3 THE BIG MONEY PLAY

July 16, 1978

FACT: Pro athletes are not overpaid.

The cry rings down from the stands so often that for many players it has become an epitaph: "Ya overpaid bum, ya!" Overdue, maybe. Overbearing, sometimes. Overexposed, probably. But overpaid, no. Next time a fan is moved to carp about athletes' high salaries, he might put himself in the spikes of Rollie Fingers and ponder what he would have done had he been offered a fortune for throwing a ball around in the sun.

Says Fingers, "Was I supposed to tell the Padres, 'No, I won't take it'? It's not my fault they gave me a million six. The owners are cutting their own throats. The smart ones are the players. They keep quiet and take the money."

Like any rare commodity, the value of an athlete's services is determined by the price he commands on the open market. Who is to say that Larry Hisle is or is not worth $525,833.33 a year? The Milwaukee Brewers, that's who, because they chose to award Hisle the richest contract (six-year, $3.1-million) in the 1977 free-agent draft. They could have passed, of course, but the kind of free agents who can make a team a contender are anything but free.

There is a name for the uproarious state of affairs in pro sports. It is called free enterprise. And while the owners try to decide whether the game can afford the high price that free enterprise exacts, almost to a man they echo the sentiment of Jack Steadman, president of the Kansas City Chiefs, "Literally, owners in professional sports are their own worst enemies."

But near-unanimity of opinion among owners does not count for much, because it only takes one of them—a George Steinbrenner, for example—to bust things wide open and prompt the next questions: Is Hisle overpaid? Compared to whom? A teacher? A cop? Jimmy Carter? The Fonz? Rod Carew? Those are qualitative questions, but sports lives by quantitative answers, such as the Steinbrennerian theory that goes, "If a rock singer is worth $200,000 for a night, a player is worth $200,000 for a season."

Long gone are the days when the Cleveland Indians could sign a Bob Feller for a bonus of a dollar bill and an autographed baseball. The old handshake deals and the four-page "standard players' contract" have been replaced in many cases by 20 pages of fine print detailing everything from suites and water beds while on the road to limousine service to and from airports. Every clause is a crisis, including one in which a millionaire player wanted the Knicks to spring for the 75¬¨¬®¬¨¢ bridge tolls he pays when driving to work.

Salaries and fringies have multiplied almost faster than the mind can comprehend. "When I first came into football in 1953," says Ram owner Carroll Rosenbloom, "it was not a business, it was a fun thing. My payroll might have been a quarter of a million. Today you're paying a player that much—one player."

David Thompson, one of 30 NBA players earning more than $250,000 a season, could have bought five NBA teams 20 years ago with the $800,000 he makes. Only five years ago, O. J. Simpson's $733,358 would have paid the wages of 22 players plus a Lithuanian placekicker. NBA salaries have increased 700% in the past decade; baseball wages have more than doubled in the past five years—and the fever is spreading. "Players who did nothing last year while making $25,000 to $30,000 are asking $80,000 to $90,000 this year," says Padre boss Ray Kroc. "What will they ask for if they ever do anything?"

The moon, with an option to renegotiate, if the average salary levels keep rising at the same rate that they have over the past 10 years:

[originallink:10598036:70789]

1977

1972

1967

Basketball

$143,000

$90,000

$20,000

NHL Hockey

96,000

44,109

19,133

Baseball

76,349

34,092

19,000

Football

55,288

35,000

25,000

Players now come to salary negotiations armed with steely-eyed agents and enough hard evidence to argue their cases before the Supreme Court. "The ballplayers no longer carry their batting averages around on their shirt sleeves," says Angel Executive Vice-President Buzzie Bavasi. "Now they've got a computer printout that tells them exactly how many runs they've driven in, how many of those RBIs won games, how many tied games, how many came off the top pitchers in the league. You name it, they've got the answer for it."

How much does a shortstop, forward, tackle or goalie with comparable stats and seniority earn? The players know almost to the penny, drawing on data made available to them by the players' associations. Let one man's stock suddenly rise and everyone is looking to be an instant growth industry. Phillie owner Ruly Carpenter says, "Our players knew what was going on. They read about those fat figures, and they marched in here with outspread palms."

In basketball, where the salaries on a team can range from $30,000 to $800,000, it takes a heap of talking to convince the low man on the roster that anyone less than 10 feet tall is 25 times better than he is. Trail Blazer Executive Vice-President Harry Glickman says, "If the 76ers are willing to give Julius Erving that amount of money, how can we give Bill Walton less?" So the net effect is like Walton working the boards; every time he goes up he drags a few other players with him.

Football, more than any other sport, pays by position:

Average Salary

Quarterbacks

$89,354

Running Backs

60,414

Defensive Linemen

59,644

Receivers

53,760

Offensive Linemen

52,250

Linebackers

50,416

Defensive Backs

47,403

Kickers

41,506

The disparities among sports are such that there are more than a dozen minor league hockey players earning $75,000 or better, which is more than 40 of the 45 players on the Philadelphia Eagles' roster receive. And there is a big difference between what many players earn and what their front-office bosses get, but the fact that the laborers earn more than the employers is not startling to Houston Rocket General Manager Ray Patterson. He says, "There are lots of companies where the salesmen make more than the owners. And the owner is happy to pay it. It's the same in sports. Look at TV. I've read that Johnny Carson makes $2 million. No NBC executive makes as much as Carson, who generates $20 million a year in network revenues."

