Why are athletes paid so much?
According to Basketball Reference, the median NBA player salary in the 2020-2021 season was $3,549,383 [1]. Compare that to the annual median household income in the US for 2021: $79,900 [2].
That means that the average NBA player makes nearly 50 times the average US household.
Why is there such a staggering disparity?
58.1% of all wage and salary workers in the United States earn an hourly wage in 2021 [3]. By its very definition, earning an hourly wage is trading time for dollars. Meanwhile, NBA players are compensated with a salary, and often bonuses based on performance.
Boiling this down, hourly wage earners are paid for their time while salary earners are paid for their production.
Trading Time for Dollars
Consider a manufacturing plant. This plant makes widgets. Widget Corp makes one thousand widgets each day. They’ve been around for five decades building more or less the same widgets.
Everyday, a slew of workers show up to the plant to make that day’s worth of widgets. There are machine operators, assemblers, quality inspectors, managers, vice presidents, prototypers, etc.
Most of these employees trade their time for dollars. Widget Corp buys their time, about 8 hours every weekday, for a couple dollars per hour. Each employee knows their job, and for the most part, they do it.
There is very little decision-making that goes into their jobs. Each day they are given a task. Everyday they complete their task, asking questions when needed.
Trading Attention for Dollars
Let’s examine the managers and c-suite executives at Widget Corp. Managers, by the very nature of their job, are directly in charge of people. They are the ones handing out daily tasks and projects to the hourly employees. Widget Corp executives and the sales team provide production contracts to be fulfilled, and the managers use their manpower and machine-power resources to execute on those contracts. They make decisions based on production numbers, capacity, and abilities of their workers and machines to keep the plant consistently manufacturing widgets.
The managers are paid for their time, in that they need to be at the plant overseeing the work. But they are also paid for their attention. A manager who pays specific attention to maximizing production while minimizing errors and costs is highly valuable to the company. Meanwhile, a manager who focuses their attention outside of the best interests of the company is not valued and will eventually be compensated for it, in the form of being fired.
What about the c-suite executives? Are the CEO, CFO and COO paid for their time or their attention?
Executives are not paid for their time. Whether they spend 100 hours a week at work or just 20, it does not matter. They are paid for the attention they spend on the strategic future of company. If the Widget Corp board of directors think the CEO is effectively attending to the company, they will keep him and compensate him accordingly. But if he does not attend to the company effectively, the board will find a new CEO.
Back to the Athletes
Michael Jordan, now worth over $2 billion, has made nearly all of his fortune based on the attention he harnesses.
Throughout his NBA career, he made a total of $93M in salary across 15 seasons [4].
Contrast that with the amount he makes on his Nike endorsement alone. In 2019, Jordan made in excess of $130M from his Nike royalties [5].
Michael Jordan makes an outsized amount of money because he attracts outsized attention. People recognize Michael Jordan as one of the best basketball players of all time. Therefore, anything that Michael Jordan says people need in order to play basketball, they will buy.
Jordan worked hard throughout his NBA career. He put an enormous amount of attention and effort into his practice. Jordan had natural ability yes, but it was his extreme focus on becoming the best player that propelled him to glorious heights.
Because of his ability to lead the Chicago Bulls to the championship those six seasons in the 1990s, Jordan had the eyes of NBA fans everywhere locked to the TVs and in seats at the games.
Increase the Value of your Attention
If you are being paid primarily for your attention, take ownership for it. Your boss should not hold your attention hostage in the form of meetings where you are not getting or giving value. Block some time for deep work. It is inexcusable to get to the end of a week without accomplishing your goals because your time (and therefore your attention) has been unnecessarily taken from you.
If you are being paid primarily for your time, increase the value of your attention. Become an expert at something. Experts are respected and eventually compensated appropriately for their attention.
5 Ways to make your attention more valuable at work
- Become a Subject Matter Expert
- Eliminate distractions so you can put focused attention into your work and produce better results
- Set boundaries; know your responsibilities and don’t put them at risk by venturing too far outside your scope
- Learn and understand your organization’s vision and mission, and ensure your work supports those
- Always be Learning. When you stop learning you stop moving forward [6]
Get after it. Live on purpose.
If this interests you, I’d love to hear from you! Schedule a phone call or send me an email.
