IE 11 is not supported. For an optimal experience visit our site on another browser.

Will soccer paychecks fall?

The top players earn dizzying sums, but their paychecks lag those of their peers in U.S. baseball and football — and now there's talk of salary caps.
Brazilian striker Ronaldinho Gaucho prac
Brazil's Ronaldinho earned nearly $12 million in salary and bonus last year.Antonio Scorza / AFP - Getty Images
/ Source: BusinessWeek Online

Call them the sultans of soccer. They are the top-paid players in the sport: a contingent led by Brazilian sensation Ronaldinho, who last season took in nearly $12 million in salary and bonus from his employer, the Spanish club Barcelona. But even that figure pales next to the more than $15 million he pocketed from licensing and image rights deals along with myriad endorsement contracts, including those with Nike, Siemens, Chevron and Unilever. Little wonder the 26-year-old forward can’t seem to wipe that smile off his face.

Come June 9, all of soccer’s millionaires — bar a couple who have been sidelined by injury — will gather in Germany for the FIFA World Cup kick-off. For a group of thirtysomethings, including British tabloid staple David Beckham, Frenchman Zinédine Zidane, and German goalkeeper Oliver Kahn, the tournament will mark the final chapter in their storied careers. Up-and-coming players like Manchester United’s 20-year-old Wayne Rooney may outperform these veterans on the pitch, but the younger generation may not top the Old Guard's earnings, at least not when it comes to club salaries.

What’s more, even the top practitioners of what Brazilians call "the beautiful game" may never earn as much as their peers in American football or baseball. Says Dan Jones, who heads Deloitte’s sports marketing group: "The New York Yankees have a total salary of around $200 million. That’s more than even Chelsea could manage." (Chelsea is the English club owned by Russian oil billionaire Roman Abramovich).

Stocking up
Make no mistake: Soccer remains a growth business. The sport continues to pick up fans around the world, even in the U.S., as well as commercial sponsors willing to pay top dollar for endorsements from elite players. These trends have buoyed revenues for some of Europe’s top clubs. (Although soccer commands legions of fans in the developing world, Europe is where the action is, moneywise.) According to data compiled by Deloitte’s sports business group, the top 20 clubs pulled in some $4 billion in revenue combined in the 2004-05 season — up from $1.5 billion in 1996-97.

Clubs like Chelsea and Real Madrid have used their growing wealth to stock up on top talent. In the process, they have relentlessly bid up player salaries. According to a forthcoming Deloitte report, wages in the Premiership, as England’s top league is known, have been rising 20 percent annually in recent years. That worrisome trend has spurred debate on whether the sport would benefit from salary caps.

The clubs are just starting to rein in salaries. Premiership wages fell 3 percent in the 2004-05 season, reports Deloitte. Clubs in Italy and France also managed some small reductions. Jones says he is encouraged by the trend, but "would like to see more performance-related pay." For high-paid titans like Zidane, who are nearing the end of their careers, there may be no better time to hang up their cleats.