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Professional athletes are known for being paid huge amounts of money for their services. In fact, they are among the highest-paid people in the world, with the lowest-paid male professional basketball player in the United States earning $507,500 in a year. Here are other things you might want to know about athlete compensation.
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1. Athletes don’t necessarily have to play to get paid
Athlete’s salaries are dependent on what is stated on their contract. Unforeseen circumstances, such as injuries or leaving players benched due to coach’s decision don’t actually affect what an athlete receives. Suspensions, on the other hand, are usually seen as a punishment, where suspension extends not just with games, but also with their pay. In some cases, players who no longer are a part of a team can still receive a salary, especially if the benefits of releasing a player or trading them to another team outweigh the financial obligations.
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2. Athlete’s salaries vary year after year
The amount of money a player receives is mostly dependent on the bottom line, performance, tour status, and endorsements. If a player is out extensively due to injuries, this may affect the bottom line, causing a lower salary. In boxing, players are paid per match, and only receives the money after the game is finished.
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3. Players file for bankruptcy after retirement
An estimated one in every six professional football players file for bankruptcy within 12 years from their retirement due to lack of planning, unsustainable lifestyles, and other factors. If players retire from their sport at an early age, there also tends to be more years without earning, prone to years of mortgages and debts. Just because they make a lot of money does not necessarily mean that athletes are protected long-term.
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4. Pay discrepancies between teammates affect performance
Different players within a team are paid different amounts, as some are considered greater assets to the team and are better players compared to the others, and the gap between highest and lowest paid are often very wide. Rookie football players can often earn less than 1% of the salary of the highest earners within the team ($420,000 versus $48 million), and some never even break the 5-digit range.
Pay discrepancies can sometimes affect performance—whether this is good or bad depends on team dynamics. Research shows that athletes value the concept of “fairness” over equality. Basketball teams with salary disparities win more games, while the effect on baseball players is different. Baseball teams with comparable salaries win more games.
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5. Athletes’ salaries increase faster than non-athletes’
Based on research, the average earnings of top 40 athletes in the United States over the past 20 years have increased by 7.1% annually, while the salary of average workers has increased by just 3.7%. The increase is attributed to advertising contracts spurred by a growing fan base; larger stadiums also bring in more viewers, which also contribute to player salaries.
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6. The gender pay gap is most evident in sports
In the list of the 100 highest-paid athletes, the top 39 are all males, and only one or two women actually making the list. In professional basketball, the highest-paid male athlete is paid more than five times higher than the maximum salary of his female counterpart. In tennis, the highest-paid females receive at most one-third of the highest-paid male athlete. In soccer, the highest-paid female earns 132 times less than the highest-paid male. Many argue that this is due to larger audiences, but other factors are also considered.
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7. Some athletes have to keep their day jobs
Not all athletes receive five- or six-figure salaries playing football, baseball, or basketball, thus other sources of income have become a necessity. The average professional lacrosse player earns $10,000 a year and has to resort to day jobs, earning a living as a musician, teacher, pizza delivery driver, or construction worker.