The Economics of Soccer and the World Cup

The amount of money that star athletes earn can be staggering. This can be seen in any of the major sports in America – football, basketball, baseball, golf, etc. where athletes earn tens of millions of dollars each year between their salary, bonuses, endorsement deals, apparel, and more.

But what about soccer? It’s never had much of a following in the USA. Salaries in the Major League Soccer League (MLS) are much, much lower than other sports, and so is the fame. As a result, the big time athletes in this country tend to look elsewhere with the hope that their talent will be rewarded by stardom and riches.

This isn’t the case throughout most of the world where people adore soccer (futbol). The star athletes are almost always futbol players. The fans worship them like gods. Children want to be them. Women want to marry them. Entire countries unite to watch them. It’s a miracle!

The difference in popularity among American players and international players can easily be understood when comparing their income earned. International starts have multiple futbol clubs, on multiple continents, wanting to sign them and pay them millions. American soccer stars… not so much.

Perhaps even more shocking is the difference in earned income between some of these international soccer stars and the average wage earner in their respective countries. Most Americans don’t care when an athlete makes $20 million per year, because we’re all pretty wealthy. We all have enough money to eat out and drive big fancy SUVs and vacation. Not so much in other countries.

Portugal star Cristiano Ronaldo earns approximately $44 million per year through his playing salary with Real Madrid and a myriad of endorsement deals. The average Portuguese person earns less than $20k per year.

Lionel Messi earns $41.3 million per year for his efforts, while the average Argentinian earns just $13k per year.

The infographic below, from Neomam Studio, looks at these interesting wealth gaps and also considers the number of houses that could be purchased for the cost of constructing some of the elaborate soccer stadiums that can be found throughout the world.

world cup economics

 

Do any of these statistics worry you? How do you feel about the income gap between average worker and star athlete?

Should governments spend hundreds of millions of dollars building soccer stadiums? Do these new stadiums provide that much utility for the masses? Are there better uses of that money?

I’m torn on these issues. At the most basic level, it’s all economics. Players are paid what the market dictates. If people love them, and they draw crowds, and they sell products, then they are valuable. Who is to say they shouldn’t be paid $40+ million per year? Clearly the companies and clubs paying them think they are worth it.

On the other hand, there is something a little unsettling about it all. Why is so much value and emphasis placed on sports? Why do governments spend tax dollars subsidizing stadiums when there are people starving on the streets?

Sports are a leisurely activity. The world would continue turning even if the World Cup was canceled. Shouldn’t governments focus more on taking care of citizens and eradicating disease/poverty/economic instability and less on constructing new building for an event that occurs once every 4 years?

I don’t know, but it’s an interested topic nonetheless.

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