Friday, February 13, 2009

Athlete Salaries

I have always found it perplexing that people attack professional athletes for their salaries, but never attack the owners for the vast sums of money they must accumulate as owners of teams (even if its just through appreciation since teams are now selling for upward of $1.0bn when a decade ago it was closer to $100mm).

But this year should be interesting. Athletes will not lose their jobs because of the economy and they will not suffer lost bonuses or salaries, but tickets to a sporting event, big fingers, peanuts, and cracker jacks are certainly not basic goods. So why are athletes able to prosper in a recession when no one else can.

1) Are the owners bearing all the loss which justifies their tremendous gains? 2) Are sports such a premium good that, like expensive jewelry, the people who purchase tickets are rich enough to not be affected by a recession? 3) Are athletes an example of efficient incentives since they are paid on only what they can control? (Though then it begs the argument why are they not being attacked the same way investment bankers are?)

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