WEBVTT 00:00:00.000 --> 00:00:04.440 Imagine, you sign a piece of paper for $700 million. 00:00:04.900 --> 00:00:08.160 It is the largest contract in the history of 00:00:08.160 --> 00:00:10.939 North American sports. You are, without a doubt, 00:00:11.199 --> 00:00:14.220 the undisputed king of baseball. But, and this 00:00:14.220 --> 00:00:17.379 is the crazy part, when your first paycheck actually 00:00:17.379 --> 00:00:21.219 arrives, your actual take -home salary for the 00:00:21.219 --> 00:00:24.640 year is roughly the same as, I don't know, a 00:00:24.640 --> 00:00:26.820 backup utility infielder. I mean, it sounds like 00:00:26.820 --> 00:00:28.699 a clerical error. Totally. But it's actually 00:00:28.699 --> 00:00:31.879 one of the most sophisticated financial maneuvers 00:00:31.879 --> 00:00:34.820 in modern sports today. And it completely breaks 00:00:34.939 --> 00:00:37.420 everything we think we know about money. Because 00:00:37.420 --> 00:00:39.899 usually, when we talk about a massive financial 00:00:39.899 --> 00:00:43.359 transaction, there is an expectation of basic 00:00:43.359 --> 00:00:45.619 arithmetic. Right, simple addition and subtraction. 00:00:45.759 --> 00:00:47.259 Exactly. You look at a house listing, it says 00:00:47.259 --> 00:00:49.520 $1 million, you get a mortgage, the bank hands 00:00:49.520 --> 00:00:51.439 over a million dollars, and you get the keys. 00:00:51.799 --> 00:00:54.179 It's clean. You're either paid or not paid. Yeah. 00:00:54.280 --> 00:00:56.020 We like our accounting to be visible. We want 00:00:56.020 --> 00:00:58.679 the price tag to actually be the price. But the 00:00:58.679 --> 00:01:00.659 moment you step into the world of professional 00:01:00.659 --> 00:01:03.579 sports contracts, that simple arithmetic machine 00:01:03.579 --> 00:01:07.579 just entirely explodes. We are looking at a financial 00:01:07.579 --> 00:01:10.379 landscape that is built almost entirely on optical 00:01:10.379 --> 00:01:12.739 illusions. Oh, for sure. And that is exactly 00:01:12.739 --> 00:01:15.439 why we are here today. For this deep dive, we 00:01:15.439 --> 00:01:18.060 are pulling from this massive, heavily cited 00:01:18.060 --> 00:01:21.780 Wikipedia database that details the, quote, list 00:01:21.780 --> 00:01:24.920 of largest sports contracts. And honestly, this 00:01:24.920 --> 00:01:27.530 list is a gold mine. because it forces us to 00:01:27.530 --> 00:01:30.950 look past the shiny press conferences and the 00:01:30.950 --> 00:01:33.129 flashing graphics on the sports networks. Right, 00:01:33.129 --> 00:01:35.689 because our mission for you today is to go way 00:01:35.689 --> 00:01:38.489 beyond those eye -popping, headline -grabbing 00:01:38.489 --> 00:01:41.209 dollar amounts. We want you to understand the 00:01:41.209 --> 00:01:43.590 hidden mechanics, the bizarre caveats, and what 00:01:43.590 --> 00:01:46.209 these astronomical figures actually reveal about 00:01:46.209 --> 00:01:48.629 the cutthroat business of modern sports. It's 00:01:48.629 --> 00:01:50.909 fascinating when you really dig into it. It is. 00:01:51.129 --> 00:01:54.590 So whether you are a die -hard fan who paints 00:01:54.590 --> 00:01:57.109 your face on Sunday, or you're just someone fascinated 00:01:57.109 --> 00:01:59.329 by extreme wealth and high -stakes negotiation, 00:01:59.950 --> 00:02:01.629 this deep dive is going to completely change 00:02:01.629 --> 00:02:04.010 how you read sports headlines. I guarantee it 00:02:04.010 --> 00:02:06.629 will. Okay, let's unpack this. We have to start 00:02:06.629 --> 00:02:10.449 at the absolute ceiling of human compensation, 00:02:10.770 --> 00:02:13.750 just the raw gross totals. Right, the half billion 00:02:13.750 --> 00:02:16.569 dollar club. And