The dream of most kids from an early age is to one day become a professional athlete. It's a great way to make a living. Professional athletes are able to play a game that they love and make a lot of money doing it. Over the past 40 years, professional athletes have seen their salaries skyrocket. While some athletes may "only" make a few million off of their athletic prowess, the elite players are so good that they are able to change the salary structure for entire leagues. The rising popularity of the MLB, NFL, NBA and NHL superstars are rewarded with lucrative long-term contracts that should leave them financially set for life.
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One man has signed the two largest contracts in the history of professional sports: current New York Yankees third baseman Alex Rodriguez. A-Rod signed a 10-year, $252 million dollar contract with the Texas Rangers after the 2000 season. A-Rod's quarter of a billion dollar contract agreement was the biggest contract in sports history.
A-Rod then opted out of his original contract in 2008 and inked a new 10-year deal with the Yankees, valued at $275 million dollars. Rodriguez stands to earn at least half a billion dollars in salary alone before he retires.
The greatest basketball player of all time was underpaid for most of his career, only earning $2-3 million dollars a season. This changed near the end of his career however. The Bulls rewarded Jordan for his stellar pay with the highest salary in NBA history. Jordan earned over $30 million dollars during the '96-'97 season, and over $33 million dollars during the '97-'98 season. No NBA player since has ever come close to topping Jordan's pay for the '97-'98 season. (For more, check out For Athletes, Is There Life After Sports?)
You have probably never heard of Kimi Raikkonen, but he is one of the top competitors in his sport. Raikkonen is regarded as the fastest driver in auto racing, and is well compensated for his abilities. He was the highest paid driver in Formula One racing, earning more money than his more famous competitor, Michael Schumaker. Raikkonen earned an estimated $153 million dollars in salary from 2007-2009. He earned an estimated average of $51 million dollars a year over that span, which is nearly $1 million dollars a week.
Ilya Kovalchuk has been in the national news recently for signing a 17 year, $102 million dollar contract with the New Jersey Devils. The deal was quickly invalidated by the National Hockey League, citing concerns that the deal was structured to circumvent the NHL salary cap. Kovalchuk's contract was front-loaded, paying him nearly $100 million dollars of the contract in the first 10 years. The amazing thing is that this isn't even the biggest deal in NHL history. Alexander Ovechkin has a 13-year, $124 million dollar deal that runs through 2021.
A $9 million dollar contract may not seem like a lot today when professional athletes are signing $100 million dollar deals. But it was a big deal back in the 1980s when the average baseball salary was just over $300,000. In 1989, Puckett signed the richest contract in baseball history, a three-year deal worth $9 million dollars. Less than a year later, numerous star players were making considerably more than Puckett.
Kirby Puckett's contract forced baseball owners to open up their wallets, and players have been running through the floodgates ever since. Modern baseball players owe a debt of gratitude to the former Twins stars. (Learn how to make money off of your hobbies, in Contemplating Collectible Investments.)
NFL contracts are not guaranteed, so players are not likely to receive the figures reported to the media. Players like Albert Haynesworth may sign a $100 million dollar contract, but he will not likely play under that contract long enough to receive even half that amount. The exception to this rule is Peyton Manning. He signed a six-year contact back in 2004, and will earn $98 million dollars under that deal.
Manning is already one of the highest paid players in the league, and will likely continue to be. Colts owner Jim Irsay plans to re-sign Manning to the largest contract in the NFL, worth well over $100 million dollars again.
Babe Ruth may have had the highest salary in baseball in 1931, but he was still underpaid. His $80,000 annual salary equates to barely over $1 million dollars in today terms. Ruth's salary was only $5,000 dollars more than that of President Herbert Hoover - superstar players today make 50 times the salary of the President. Even average baseball players make five to six times the President's salary. If he was alive today, the best slugger in baseball would have the right to gripe about his compensation.
The Bottom Line
Superstar players of the '80s, '90s and 2000s have seen their salaries jump to levels never before thought possible. If these players are making hundreds of millions in today's age, just imagine what top-level players will be making in 2020 and afterwards. (For more, check out Top Pro Athlete Pension Plans.)
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