To summarize, the majority of money in sports comes from fans, whether through ticket sales or retail sales. The fans' emotion and enthusiasm is ultimately what drives the business. About 10% of the total income comes from sponsors, while another 10-20% comes from TV contracts and other revenue streams.
The remaining 70-80% comes directly from athlete's salaries and bonuses. In order to cover these costs, athletes must be selling lots of products, such as jerseys and shoes.
In addition, some athletes make a lot of money by acting as investors who seek profit only when their players win games or events. This is called "incentive compensation." For example, an athlete might receive a percentage of the profits made if his or her player team wins the NBA championship. Finally, some athletes make a living through personal services, such as hair styling and makeup artistry. These are the ones working part-time jobs elsewhere while they train full-time at a sport.
In conclusion, athletes must be talented, work hard, and have the right personality for the sport they play. Beyond that, they need to find ways to attract fans, which is probably the most important factor in earning a large salary.
One of the main reasons money is so important in sports is that people can rally behind it emotionally and become deeply invested. When it comes to sports revenue, merchandising and advertising come in second and third place. The more money that can be made through these avenues, the more opportunities there will be for athletes to make even more money.
The majority of sports fans are aware of how much money is involved in sports, but many people don't fully understand how much it costs to be an athlete. Sports teams need to pay their players to keep them on board - whether it's with a salary or through other means such as incentives- and without this initial investment, they wouldn't be able to compete at the highest level.
Money can also have an impact on which teams win games and attract fans. If you were to build a team of average athletes who were not particularly talented, they would likely lose most of their games. However, if you had someone like Michael Jordan on your team, he could single-handedly carry his team to victory by himself. Money allows professional sports teams to hire very skilled people who otherwise might not be able to afford a chance to prove themselves.
Finally, money can affect how games are decided.
As a result, sportsmen in popular sports earn far more than important individuals such as teachers, police officers, and firemen. These companies pay because they know millions of people will watch the games. The TV networks then sell advertisements for automobiles, pizza, and a variety of other products to display during the games. In addition, the players' unions often get a piece of the action from advertisers who contract with their members.
Athletes also make much more than ordinary people because they have enormous demand for their services. Even though many top athletes suffer career-ending injuries, others continue to be signed up by new teams looking for success in the NBA, NFL, or MLB. There are also lucrative advertising campaigns designed specifically for athletes - Nike's "I Am What I Am" and Gatorade's "Go For It!" are two examples - and brand endorsements ranging from $20 million to $100 million annually for some players.
Some athletes use part of their money to fund their own charitable endeavors. Basketball star Michael Jordan is well known for his efforts to improve education through his company, JumpStart Inc.
Other famous athletes who have used part of their income to help others include Barry Sanders (University of Michigan), Eric Dickerson (Los Angeles Chargers), Joe Montana (National Football League), Rodman Wright (American football) and Jim Thorpe (American football).