SPORTS STARS CAN MAKE MILLIONS OF DOLLARS THROUGH ENDORSEMENTS AND PRIZE MONEY WHILE INDIVIDUALS WORKING IN CERTAIN SERVICE PROFESSIONS LIKE NURSING, TEACHING ETC REMAIN RELATIVELY POORLY PAID. THIS IS AN UNACCEPTABLE DISTRIBUTION OF ECONOMIC REWARDS.
Although footballers are criticized for making millions of dollars through prize money and endorsements nevertheless their higher incomes then professionals such as teachers or nurses are justified because of the rare talents they posses, principal of demand and supply, and the role model image associated with them as a result of willingness of people to pay for them which makes them earn these huge sums of money. Footballers have higher annual earnings because of the rare talents they posses. Each footballer has a unique quality which makes him different from other footballers whereas nurses and teachers have homogenous skills which leads to the demand for footballers being much higher than their supply and the demand for professionals such as nurses and teachers being lower than their supply. Statistically speaking, in 2009 the registered number of teachers in USA were approximately 7.2 million and the registered nurses were about 27.374 million (“Newsroom”). This data is for USA only and still the numbers are so huge. This shows that the number of such service professionals is way too much higher than the number of footballers and this makes both the groups function in different market structures. Homogenous skills and high supply makes the market for service professionals a perfectly competitive one where everyone is a wage taker and no one in the market can individually affect the prevailing equilibrium wage. Equilibrium wage is at the point where demand and supply forces intersect, in case of service professionals demand being lower then supply the equilibrium wage turns out be lower than those of footballers where demand is higher than the supply causing equilibrium wage to be quite high. The unique skills of footballers make their market a monopoly where and an individual can affect his wage. Hence, the differences of the market structures they function in are a major cause of their wage differentials. Footballers not only earn through the prize money but also through endorsements of different brands and by selling their own signature products. According to an article in one year David Beckham made $10 million through his merchandising shirt sales and $25 million from his sponsorship contracts with brands like Motorola, Pepsi, Gillette, and Volkswagen (Bose, Mihir). This sum of $35 million was more than the $20 million he made from his salary and share in club profits in the same year (Bose, Mihir). Answer to why these footballers make so much money lies in their celebrity and role model image. These footballers have huge fan followings. Whatever they do becomes a “must do” for their fans. All these fans want to become like these super stars and hence they try to follow all that these stars do. Therefore, whatever brands these footballers endorse become “must haves” for their fans. Hence, this proves to be a very profitable marketing strategy for the companies who own these brands. Beckham’s commercial agent Simon Fuller of 19 Entertainment told Bose (BBC Sports Editor) in an interview that “I have long dreamt of being responsible for the biggest sporting deal. With the help of David Beckham and his unique sporting talents I have achieved my aim” (Bose, Mihir). If in place of a footballer a nurse or a teacher is put into a commercial of a product u cannot expect the sales of the product become very high in the response because teachers or nurses don’t have huge fan followings. Another example could be of Christiano Ronaldo who has a following of 26 million fans on the social networking site Facebook which is twice as much of any other athlete and 3 million fans follow him on the Twitter. Such huge number of fans play an integral role in attracting sponsors like...
Please join StudyMode to read the full document