Julius Erving had something like that in mind when, in attempting to renegotiate his contract with the Nets two years ago, he asked for a percentage of the gate. There was considerable logic in his bargaining position; in 1970 the Milwaukee Bucks realized an additional $700,000 profit that was directly attributable to Kareem Abdul-Jabbar's first season in the NBA. At the time Abdul-Jabbar's salary was $250,000.

Dr. J stood ready to work similar wonders in Philadelphia in 1976, but the 76ers' new owner, Fitz Dixon, who was at the time more of a business head than a roundball fan, was at first not so sure. When informed that the fabled Doctor was available, Dixon had one question: "Who is Julius Erving?" Told that he was the "Babe Ruth of basketball," Dixon's turnstile instincts were whetted, and so was born the Six Million Dollar Man. For the 76ers to profit from the expenditure, Dixon figured that Dr. J would have to bring in an additional $1 million at the gate. Erving did better than that, as ticket sales doubled, radio advertising more than doubled, souvenir sales increased threefold and the 76ers went all the way to the NBA finals.

Admittedly, there are only a handful of superstars who are underpaid at any price, but the returns on stars of lesser magnitude are apparently enough to warrant the endless haggling over riders, covenants and amendments to contracts. The leaking of price tags has also become a routine part of the bargaining process. Any price tags. Both sides tend to inflate the figures, the agents in order to advertise what great negotiators they are and the owners to convince fans that they are really trying. General Manager of the 76ers, Pat Williams, says, "I'd like to retire on the difference between the actual numbers and what's reported."

Even when the price is correctly reported, it is usually misleading because of deferred payments and other variables that make the contracts seem much grander than they are. When Nate Archibald signed a seven-year, $2.8-million contract with the Nets in 1976, it conjured up visions of Tiny hauling off a $400,000 pile of greenbacks in a wheelbarrow every year. In fact, Archibald received $150,000 per annum in cash; the rest was deferred well into the next century. Similarly, Walton (five years, $2 million) drew $160,000 in salary last season, and Bob Lanier (five years, $1.8 million) received $135,000. Both Erving (six years, $3.1 million) and Abdul-Jabbar (five years, $3.1 million) are making do with $475,000 this year.

Among the most deceptive prize packages was the 1975 Catfish Hunter High Hard One, a five-year pact with the Yankees reportedly worth $3.75 million. It blew the lid off the free-agent market. Imagine, it was said, one player making $750,000 a year! In truth, Hunter is receiving $100,000 a year, and his contract is for $2,892,000, more than half of it deferred, including salary (through 1994), bonus payments and scholarships for Hunter's two children. The breakdown:

Five years' playing salary

$500,000

Cash Bonus

100,000

Deferred Bonus

250,000

Deferred Salary

1,500,000

Insurance

500,000

Scholarship

36,000

Buick

6,000

Total

$2,892,000

Lest there be any misunderstanding, the contract stipulates that Hunter must pay for the license plates on the Buick.

Generally, deferred payments mean that the face value of today's megabucks contracts is inflated by at least one third in terms of the team's real investment and the money a player actually will receive. If an athlete agrees to deferrals, he is in effect granting his club an interest-free loan. Moreover, when it comes time to collect in 10 or 20 years, he will be getting paid in inflated dollars that could be worth as little as half their current value. Finally, there is the fact that most of the deferred payments are guaranteed by the franchises and not by the owners or their heirs. Says agent Tom Collins, "I believe in 15 years that soccer will overtake the NFL, and who knows if Tampa Bay, or any other football franchise, will still be around then. If they go bankrupt, the player's money is gone."

But deferred contracts involve risks for the teams, too. In passing the buck, the owners are mortgaging the future of their games to a degree that has some of the leagues' moneymen worried. Already, many franchises have bunches of former players on their payrolls who are off fishing or selling insurance. Then why the owners' big, long-term splurge for talent? Carpenter answers that with some questions of his own: "Is it the desire to buy instant success? Is it to show their fans they are really trying? Is it purely an ego trip? I am sure in the minds of some individuals, they think, 'I can win one pennant quick, then get out of it and let some other stiff pick up the tab.' "

Whither the salary spiral? The estimated percentage of the franchises' gross revenues allocated to players' wages offers some indication:

1977

1972

1967

Basketball

70%

66%

30%

NHL Hockey

53%

32%

27%

Football

31%

26%

21%

Baseball

26%

13%

13%

Basketball contracts have tapered off some, especially in the awarding of big bonuses to untested rookies—Kent Benson, the top choice in the 1977 NBA draft, received $500,000 less than the $2.1 million Marvin Barnes signed for as a No. 1 pick in 1974.

Pro football salaries will continue to go up, especially because there is a lot of new TV money to go around. Baseball's 26% allocation to salaries is misleading, because it has a major expense not shared by football or basketball: teams spend an average of $1.5 million a year on farm systems. So the bloom may be off the rose for players who have signed for only four years in hope of striking it even richer during a second dip in the free-agent pool.

Sums up George Steinbrenner, "The moral of the story is either that athletes were grossly underpaid in the past, or they're making too much now. I'm inclined to think they're close to where they ought to be now."

ILLUSTRATIONGERRY GERSTENIn grappling to sign free agents, even owners admit they are their own worst enemies. ILLUSTRATIONGERRY GERSTENPlayers now come to negotiations with info on when they hit what against whom.

HOLE YARDS PAR R1 R2 R3 R4
OUT
HOLE YARDS PAR R1 R2 R3 R4
IN
Eagle (-2)
Birdie (-1)
Bogey (+1)
Double Bogey (+2)