to really understand the sheer 00:02:16.569 --> 00:02:18.210 scale of what we're looking at here, we have 00:02:18.210 --> 00:02:20.840 to look at the top four. So, sitting at the very 00:02:20.840 --> 00:02:23.800 top is Juan Soto, who just signed this massive 00:02:23.800 --> 00:02:27.800 15 -year, $765 million deal with the New York 00:02:27.800 --> 00:02:31.300 Mets. $765 million. I actually tried to do the 00:02:31.300 --> 00:02:34.199 math on that earlier. If you made, say, $100 00:02:34.199 --> 00:02:38.259 ,000 a year, it would take you 7 ,650 years to 00:02:38.259 --> 00:02:41.599 earn Juan Soto's contract. Wow. Yeah, it's generational 00:02:41.599 --> 00:02:44.280 wealth created with literally a single signature. 00:02:44.340 --> 00:02:46.819 Yeah. And right behind him is Cristiano Ronaldo 00:02:46.819 --> 00:02:49.979 pulling in $710 million playing for Al Nasser 00:02:49.979 --> 00:02:53.099 in Saudi Arabia. Then you have Shohei Otani at 00:02:53.099 --> 00:02:55.740 $700 million with the Los Angeles Dodgers. And 00:02:55.740 --> 00:02:58.860 Lionel Messi's $674 million deal with Barcelona. 00:02:59.300 --> 00:03:00.860 But you know, as I was reading through the source 00:03:00.860 --> 00:03:03.580 material, I noticed a massive structural bias 00:03:03.580 --> 00:03:05.699 in the data. Well, because I'm looking at these 00:03:05.699 --> 00:03:08.060 four guys, it goes baseball, soccer, baseball, 00:03:08.240 --> 00:03:12.250 soccer. And I just have to ask, where on earth 00:03:12.250 --> 00:03:15.629 are the golfers? Where is Tiger Woods? Or Roger 00:03:15.629 --> 00:03:18.449 Federer in tennis? Or Lewis Hamilton in Formula 00:03:18.449 --> 00:03:21.710 One? Ah, right. Like, if this is a list of the 00:03:21.710 --> 00:03:24.069 wealthiest athletes, it feels like we are looking 00:03:24.069 --> 00:03:27.270 at a corporate salary directory that completely 00:03:27.270 --> 00:03:29.990 ignores everyone's incredibly lucrative side 00:03:29.990 --> 00:03:32.250 hustles. Well, that is exactly what this is. 00:03:32.250 --> 00:03:34.449 And it's a crucial rule from our source material 00:03:34.449 --> 00:03:37.349 that we really have to clarify here. Wikipedia 00:03:37.349 --> 00:03:41.909 is... very strict about how this specific database 00:03:41.909 --> 00:03:44.930 is compiled. These rankings only include officially 00:03:44.930 --> 00:03:47.330 confirmed publicly verifiable playing contracts. 00:03:47.330 --> 00:03:49.789 Okay. They completely exclude team options, buyout 00:03:49.789 --> 00:03:52.210 clauses, and crucially endorsement deals. So 00:03:52.210 --> 00:03:53.969 it's not actually a list of who makes the most 00:03:53.969 --> 00:03:56.050 money. It's a list of who has the most transparent 00:03:56.050 --> 00:03:58.229 employer. Precisely. Think about the mechanics 00:03:58.229 --> 00:04:00.330 of a salary cap sport like the major American 00:04:00.330 --> 00:04:02.830 leagues. They have these strict collective bargaining 00:04:02.830 --> 00:04:04.930 agreements with the players unions. They are 00:04:04.930 --> 00:04:07.069 heavily regulated. Right. So a team like the 00:04:07.069 --> 00:04:10.219 Dodgers or say the Kansas City Chiefs, they have 00:04:10.219 --> 00:04:12.680 to submit their payroll to the league office 00:04:12.680 --> 00:04:15.060 to prove they aren't violating spending limits. 00:04:15.659 --> 00:04:18.139 That creates a public audit trail. Therefore, 00:04:18.620 --> 00:04:21.079 those salaries are very easy to cite for a database. 