Paychecks, Kids, and Your Beachfront Condo

Retirement Advice by Bill Ribas

So it’s a nice fall day, you’re outside tossing a ball with your kid, and you’re thinking way back in the small of your brain, “man, it’d be nice if he made it big in sports so I didn’t have to worry about my retirement.” If you’re a parent, and have ever played with your kid, this dark thought has crossed your mind at least once. But how can you be sure that child will grow up and choose the most lucrative sport? After all, you want a nice place on the beach, right?

Fortunately (well, for the purposes of this article), Sports Illustrated has charted the top 50 wage earners in sports, including both salary and endorsement deal numbers. Needless to say, Tiger Woods is at the top of the heap, racking in roughly 128 million dollars. Yet 82% of this comes from endorsement deals. While your junior may not be able to stake a claim that large, Tiger’s earnings from the links rounds out to 23 million bucks, and as they say, that’s not chump change. Lest you think your toddler may not reach those heights, Phil Mickelson clocks in right behind Tiger, with a 9 mil/53 mil earnings/endorsements split. And that’s a staggering 85% from endorsements. The only other golfer in the top 50 is Jim Furyk, and similarly, he’s at $4.7/11million 30/70EE (earnings/endorsements percentage – I made that up, but it sounds important), still netting 70% of his income from shilling. Lesson here, if you teach your kid golf, you’d better learn to appreciate gaudy polyester clothing and Buicks, because both are coming your way.

So you say football, perhaps? Well, there are 7 fellows on the list, with only Tom Brady making more off endorsement deals than paycheck, and then not by much. And though the best football players make about twice what golfer Furyk makes, my guess is those players will be substantially beat up later on in life, and need the money for essentials like canes, Advil, and knee braces.

NASCAR? The top 3 make from 18-27 million overall, with a steadily higher ratio of endorsement deals as you go up the ladder. And this makes sense, since who’s going to buy products from a loser? Unless, of course, that loser is Dale Earnhardt jr, who though he may not win many races, still has a high 19/81 EE.

And although boxing has only one member on the list, with Floyd Mayweather jr, there’s not enough data to judge, given his earnings are 40 million, with half coming from fights, half from out of the ring deals.

Baseball? Of the nine players on the list, and despite having enough members to field a team, not one player comes close to making more via endorsements than what he gets in his paycheck. The closest is Yankee shortstop Derek Jeter (73/27 EE), followed by Albert Pujols (79/21 EE), Alex Rodriguez (83/17 EE), and Manny Ramirez (89 /11 EE). Apparently, no one wants to buy anything hawked by a baseball player.

Basketball players make up over half of the group on the list, yet only 3 of those players make more from outside deals than from salary. But if you’re of European descent like me, and have a doughy consistency to your muscle fibers that keep you close to the ground, and not the necessary staggering heights needed to play in the NBA lately, your kid, like mine, doesn’t stand a chance on the hardwoods.

So what’s the answer? If you’re looking for your kid to supply you with a beachfront condo, where should you push him in the sporting arena? Boxing is out, I’d venture, because by the time you reach retirement age, your boy could be in worse shape than you. Same for football, and neither sport has a long lifetime, at least in terms of wage earning. Similarly, I’d avoid NASCAR, since the outlay for gas and insurance early on would break you financially, just like your kid would eventually total your car, and with everything going green, auto racing isn’t a long term strategy. Baseball seems a good choice, and a player can go 15 years or more, building up a nice little nest egg. Basketball is loaded with millionaires, but I’d guess is out of the question for me and my kids – genetically, height doesn’t run too well in my genes, and as for shooting from the line, I’m worse than the Orangemen.

So that leaves us with golf, a sport I am not enamored with, one I do not play well, that often has a elitist air about it, but one that seems to pay off pretty well. It is also the only sport where longevity is encouraged, since, when you are no longer able to compete with the boys, you’re put out to pasture on the senior tour. Take a look at the list’s lowly Furyk – since 2005 he has made 3 to 4 million a year (spiking to 7 million in 2006), but not a bad deal for whacking a little white ball. If he keeps up at that pace, and continues his high earnings to endorsements ratio, that’s a good chunk of change, and one that’ll surely put you in a nice little cabana, if not poolside in the state of your choice.

I’m sure the data could be crunched in many ways, like the outlay you must spend on sporting equipment through the years, where you live and if can you play the sport year round, among other things. And though you may think your kid is a looker, remember beauty sells in this country. Put another way, if Tiger Woods was cross-eyed or had a cleft palate, he wouldn’t be shilling for Nike and all.

On paper, it looks like golf is the ticket to that beachside condo, although the downside is a Kevin Costner “Tin Cup” scenario. In second place I’d say baseball, again with a downside of a Kevin Costner “Bull Durham” result. Wait a minute – what’s this connection with Costner and beat down athletes?