2021 witnessed the top 100 highest-paid athletes earn $4.2 billion
Brand new research recently came out, which suggested that the one hundred richest athletes are set to earn an estimated $4.2 billion in total income. Research from Sportico suggests this huge sum of $4.2 billion is a combination of salary money (prize money, which is money directly related to the actual sport games, matches and competitions), which accounts for $2.9 billion, as well as, while $1.3 billion is money earned off the court or ring, this includes endorsements, branding, licensing, merchandise as well as public appearances.
It is interesting to see sports players and other celebrities venture into the world of business, to change the traditional pay check earned by a sportsman to be just from the games he or she plays, to also entail other business venture… like whiskey!
Conor McGregor, the world-renowned MMA sportsman has spent the last few years creatively pushing his own Irish whiskey brand, named Proper No. Twelve, which he himself founded in 2018. There are other interesting examples of celebrities pushing their own alcohol brands, such as Ryan Reynolds’ ‘Aviation American Gin’, as well as Dwayne “The Rock” Johnson’s ‘Teremana Tequila’; in short, celebrities and sportsmen alike have creatively ventured into other areas of business. However, McGregor specifically, actually earned $170 million from the sale of his company, behind the creation of the Irish whiskey, this past year so, quite unsurprisingly, this has brought McGregor to the number 1 spot of sportspeople earnings for 2021. (For Sportico’s analysis, they look at athletes’ earnings over the past 12 months).
From some people’s perspectives, athletes getting into the drinks business may seem absurd, but McGregor’s Proper No. Twelve shipped 38’200 cases in 2018 and 345’000 in 2020, so these businesses may be more than just fanciful marketing and, instead, a genuinely good product.
The list of 2020’s highest-paid athletes contained sportspeople from all kinds of sports, and since this list took into account money made from sources other than just salary and competitions, like endorsements, we saw an interesting combination of athletes topping the list from all kinds of sports; here is the breakdown:
- The highest-paid athlete overall came from MMA, Conor McGregor, which earned a total of $208 million!
- The second on the list, and highest-paid athlete in Football was Lionel Messi, earning a staggering total of $126 million: $91 million came from salaries and winnings, whereas $35 million came from endorsements, and other sources.
- The fourth on the list, and highest-paid athlete in American football was Dak Prescott, earned $108.4 million, where $97.4 million came from salaries and winnings.
- The fifth on the list, and highest-paid athlete for basketball was LeBron Hames, earning $101.8 million, where $31.8 million came from salaries and winnings, while $70 million came from endorsements!
For the rest of highest-paid athletes in different sports were: Roger Federer in Tennis, earning $84 million ($46 THOUSAND of which came from actual salary and winnings!); Lewis Hamilton in the sport of Formula 1 racing, which earned an approximate $64mln; Canelo Álvarez in Boxing, which earned around $63mln; Tiger Woods in Gold, earning $62.2 million, of which $62 million were from endorsements, and other sources! The last two sports which made the list were Baseball and Cricket, earning in the mid $30 million range.
As can be seen, athletes can earn exuberant amounts of money, while also making money from varied sources. Some athletes, such as Roger Federer and Tiger Woods make the majority of their money from non-salary earnings, while Lionel Messi and Canelo Álvarez and others make the bigger part of their earnings resulting from contracts and match earnings, as part of their salaries. On the other hand, Virat Kohli, the highest-paid athlete in cricket, gained 120 million Instagram followers in this period, which also showcases the other ways in which athletes have scored this past year in building their influence. For example, Puma, the German sportswear giant actually credited Kohli for their market-leading position in the Indian market in their 2020 annual report.
Different sports in the rankings
Although individual athletes, such as Conor McGregor from MMA earning $208 million, top the list in terms of being the highest-paid athletes, certain sports, when looked at from a grouped perspective, showcase their popularity and earnings potential as a whole. Lionel Messi and Cristiano Ronaldo earn the second and third rankings as the individual highest-paid athletes, earning $126 million and $120 million respectively, however the ‘richest’ sport is the American National Football League (NFL). Professional American Football (not soccer!) tops the list, as the sport contains 32 players included in the top 100 highest-paid athletes. Even though, over the past year, attendance fell by 86%, players had kept their full pay, and their respective 2021 salary caps were reduced by only 8%, while endorsements, advertisements and marketing varied across states. The NFL itself achieved total earnings of $1.219 billion, while Basketball, the second ‘richest’ sport, achieved a whopping $1.218 billion in total earnings.
Basketball was the second highest-paid sport, which saw 31 of its players in the top 100 list, while football/soccer, had 16 of its players on the list. Football players, alongside Lionel Messi and Cristiano Ronaldo earned a total of $0.781 billion, while, in fourth place, Tennis scored a total of $0.261 billion. This is an interesting finding, as it showcases that just three sports, American Football, Basketball and Football (“soccer”), account for over two thirds (around 80%) of the players’ featured on the top 100 list, as well as its earnings. So not only are the highest earnings concentrated amongst just a few sports, but also amongst just a few of the most popular and skilled players – again, they earn their money not just from salaries, but also endorsements, marketing, and starting up – then selling! – their own Irish whiskey companies!
The methodology behind calculating earnings
It is important to state the importance of how these earnings are calculated, especially since a lot of income comes from… well, not playing sports! Endorsements were made to include earnings from sponsorships, licensing, royalties, merchandise, even things like golf course design and even special branded car dealerships. So, this is not entirely reflective of these athletes’ ‘typical’ annual earnings, but it does showcase us how athletes can make money, other than shooting hoops. Moreover, the specific research wherefrom these statistics were taken contain insights from around three dozen interviews, so this is certainly not final data, especially since it does not account for taxes and agent fees, when considering investment income, which seem to be an increasingly prevalent source of income in the sports world for big-name athletes and entrepreneurs.
Is this income sustainable? Athletes tend to be at their peak performance period for a decade or two, depending on their sport; these are athletes which we watch and adore as kids, and then see retire from the sport as we become of age, finish university and enter into adulthood. So, from everything from being at the peak of their physical abilities, to cashing in on interesting investments and businesses, athletes make their living, however this list is maybe the most volatile in the world. Not only do every single year new names leave and enter the list, but the earnings also vary wildly. Either way, the top 100 highest-paid athletes earned an estimated $4.2 billion in 2021, which is amazing and inspirational.