Every contract offered to a professional athlete is a gamble. The franchise signing the contract is hoping that the player will remain healthy and productive for the entirety of the deal, meeting or exceeding the performance expectations implied by a multi-million dollar contract. But the reality is that sometimes these blockbuster contracts turn out to be a bad deal.
Players may struggle after moving to a new team or grow complacent due to their financial security. Yet, if the contract is guaranteed, some teams will still have to pay a player millions of dollars over the course of many years, even though they are not meeting expectations. Signing a player to a bloated contract can hamstring a franchise for years, making it difficult for them to afford other quality athletes.
To determine the most overpaid athletes in pro sports, 24/7 Wall St. reviewed Sports Reference data on how NHL, NFL, NBA, and MLB athletes performed in the most recently completed regular season and compared that performance with their salary using data from Spotrac. Players who opted out, retired, or missed most or all of the season due to injury or illness were not considered.
The sports landscape has all but gotten back to normal after a year of uncertainty due to COVID-19. Games were moved, seasons were shortened, and fans were not allowed to watch their teams in person, not to mention many also caught COVID-19, or opted not to play because of the virus. While some athletes were able to thrive in their altered environments, others struggled. In some cases, the dip in performance could just be a blip in an otherwise sterling career. But for other players, it could be a sign of the inevitable decline that comes with age.
Many of the most overpaid athletes are former MVPs and All Stars, who are nearing the end of enormous nine-figure contracts they signed while they were in their prime. Franchises often achieve success by drafting these kinds of players and making championship runs with blossoming superstars on rookie contracts, which pay much less than veteran deals, before having to secure them with high-value long-term contracts. These are the teams that won a championship on a shoestring budget.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.