Eloquent Incoherence

That’s right, $250 million. I didn’t add a zero by accident. Beckham will be the second-highest paid athlete in the world (behind Tiger Woods). He’ll make twice as much as baseball player Alexander Rodriguez, the highest-paid athlete in any of the four major American sports leagues (the NFL, the NBA, MLB, and the NHL). Beckham must have the best agent in the world, because most Americans could care less about soccer (or “football”, as it’s called outside of the United States and Canada) and are barely even aware that MLS exists, let alone a team called the L.A. Galaxy. The $250 million figure includes endorsement and merchandise deals, which athletes in the four major sports leagues typically negotiate separately from their playing contracts. But Beckham’s contract presumably allows him to pursue endorsement deals independent of those packaged with his playing contract, meaning that he could end up making even more.

Beckham’s deal is likely to spark discussion about the increasingly outrageous salaries of professional athletes. The deal is indeed ridiculous, but there are lesser-known people who make much more money than he does. Many CEO’s of Fortune 100 companies have annual compensation packages that run into the 9-figure range. Their deals often don’t make the headlines unless they become the subject of a corporate scandal (like Dennis Kozlowski). If a professional athlete performs poorly, his market value drops and he makes less money. If a corporate CEO performs poorly and resigns, his “golden parachute” kicks in and he gets a severance package worth upto hundreds of millions of dollars. And while professional athletes typically hail from working-class families, CEO’s and wealthy businesspeople are often born into privileged communities with high-powered connections and no shortage of opportunities.

It’s easy to direct our anger at Beckham’s deal because he’s a flashy celebrity and a public figure, but the people who profit from his athletic skill and celebrity status are drawn from the elite group described above and make even more money than he does. Unlike Beckham, they largely escape our scrutiny. For example, when players in the major professional sports leagues go on strike (MLB 1994, NFL 1987) or are locked out (NBA 1998, NHL 2004) because of labor disputes, our first reaction is outrage at how selfish and spoiled they are. But what about the owners? As much as the players don’t need their outrageous salaries, the owners of the teams they play for need their more outrageous profits even less. As ridiculous as the demands of players’ unions often are, the demands of the owners who oppose them are even more ridiculous in light of their massive fortunes. Yet most of our scorn and disdain is directed at the former and not the latter.

Sports stars and other celebrities are no doubt overpaid and spoiled. But they’re not the most powerful people in society, nor are they the worst examples of materialist excess. That distinction goes to the people in the shadows who pull the strings.

(courtesy of Manal)

One troubling aspect of economic growth in Asia (particularly China and India) is that the development and progress it yielded has been concentrated almost exclusively in urban centers. But the emergence of business process outsourcing centers in India’s rural villages is one of the first signs that the poorest Asians are beginning to see the fruits of the growth around them.