Why do certain sports make so much more money than others?

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The NBA is not more popular in the US than the vaunted NFL, right? Right, the NFL pulls in $13 B in revenue per season, and the NBA just $6B. So then why are average NBA salaries higher than the NFL and every other sports league in the country? The sources are SB Nation and Forbes, both of those two companies are trusted with sports and financials respectively. There is a reason aside from varying levels of popularity in particular sports that certain sports make more money than other ones do. These reasons range from lack of available spots in the big league to the total revenue that is due to the players in the different leagues. The path to every professional sport league is always long and filled with obstacles, so all professional athletes should be paid similarly, but they are not.

It is very difficult for people to achieve the dream of becoming a professional athlete. Part of the reason it is so difficult is because there is an extremely small amount of spots available compared to the amount of people trying to get there to get those spots. The size of rosters is different in every league. Baseball and hockey have extensive minor league systems with AAA, AA, and A, however those players do not make the high salaries. So in the pros for both of those leagues there are 25 players on a roster, 750 players in each league. In the NBA the rosters per team are 12-15 players and the NFL has the largest roster size by far with 53 per team. “There are 1,696 NFL players vs 450 NBA players. So just because of roster sizes, the average NBA salary is roughly double that of the average NFL salary.” SBNation (NFL vs NBA) There is less than ¼ of the amount of NBA players than there are NFL players. “This is the big one. NFL players get twice as much total money as NBA players, but that money is spread over almost four times as many athletes.” SBNation (NFL vs NBA) There are is more money to spread around, but they have to spread around a lot more people. This means two things. First, it is harder to get into the league and make it as a professional. This also leads to the second point that there is less people to spread the money around to. That is why players like Chandler Parsons, a slightly above average played based on his production is making $23.6 M in the NBA, while one of the top 5 quarterbacks in the NFL, Ben Roethlisberger, is earning $17.8 M. Seemingly this is not fair, Big Ben is a top 20 player in the league, while Parsons is an average player, but he is in the NBA, not the NFL, and it was even more difficult for him to make it to the pros, because of the even smaller amount of available roster spots in the pros.  They had to work harder and be better at their sport to get to the pros, so they are owed that extra money from the owners.

Fans often get frustrated when there are lockouts, because they do not understand why they are happening. Often it is the revenue split between how much of the total revenue is owed to the players and how much to the owners. This is the idea of how the revenue is distributed to all the different people in the league. The NFLPA gets 46% of the total revenue, while the NBA has an even 50:50 split. “With $6 billion spread over 1,696 players, the average annual NFL salary would be about $3.5 million. With $3 billion shared among 450 players, the average annual NBA salary is roughly $6.7 million.” SBNation (NFL vs NBA) So even though the league makes half the revenue of the NFL, the NBA has a lot less players, so there players they are able to make more money. The supply of players with that high of a talent level is low, so the demand is high and the owners will pay more for it. The owners are willing to pay this, because the in the NBA it is very challenging to get to the pros, so they know that they are getting their money’s worth. Also helping Parsons get more than Ben is he and his fellow NBA players get 4% more of the total revenue than Ben and his NFL counterparts. So this revenue split is a huge deal for how much players make, and that is why there are so many lockouts in pro sports.

Sports is one of the largest businesses in the world. Athletes always have made some of the most money of any worker in the world. They all have to work hard to get to the pros and take a similar path to get there. So often times people ask why certain sports make more than others. Most believe that it is because of the varying levels of popularity, which is somewhat true because a less popular sport like hockey has the lowest top salary ($14M) by a significant margin in any of the leagues. However the NFL is more popular than the NBA, that is proven by total revenue, $13M-$6M. Despite the higher popularity though, the NFL  average salary ($2M) is $2.9M lower than the NBA ($4.9M). In the previous paragraphs this has been explained by the revenue split between players and owners, as well as the amount of players being lower making it harder to make it to the pros and allowing to spread money amongst less people. That is why top 20 player in the NFL, Ben Roethlisberger, makes less than average NBA player, Chandler Parsons. So there is a true science to why certain leagues make more or less than other leagues do.

Future Research Question: Why are the owners willing to pay their players so much money?