Article VI of the 2007-2011 MLB Collective Bargaining Agreement (referred to as the “Basic Agreement”) deals with player salaries.  Specifically, Section B of the Article contemplates Minimum Salary.  The 2011 season is the last one that will be governed under the current Basic Agreement.  Section B calls for a minimum salary “at the 2010 rate per season plus a cost of living adjustment, rounded to the nearest $500, provided that the cost of living adjustment shall not reduce the minimum salary below $400,000.”  Later in Section B, the Basic Agreement explains how the new number is computed.

Cost of living adjustments for the Major League minimum salary described above in paragraph (1) shall be computed as follows: To determine the 2011 salary rate, $400,000 shall be multiplied by a fraction, the numerator of which is the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics (CPIW) for November 2010 and the denominator of which is the CPIW for November 2008.

Based on my understanding of the CPIW, the numerator should be 214.750 and the denominator 207.296.  That fraction, multiplied by $400,000, comes out to $414,383.30, which rounded to the nearest $500, actually equals $414,500.  Was it just lazy reporting, or did the MLB actually make an error in its rounding, because every report I have read says that next year’s minimum will be $414,000.

Minor League minimum salary for players on their clubs’ 40-man rosters is set at $67,300 (up from 2010′s $65,000), but only players who have at least one year of being on the 40-man under their belt or at least one day of MLB service will be bound by the salary floor.  For Minor League players on the 40-man roster who do not fit into either category (i.e. players just named to their teams’ 40-man rosters and without any MLB service), their minimum salary will be $33,700 (up from 2010′s $32,500).

Discussion Of 2011 Major League And Minor League Minimum Salaries from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

It is easy to make the argument that the UFC is the fastest rising sport in the country and possibly in the world. For someone who is looking to get into the sports industry, it could seem like a potential “gravy train” to financial success. With the landscape of potential major league clients diluted due to heavy competition, MMA may look like a nice alternative to leagues such as the NFL or MLB for prospective agents, managers, or companies. I decided to look a little deeper into the cash flow of a UFC fighter, and his potential to make money down the line.

Just like in major league sports, you have your stars and your role players, your rookies and your veterans. With the UFC; however, the gap is a little larger and the talent pool is a lot smaller. The UFC signs its fighters to contracts based on number of fights and not years like in major league sports. A rookie contract is greatly reduced from that of an established veteran, unlike football where a rookie can come in and be paid millions of dollars before stepping foot on a field. The contracts aren’t guaranteed, and if you find yourself in a losing slump, you will be looking to work elsewhere fast. For most fighters though, you get paid to show (fight) and you get paid to win. Usually the figures are the same to show and to win, so a loss could mean half of your potential purse for the fight. The UFC also offers fight bonuses as added incentives for their fighters. Fight bonuses are rewarded for the fight of the night, knockout of the night, and submission of the night and could be substantial to a fighter. It is the UFC’s way to sweeten the pot for a good fight.

After looking at salary figures from the last few Pay Per View events, it seems that the average fighter’s salary ranges from around $6,000 to $35,000 to show and to win, hardly a fraction of an NFL game check. Marquee fighters who have re-negotiated their rookie contracts earn in the lower six figure range, with the top level salary per fight that I have seen topping out at $500,000. Fight bonuses usually vary, but range between $50,000 to $70,000, a potential substantial bonus for someone in the lower pay range. A fighter could also be awarded multiple bonuses for a fight, which could make for a huge pay day. This past weekend, UFC Welterweight Josh Koscheck earned both fight of the night and submission of the night bonuses for his win over Anthony Johnson. Koscheck’s salary for the fight was $53,000 to show and $53,000 to win, and added to the $70,000 per bonus award, equaled a total of $246,000. Not bad for a night’s work, but hardly the norm.

It is safe to say that fighters make most of their money through endorsements. Companies pay good money to advertise their brand on a fighter through some sort of signage or apparel. I was curious to see how much fighters could potentially make through these kind of endorsements. After looking into it I found some numbers for Joe Lauzon, a ‘The Ultimate Fighter’ veteran and mid-level UFC fighter with not too much name cache’ but someone who was certainly going to be on T.V. The numbers are as follows:

• Team hat: $5,000
• Front of team shirt (entire front): $15,000
• Back of shirt:
  • Top banner (large font, across entire shirt): $1,000
  • Small banners (about 8 total): $500
• Fight Shorts:
  • Butt banner $5,000
  • Outside sides of thighs, front or back: $3,500 each (there’s 4)
  • Inside of thighs (4 available): $2,500

These numbers, when added up equal $54,000, which was likely more than Joe made for the entire fight. Remember this is for a mid-level fighter, so I would have to think that fighters such as Chuck Liddell and Brock Lesnar, etc are making in the six to seven figure range for their sponsorships in addition to their fight salary and potential bonuses. If you were someone who wanted to get into the business of MMA and represent fighters, it would be your job to secure these sponsors for your fighters, and would also most likely be your main source of revenue.

