteel Sports Supplements and Perfect Sense Digital. Forbes has him making $11 million dollars in endorsement deals per year. If he keeps it up, he could see the same amount of money that Tiger Woods was bringing in from endorsement deals during his time as the best golfer in the world.

Endorsement deals, as we can see, are huge for both the company and the athlete. Almost any young child who plays a sport looks up to a certain athlete and wants to be just like them. In order to be like them they think they need to wear the same gear that certain athlete does.  Without Jordan, Nike may not be near where they are today, as you can imagine how much more money that have made per year after signing the star athlete.

Endorsement Deals... Because making millions from playing the game just isn't quite enough. 

Thursday, September 17, 2015

Are Long-Term Deals Worth It?

Your favorite professional sports team just signed the biggest name in free agency to a 7 year deal worth big time money.  You love it, but will it be worth it?  It depends.  Many long-term contracts these days end up not working out so well for the team.  A lot of these contracts are signed halfway through the player's career, leaving the player with only a few quality seasons left in many cases. These contracts usually contain quite a bit of guaranteed money for the player as well.  Let's take a look at some long-term deals that haven't worked out quite as hoped.



Vernon Wells, Toronto Blue Jays - 7 Years / $126 Million

Wells signed his contract with the Blue Jays after the 2006 season.  For the next three seasons he struggled with injuries and didn't have a season worth noting until 2010 where he batted .273 with 31 home runs.  The next season he was traded to the Los Angeles Angels, and he never returned to form from there on out.  He had his worst season ever with his first year on the Angels, batting .218 with 86 strikeouts.  He was eventually traded to the Yankees in 2013 and had his final season as a player there while batting .233.  Vernon never found his groove once signing this big contract and cost all the teams involved some big money for poor player performance. 



JaMarcus Russell, Oakland Raiders - 6 Years / $68 Million

JaMarcus Russell hadn't play a single snap in the NFL when the Raiders took this big gamble on him in 2007. He had his first career start on the last game of the regular season, where he threw two interceptions and lost a fumble.  He finished that season with only 373 yards passing.  Russell's 2008 and 2009 season were so lousy the Raiders decided to release JaMarcus in May of 2010.  Russell only saw $39 million of the contract, but also only played 3 season, averaging that out to be $13 million a year for a player who struggled continuously throughout his short career.


Not all long-term contracts turn out to be as poor as the ones above, but it is very difficult for a team to find a player who will play well throughout a whole long-term contract worth big money.  Teams have to evaluate the age of players and decide whether or not they will be worth the investment for years to come.  Sometimes taking the next best guy for a shorter and cheaper contract is the way to go. 





About Me

My name is Austin Eller and I am a senior at the University of Northern Iowa majoring in both Finance and Management Information Systems.  I have always been a huge sports fan and have played sports for the majority of my life.  As of late I have been interested in professional teams and players and how they control their finances.  Many know that professional athletes make huge amounts of money, but there's a lot more to it when it comes to teams and where they get all their money from. There are so many different ways that a team or player can make money.  This blog will cover many different financial areas of sports.

Check out my Twitter page https://twitter.com/profsportsmoney