Recently Business of Soccer delved into a question that many soccer fans ponder over: ”how much more do professional footballers make than me”? While we could not answer that question for every single person who has asked it, we looked at historical census data to get to an average U.S. worker base salary in order to compare it to MLS salary data from the MLS Players Union.
In a follow up to the first analysis, which compared MLS and the Premier League to their respective country’s average worker salaries over time, we will provide a look into how MLS compares to the other major sports leagues in the U.S.
Thanks to an article from Business Insider we can compare the average salaries across the major sports leagues in the U.S. versus the ‘Average Joe’. It may surprise some sports fans that the NBA brings in the highest average salary to its players, though when you consider the average roster of a basketball team to football, soccer, hockey, and baseball and the math involved with getting to an average and it make more sense.
According to the latest U.S. Census data the average U.S. worker salary is $45,706, which is more than 100 times less than what the average NBA player makes at $5.15 million. In fact, the average NBA player makes more than 1.5 times what the next highest league’s (MLB) average player makes, and more than 30 times what the average MLS player makes. This throws into perspective not only how the leagues compare against each other and the ‘Average Joe’, but also may level set some people’s thinking relative to wage distribution across the various athletes in each league. The public sees the big time salaries mentioned for players in the NFL and MLB for athletes like quarterbacks Joe Flacco and Drew Brees or pitcher Johan Santana and would think that they would be higher than the NBA on the above chart. However, like mentioned before, with bigger rosters comes more opportunity for variation with the distribution of wages amongst the athletes, thus impacting the league average.
Another metric that is good to consider with regard to player earnings is the wage:revenue ratio. Below is a depiction of how each of the major sports leagues in the U.S. compares on this point:
Though the time ranges for when this data reflects is not necessarily consistent across all of the leagues, it does provide a directional view at what the relationship is across the sports landscape in the U.S. There are several key points to take away from this information and comparison. The first is how high the wage to revenue ratio is for the NHL at almost 71%, which is indicative of a relatively unhealthy profit scenario for the league. If wages account for more than 2/3 of your revenue, that does not leave much left over once all of the other expenses are taken into account for much of a profit.
Second is that MLB moves down a spot in the wage to revenue chart vs the average wage chart above. This is significant because the league has the second highest average annual salary but the third best wage to revenue ratio, indicating a healthy position for MLB around this metric relative to the other leagues in the country. Finally, MLS’ wage to revenue ratio is interesting to note at only a little over 17%, which is more than 2 times less than the next highest league (MLB) and more than 4 times less than the highest (NHL).
Financially speaking, this would put MLS in a fairly strong position relative to profit when compared to the other leagues, but it also could be seen in a different light. MLS has the lowest average salary by far of the major leagues, so if it has by far the healthiest wage to revenue ratio, why does it not improve the average salary of the MLS player? One of many potential reasons this has not yet happened is that MLS is still expanding and is quite young compared to the other leagues. With growth and expansion there are costs that other mature and established leagues do not have to contend with, so MLS needs to ensure that those costs can be covered.
Another possibility is that like any fledgling business, MLS wants to ensure its longevity and a prosperous future. One of the most common mistakes young companies make is spending beyond their capacity with thoughts of future revenue to compensate, digging themselves a financial hole they cannot climb out of. MLS intends on being around for a while and perhaps it is just trying to build a strong financial base to help achieve that goal. The average player salary will surely go up over time, and with player contracts like that of Clint Dempsey, Michael Bradley, and Jermaine Defoe recently redefining the precedent for what “big time” salary can look like in MLS, we could be looking at a slightly different story in the not so distant future.
What do you think about the difference in average salary across the different sports leagues in the U.S. and their financial position relative to the wage to revenue ratio? Let us know in the comments section below or via Facebook or Twitter.