Over the last decade, players's salaries in professional sports have been increasing dramatically. Some people suggest that these oversized salaries are hurting professional sports, while others would suggest that these players are simply being paid what they are worth. With each passing season, the paycheck comparisons are getting stranger and stranger. From the baseball diamond to the gridiron, players' wallets are bulging. The Forbes Super 40 - the nation's 40 richest jocks - watched their salaries swell by 24 percent last year to an average $17 million per athlete.
Since 1983, the average baseball wage has risen by 870 percent, to $1. 3 million. "The escalating salaries in professional sports today is absolutely the biggest problem that all of the four major leagues [basketball, baseball, hockey, and football] face in terms of their ability to thrive in the next millennium," says Dean Bonham, a Denver-based sports marketer. "There is nothing that is even a close second." The high salaries in the NBA have already given the league an image problem.
The National Basketball Association had locked out their players in an effort to scale back salaries that are larger than many industrial corporations' total revenues. Player salaries need to be controlled in a way. Most professional sports players pay is based on a guaranteed contract. A good idea would be to induce a pay-for-performance concept.
Sports players should be held accountable for their performance. Players demand guaranteed contracts, but there can be room for improvement by adding a greater degree of variable pay linked to performance measures. Performance measures will motivate players to achieve the team goal of winning games. Players should be compensated according to how much they contribute to team success.
Without appropriate performance-based incentives in compensation, players have less motivation to win games when they realize they " re out of the playoff hunt. An owner should tie a player's compensation to performance measures that an individual player can be held directly accountable for and that drive a team to win. A players' contract with 50% of target pay linked to performance would protect owners from overpaying for a poor performer and protect the player from being underpaid if he delivers superb performance. In order to implement a pay-for-performance system, a team owner must establish reasonable targets for his players. A team owner could benchmark a player's performance against other league players of similar experience who play the same position. An owner could also use the historical performance of a player to develop future target levels.
Tying pay to the appropriate performance measures will ultimately benefit a team. There are many team owners in the industry today that are willing to shell out large sums for their team rosters. Some owners do this due to fact that they can afford it and others cannot. The teams that cannot afford to pay large amount are forced to sign lower paid players. Owners pay the money for the talent, because they are looking to win a championship in the present time.
By paying large sums of money to the players, owners can increase the price of tickets, concession, gifts, etc. The price of these will rise, as the costs will remain the same. Players' large salaries have affected competitive balance, profitability and ticket prices in some ways. Professional sports have reached a point where only the richest teams can compete. As player salaries rise, the ticket prices do the same. The people in the cities that can afford to pay the high ticket prices, most likely will have a better team than poorer cities.
These poor cities teams cannot afford to pay their players large sums, therefore they sign lower paid players that do not have the talent to win. These teams are unable to be competitive in the league. With player salaries rocketing upward, new sources of revenue need to be identified to improve profitability. A salary cap cannot be the answer to maintaining competitive balance. A salary cap works negatively on competitive balance. A salary cap punishes success, forcing well-built, winning teams to shed talent on a near-constant basis.
It also makes it almost impossible to trade; a team cannot make a quick adjustment. A salary cap may help teams be competitive by ensuring that the poor teams spend a minimum and the rich teams have a maximum that they can spend. The rich teams will still be signing the better players, therefore it will not work out. The higher revenue teams still would have an advantage, with a salary cap, due to its point to maximize profit.
Player salaries should reflect there worth to the team. In recent years the salaries have gotten out of hand. They have skyrocketed to outrageous amounts of money. Once a player signs a huge contract, there desire to win declines. They think of it like this: "No matter win or lose, they will be getting paid millions for the years of the contract." Contracts need to be negotiated in a way that will help keep the league alive. Fans are becoming disturbed by the ridiculous contracts that are negotiated.
Players should be paid what they are worth, not more or less than their worth.