The recent transfer of the footballer Gareth Bale to Real Madrid for a world record 100 million euro transfer fee took place this week, leading to a new currency – ‘the Bale’. For instance, the GDP of Cuba is 734 Bales. The question asked of students in the recent blog, ‘Is football obscene?‘, is whether the size of the transfer and Bales annual salary of nearly $25 million can be morally justified in light of the parlous state of Europe’s economies and when compared to the budgets of community and health programmes worldwide. However, soccer is not the only sport where huge sums are paid to players. The NFL pays similarly large salaries to their top players. For example, in 2012, Peyton Manning of the Broncos was paid $18 million.
There appears to be a growing gap between individuals who have reached the top of their professions and ‘ordinary employees’, who have suffered badly in the recent recession. Can such inequalities be justified, or should governments legislate to reduce the gaps between the highest and lowest paid employees in organisations?
The USA is one of the richest economies on the planet, but average incomes hide levels of inequality between groups and regions within the country. The following videos illustrate the extent of that imbalance in dramatic and graphic fashion:
There are a number of class activities that can be based on the financial aspects of sports globally and on salary and wage inequalities. The activities can be focused on any national or international sport or based on commercial activities such as investment banking. An investigation of sports economics can form the basis of an internal assessment or extended essay.
Ask your students, individually or in groups, to investigate the finances of a major sport’s industry in your country and write a journalist-style article, which:
- compares the incomes and costs of the industry and assess the industry’s financial viability and debt structure
- examines the nature of the financial backing and identifies the key stakeholders and how reward is calculated
- discusses where the balance of power in the industry lies
Extension activity: Students develop their article with one or two case studies of particular teams or clubs in the sport’s industry and/or a summary of recent newsworthy events related to the ‘business’ side of that sport.