Athlete Representation

Team versus Individual Sports

Three out of the four major professional sports leagues have a salary cap in place, with Major League Baseball being the lone exception. As a result, teams can only spend so much money on players and, consequently, players are “capped” in terms of what they can make for their on-the-field athletic ability. Therefore, players and their advisors must look for other ways for the athlete to make money. This is where the importance of endorsements comes into play. Of the top 10 highest paid athletes in 2009, LeBron James (ranked third overall) made the most from endorsements for athletes involved in team sports. His earnings of $28 million through endorsements were nearly double his salary of $14.4 million for that year. Next on the endorsements earnings list was Shaquille O'Neal (ranked 5th overall) at $15 million, followed by Peyton Manning (ranked 10th overall) at $13 million. The top Major League Baseball players listed were Derek Jeter (ranked 9th overall) at $8.5 million and Alex Rodriguez (ranked 4th overall) at $6 million. Although the level of importance of endorsements may fluctuate depending on which league the player participates in (i.e., NBA versus NFL versus MLB), endorsements are nonetheless essential to an athlete's earnings.

When dealing with individual sports—such as golf and auto racing—endorsements can play an even bigger role in an athlete's annual compensation, because the athletes in these sports only make large amounts when they win a tournament/race, or at least finish near the top of the final standings. In the ranking list for 2009, the two highest-paid spots were taken by athletes who participate in individual sports. Tiger Woods's endorsement earnings were $92 million (ranked 1st overall), which far outweighed his 2009 winnings of $7.7 million. Right behind Woods was another golfer, Phil Mickelson (ranked 2nd overall), who earned $46.6 million through endorsements, compared to his tour winnings of $6.35 million. NASCAR driver Dale Earnhardt, Jr., who had not won a race since 2008, ranked 11th due, in large part, to his endorsement earnings of $22 million. Other athletes who participate in individual sports who made the top 50 highest paid list were NASCAR driver Jeff Gordon (ranked 21st overall) with $15 million in endorsement earnings and PGA golfer Jim Furyk (ranked 41st overall) with $11 million earned through endorsements. Again, these rankings and numbers illustrate how the endorsement factor in individual sports, such as golf and NASCAR, may be more important to these athletes than athletes in football or basketball.

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