Fighters could also take these sponsorships, and with the help of a good manager, turn them into endorsement deals. Print ads, commercials, and online signage is a very profitable business and could be a great way to add increased revenue for your fighter. Also, endorsement deals are different from sponsorship deals in the sense that the UFC doesn’t ban their fighters from endorsing brands, but have recently put certain sponsors on their own little blacklist at UFC events. Brands who have challenged the UFC in some way, big or small, have found themselves on the outs with the UFC, and it can affect some fighters profoundly. The UFC can justify this by saying that in other promotions, the sponsorship dollars don’t even come close since the UFC is so popular. They feel that controlling sponsorships is perfectly justified. There was talk around UFC 100 that the UFC was going to charge potential sponsors $100,000 for the right to sponsor a fighter at the event because of the sheer magnitude of the night. Is this any different than the NFL charging millions of dollars for 30 second commercials during the Superbowl? That is to be debated, but is something to be considered if you are a company looking to get involved.

There is money to be made if you are a fighter or represent a fighter in the UFC. Compared to other professional sports organizations and boxing, the UFC still seems to be on the lower side of things as far as compensation for their athletes, but for a privately owned company who puts on and promotes their own events, it is reasonable for the moment. Still, some fights feature fighters who make $300,000 against fighters who are making $30,000, something I wouldn’t exactly call fair, especially when the $30,000 fighter wins. Such is life in the UFC at the moment, and one would think it is just going to get better as it gets bigger.

Please post any questions or comments and have a safe and happy Thanksgiving! Follow me on Twitter @Zachlipari

MMA Athletes: Fighting For Every Dollar from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Unlike most of the Big 4 leagues in the USA, AFL (Australian Football League) contracts aren’t released to the public. Therefore a lot of speculation is created as to who is making the big bucks. Fox Sports has compiled a rough guide through research in the industry as to who are the highest paid athletes in the game. Of course, there a few surprises.

Only 2 players broke the the magic $1 million dollar mark for 2008- Chris Judd and Jonathan Brown. Chris Judd is one of the most recognizable players of the game, and his 5 year deal was the largest contract signed in AFL history when he moved to Carlton at the end of 2007. Jonathan Brown has been a Brisbane player all his career, despite offers from his home state of Victoria.

There is a gap of about $200,000 to the next group of players, which include some of the best Key Position players of the game.

Of the players making over $500,000, most are Key Position players, and are approaching or over 30 years-old (despite the top two being in their mid twenties). If a player is over 30, he can be classified as a veteran, which means only half of his salary counts towards the salary cap, which stands at just over $7 million.

Looking to the future of who will be earning some serious cash, Luke Hodge‘s current deal expires at the end of this year, and he will certainly command somewhere in the $700-800K range. Forward Lance Franklin, 22, will be earning over $500,000 next year, and is touted as one of the most promising players in the game. Expect a deal near $1 million a year for his next contract. Other players with higher earning potential include Gary Ablett Jnr., Daniel Kerr and Nick Riewoldt.

The AFL operates on a rookie pay scale similar to the leagues, so the initial starting salary is around $40,000-60,000. This is quite small considering the average Australian wage is about $50,000.

In comparison to overseas sports these players earn very little, but in terms of Australian sport only Super 14 or cricket players would command higher salaries.

Read the full article here.

AFL Rich List from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Football

• Clark Judge of CBSSports.com thinks that Tom Condon has a chance at being the next NFLPA Executive Director [Next union leader would be wise to learn from Upshaw's legacy].
• Matt Ryan leads the list in terms of guaranteed money [2008 NFL Draft - First-Round Selections - Contract Terms].
• The 33-day holdout is over [Harvey's deal with Jaguars could be worth $30 million].

Basketball

• New Carnival of the NBA with lots of pics of the Joker [Carnival of the NBA #59 : We're all Jokers].
• Another player jumps overseas…for his shoe deal [Jason Kidd Leaves Nike - Signs with Peak].
• Something just seems awfully wrong with looking at Marbury’s name sitting at #2 [NBA - Top Player Salaries For 2008-09 Season].

Olympics

• I would have put Lezak higher than #25 [Beijing Wrap-Up: The 25 Most Marketable Olympians].
• Michael Phelps will be making a cameo appearance on Entourage [My Michael Phelps All-Access Day].

Baseball

• True Religion is TOTALLY cooler than Seiko [Giants' Zito has new role: male fashion model].

Shabbat Shalom: Friday Wrap-Up from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

When beginning my search I noticed that Sports Law Blog did a similar comparison with salaries and success, but I could not find other comparisons after 2006.  I will attempt to continue their analysis for the first half of the 2008 season.

To start, I will analyze the top salaries, which includes 2/3 of the top AL East teams, the Red Sox and the struggling Yanks.  As many of you know, the Yanks are the most expensive team in baseball, spending a total of $209, 081,577 on their 2008 roster according to USA Today.  The next team on the list is the other New York team, the Mets, spending $71,288,201 less than the Yanks with a total of $137,793,376.  The Red Sox are fourth on the list spending $133,390,035 on their roster after winning the World Series last season.

