Sports and the Economy

In class on March 15, we talked about free agency in professional sports, salary caps and the average income of the players in those leagues.

Average Salaries in Sports
NFL- $1.9 million ($550,000 minimum)
MLB- $4.25 million ($500,000 minimum)
NHL- $2.5 million ($500,000 minimum)
NBA- $4.9 million ($490,000 minimum) 

http://www.sportsbusinessdaily.com/Journal/Issues/2016/04/11/Labor-and-Agents/Labor-and-Agents.aspx?hl=sports%20salary%20caps&sc=0

In this article, it talks about how Deion Sanders and his agent, Eugene Parker, changed the rules of football and how free agency now works in the present in the NFL. In 1995, Eugene Parker constructed a contract deal that landed Deion Sanders $35 million over seven years with a $13 million signing bonus, which was a record breaking number at the time. After this deal, the NFL created what is now called the "Deion Rule." The way the deal worked, was that Sanders was paid all of the money he would make in the first three years of his deal in his $13 million signing bonus and the salary would rise in the years to come but not by that much. The rest of his salary could then be put into the Cowboys' salary cap with no problem at all. Two years later, the NFL implemented this rule which did not allow for a player to receive a large signing bonus and receive all of the money up front with the rest of the money being salary cap friendly. This relates to the topics we discussed in class, because it deals with the Cowboys having to figure out a way to keep their star player without any problems without their hard cap being exceeded. Jerry Jones, the owner of the Cowboys, and Eugene Parker had come up with a brilliant structure for the deal. Eugene Parker had found a loophole in the system and used it seamlessly. It also touches base on free agency whereas teams will be doing whatever it takes to bring in or in this case, keep the best talent at whatever cost or circumstance possible. Also, the average salary for a NFL player today is $1.9 million. Deion Sanders blew that number out of the water in a time when athletes made nowhere near the amount that they do today. Sanders average salary nearly tripled the average salary of players today. With the loophole found in the system, the Cowboys went on to win the Super Bowl the next year, all the while basking in the creativity and genius thinking of Eugene Parker.