Monday, February 12, 2007
The Puzzling Economics of World of Sports
In an article recently published by Allen R. Sanderson, he discusses the shocking surprise the world of entertainment have on the live of all. Sanderson talks the gross difference between pay of major athletes and movie stars. The author can't figure out a Kelsey Graham can get 37 million over 2 years or an Alex Rodriguez can sign for no less than 25 million a season. Parents complain about the rising cost of everything around them, but don't hesitate to take the family to a baseball game or a concert. The economics of this issue are outstanding. What does a baseball player or a movie star do that deserve a 37 million dollar contract or furthermore, why are we so easily seduced into these schemes and dish out the high prices? I think it's a serious psychological issue that turns into a major economical issue. In order to afford the tickets, we must save more or work more, causing a flux in the economy. Then we must drive there (IE. gas demand goes up) and all of this is done in preparation. Then once we get to the game or movie, we must pay for a high priced ticket to see it. If the team suddenly picks up a member that requests 30 million a year just to wear the uniform or read a line, that money has to come from somewhere. Even if the person didn't cost 30 million and an average of 800,000, ticket prices would still increase in the value of the market and instead of the money entering an athlete's hand or actors pocket, it goes to the owner. Even more, we support the athletes by buying jerseys and collectibles in their name. Yet again, turning the wheels on a vicious machine called our economy.
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5 comments:
Good analysis. Some may criticize high athlete/entainer salaries, but the money does stimulate the economy when these performers buy their sports cars, yachts, and diamond necklaces. Not only that, but their examples of conspicuous consumption cause millions of their fans to spend the same way. This may not be a good effect considering the amount of debt the average American owes.
These entertainer's are getting paid a unreal amount to do what they do. I definitley agree that these actors, singers, and athlete's are spending so much on other products for their personal use and Americans want to be so much like them that we are going out and end up spending so much just cause they did. In America money makes everyone happy and as long as one person spends it so many other's will. If I had to choose which ones got paid more it would be the athlete's just because they have to do the most on their one to be where they are, actor's are being paid to do what they do, but on top of that so many other people are being paid to do their hair and make-up and it is a never ending cycle. We as American's are working so hard to keep our families happy, but its not easy when you have to work so hard that you really don't have enough time to spend with them.
I would deffinently have to agree with both comments. in todays day there is a huge emphasis on living like stars and parents having to work way to much to support that lifestyle. i also dont think that actors and athletes need to be payed so much. sure they work hard, but average hard working citizens dont get 1.8 million dollars per day or 25 million annually. hopefully the continuous cycle of conspicuous consumption will begin to decline, otherwise debt will go up, along with bankruptcy and even poverty.
vicious machine called our economy? oo nice touch. well. pretty good article too. i dont feel like putting substance in this comment
The pay that these athletes and entertainers earn is rediculous. I'd say im pretty good at my job, and im making minimum wage? Some of these people didnt even get to college, and are worth more than doctors and lawyers. Americans spend way too much money on unnecessary things, to support these entertainers who are already making more than most of us will in our lifetimes.
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