The surprising Rays are second to last on the list, spending a mere $43,820,597 on their total roster this year.  That roster has earned them the best record in baseball. The Rays are 53-32 so far and are currently in first place by 3 games over the Red Sox, proving to the league that a low salary does not mean low quality players. Evan Langoria is having a Rookie of the Year type season, but no other Rays are really having a breakout year. This is a scary thought for the rest of the MLB with the second half of the season on the horizon. The Rays play as a team, with the heart and patience to hang in games and come back late in a match if they need to, unlike that of the Yanks so far and many other high paid rosters.

Another surprise team so far this season has been the other Florida squad, the Florida Marlins.  I remember hearing on opening day that the ENTIRE Marlins salary for 2008 was less than the salary of Alex Rodriguez alone this year.  The Marlins management has spent the least in the MLB, paying their players $21,811,500 to start opening day.  After A-Rod and his agent, Scott Boras, worked out a new contract with New York last season, A-Rod was guaranteed $28,000,000 for 2008.  I only analyzed and discussed a couple of teams.  If you want to view the entire list with all 30 MLB teams and their salaries click here.

Using the USA Today data and the results from the past several regular seasons and playoffs, I can conclude that a high payroll does not guarantee success. I have learned after watching March Madness, the NBA, MLB, NHL and just about every sport, that earnings and prior statistics that commentators and gamblers use to handicap games really mean nothing. It is all about the desire, dedication, training regimen, persistence, a little coaching and the overall mindset of the team that wins games.

Look at the NY Giants Super Bowl run and success last season. They came out of nowhere to prove everyone wrong and beat the heavily favored Patriots. Going by all the stats in the NFL, the G-men had no shot at beating Brady and the undefeated Patriots. The only thing they had on their side was the confidence from the great run they were on during the playoffs.

Since baseball does not have a salary cap, teams in New York can spend whatever they want on big name players. However, the only thing that matters at the end of the day is getting wins. Baseball is a team sport and as we can see from the Yankees past 6 seasons, big names (and paychecks) don’t always forge together to win big games. All a team needs to do is get into the playoffs and then anything can happen.

Although the MLB season is only almost half over, it still pays to point out that money does not correlate with success.  Darren looked at how this may eventually affect MLBPA agents in a post that he made back in 2006: Will The Yankees Success Hurt Agents?

It’s NOT All About the Money from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

So which database is better? What does each site offer?

HoopsHype

• Positives:
  • Ranks the top 100 agents by their clients’ salaries.
  • Ranks the top 15 agencies by their clients’ salaries.
  • Each agent’s page has a listing of players with their current and future salaries.
  • Notes how many all-stars each agent represents.
• Negatives:
  • No alphabetized listing of agent names or agencies.
  • Only lists 15 agencies.
  • No key to explain color difference for player salaries.

DraftExpress

• Positives:
  • Amazing sorting system. Can sort by agency and agent in alphabetical order, agent tier, team alphabetically, and player alphabetically.
  • Broken down into 5 categories: NBA Agents/Agencies, Non-NBA Agents/Agencies, Top Agents, Top Agencies, and Agency/Agent Affiliations.
  • Top agents are further broken down by total guaranteed salary, current year salary, and number of clients.
  • Many more agencies listed than at HoopsHype.
  • Easy key to explain color difference for player salaries.
    
• Negatives:
  • There are so many options, you may no longer talk to your children.

Jonathan Givony does it again. DraftExpress has created a database that, if constantly updated, should become the premier source for basketball player/agent information.

Take Your Pick: HoopsHype Or DraftExpress from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The 855 players on Opening-Day rosters and the DL averaged $3.15 million, up 7.1 percent from last year’s starting average of $2.94 million.

The median salary is $1 million, exemplifying the fact that the superstars are skewing the average salary mark to the high $3 million figure. Most major league players are making much less than $1 million per year. Still, 434 players will make more than $1 million this year, which is a new record number.

Here is a quick list of the teams with the highest payrolls, bumping up those average player salaries:

1. New York Yankees (AL East) – $209.1 million
2. Detroit Tigers (AL Central) – $138.7 million
3. New York Mets (NL East) – $138.3 million
4. Boston Red Sox (AL East) – $133.4 million
5. Chicago White Sox (AL Central) – $121.2 million
6. Los Angeles Angels (AL West) – $119.2 million
7. Chicago Cubs (NL Central) – $118.6 million
8. Los Angeles Dodgers (NL West) – $118.5 million
9. Seattle Mariners (AL West) – $118 million
10. Atlanta Braves (NL East) – $102.4 million

Six out of the top ten payrolls come from the AL. Four out of the top five are AL teams. Represent a player who is bound to turn into a superstar warranting top dollar figures from his team? May want to try to get him onto one of the top five teams listed above. One team to stay away from would be the Florida Marlins, with a total payroll of $21.8 million. Then again, they beat the #3 payroll, New York Mets, last night.

On Average, Baseball Players Are Banking from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules