'Excessive' Salaries: Why Are Sports and Business Different?

Peyton ManningJust a couple of days ago, Denver Broncos star quarterback Peyton Manning agreed to take a $4 million pay cut in order to return for the 2015 season. That is not so bad when you consider Manning will still make $15 million for throwing a ball to other highly paid athletes wearing the same team uniforms. Meanwhile, Major League Baseball's Atlanta Braves signed journeyman outfielder Johnny Gomes to a one-year, $4 million contract to be a pinch-hitter and a platooning left fielder. The thing is, no one seems to mind. 

So why are sports and corporate business so different? Why do people get so upset to learn that CEOs are making millions of dollars from the corporations they run all the while professional sports teams have salary requirements that dwarf the total economic output of several small countries around the world?

A case in point illustrating the anti-business movement in America is a recent Yahoo! News story complaining about the fact that former McDonald's CEO John Thompson will continue to receive an annual salary of about $3 million for consulting services. His replacement will earn just about $1.5 million as the company's new CEO. Those who take the time to read the article in depth will quickly see that the author complains of both salaries in light of the average McDonald's worker earning only $9.15 per hour.

The point of the contrast is obvious. The article's author thinks it is patently unfair for a business consultant to earn $3 million annually while a hamburger flipper will be lucky to make $20,000. However, this unnamed author is not alone. All across the media spectrum there are plenty of people who despise successful businesspeople without ever saying anything negative about overpriced athletes. What gives?

It comes down to priorities.

Athletes provide a measure of entertainment that allows us to forget about our problems for a few hours at a time. Sports are, for all intents and purposes, an escape from reality. Furthermore, we are willing to pay an exorbitantly high price for that escape through ticket prices, merchandising, and support of television advertisers. As long as Peyton continues throwing touchdown passes or Johnny keeps hitting home runs, what does it matter that the rank-and-file employees in the front office don't fare much better than the McDonald's worker?

Business Not the Enemy

When you boil the excessive salary question down to its basic elements you are left with one undeniable truth: business is not the enemy. There may be some who cannot wait to criticize companies like McDonald's and Walmart, but they fail to realize that the Denver Broncos and Atlanta Braves are also businesses with a primary goal of earning a tidy return for investors. The only difference between retail business and sports/entertainment is the products they serve. Nevertheless, they are all serving a consumer driven society willing to pay for the things they want.

If we are willing to say that corporate greed is demonstrated by wealthy CEOs who continue to line their own pockets, we cannot excuse professional athletes, actors and actresses, musicians, news anchors, personal injury lawyers, higher education executives, and so on, while maintaining any sense of credibility. It's all or nothing. If it is not acceptable for John Thompson to earn $3 million per year as a consultant, it is not acceptable for Peyton Manning to earn $15 million a year as a quarterback.

Having said that, I believe in the power of the free market system. If the market will bear paying certain kinds of employees millions of dollars in salary and benefits, then so be it. The free market is what has enabled this country to thrive for more than 200 years. Furthermore, every U.S. citizen has an equal opportunity to become whatever he or she wants to be. Each of us is only limited by our goals and willingness to achieve them.

If there is any blame to be assigned over the problem of excessive salaries, it needs to be laid at the feet of individuals who practice greed. But make no mistake about it; greed is an equal opportunity sin. It affects people of all income levels and educational backgrounds; it affects people of every race, religion, and creed. If excessive salaries are a problem in America, the solution is not to castrate big business in an attempt to make life fair for everyone. The solution is to return the culture to a day and age where greed was actually looked on by the majority of people as unacceptable  regardless of who practices it.

Latest Posts

Products from our Store

loading...