00:04:21.620 --> 00:04:24.920 But a global individual star like Tiger Woods 00:04:24.920 --> 00:04:27.060 operates in a completely different financial 00:04:27.060 --> 00:04:29.759 ecosystem. Entirely different. I mean, a golfer's 00:04:29.759 --> 00:04:31.920 actual tournament winnings might be just a tiny 00:04:31.920 --> 00:04:34.259 fraction of their total income. They make the 00:04:34.259 --> 00:04:37.100 vast majority of their fortunes on unconfirmed, 00:04:37.459 --> 00:04:40.240 private, endorsement -heavy deals with equipment 00:04:40.240 --> 00:04:42.399 manufacturers and apparel brands. Right, the 00:04:42.399 --> 00:04:45.180 Nike deals, the Rolex deals. Exactly. And a Formula 00:04:45.180 --> 00:04:47.819 One team like Mercedes, they don't have a public 00:04:47.819 --> 00:04:50.139 salary cap in the exact same way, so they don't 00:04:50.139 --> 00:04:52.660 have to publish Lewis Hamilton's exact contractual 00:04:52.660 --> 00:04:55.160 breakdown. What we are really seeing on this 00:04:55.160 --> 00:04:58.000 list is a mirror reflecting how transparent a 00:04:58.000 --> 00:05:00.540 sports financial structure is, rather than a 00:05:00.540 --> 00:05:02.970 perfect ranking of global cash flow. Okay, that 00:05:02.970 --> 00:05:05.250 makes total sense. We are only looking at the 00:05:05.250 --> 00:05:07.149 money that is forced onto the public ledger. 00:05:07.879 --> 00:05:11.060 And this is wild. Even on that ledger, the strategies 00:05:11.060 --> 00:05:13.279 for extracting that money couldn't be more different. 00:05:13.300 --> 00:05:15.519 Oh, absolutely. Because once you get past the 00:05:15.519 --> 00:05:19.439 shock of a $765 million price tag, you have to 00:05:19.439 --> 00:05:21.399 look at how long these athletes actually have 00:05:21.399 --> 00:05:23.980 to work to earn it. It's this tension between 00:05:23.980 --> 00:05:26.959 time and money. And the source reveals two drastically 00:05:26.959 --> 00:05:29.480 different philosophies here. It's essentially 00:05:29.480 --> 00:05:32.800 a massive divide between long -term risk and 00:05:32.800 --> 00:05:35.129 short -term leverage. Right. Let's look at the 00:05:35.129 --> 00:05:37.790 long term risk first. Baseball seems obsessed 00:05:37.790 --> 00:05:40.170 with these marathon contracts, like Juan Soto's 00:05:40.170 --> 00:05:43.189 deal spans 15 years. That takes him from 2025 00:05:43.189 --> 00:05:45.509 all the way to 2039. Yeah, it's a long time. 00:05:45.769 --> 00:05:48.649 And Fernando Tatis Jr. is locked in for 14 years. 00:05:49.069 --> 00:05:51.819 Bryce Harper for 13 years. I just have to question 00:05:51.819 --> 00:05:53.579 the sanity of this from a team's perspective. 00:05:54.000 --> 00:05:55.779 It's like getting married to a volatile tech 00:05:55.779 --> 00:05:58.060 startup and just praying the servers don't crash 00:05:58.060 --> 00:05:59.920 for a decade and a half. That's a great way to 00:05:59.920 --> 00:06:02.300 put it. This is a highly physical sport. Bodies 00:06:02.300 --> 00:06:04.560 break down. What happens if the machinery simply 00:06:04.560 --> 00:06:07.560 stops working in year six? Well, that is the 00:06:07.560 --> 00:06:10.230 multi -million dollar gamble. Teams do it because 00:06:10.230 --> 00:06:13.050 it locks down a superstar through their absolute 00:06:13.050 --> 00:06:15.970 physical prime, and it spreads out the average 00:06:15.970 --> 00:06:18.629 annual cost for tax and luxury cap purposes. 00:06:19.350 --> 00:06:21.290 But your question about the machinery breaking 00:06:21.290 --> 00:06:24.529 down, that is addressed beautifully in a specific 00:06:24.529 --> 00:06:27.089 footnote in the source. Oh, the footnotes on 00:06:27.089 --> 00:06:29.889 this page are incredible. They really are. If 00:06:29.889 --> 00:06:31.449 you scroll down the list, you'll find a picture 00:06:31.449 --> 00:06:34.470 named Stephen Strasburg. He signed a massive 00:06:34.470 --> 00:06:38.529 seven -year, $245 million contract with the Washington 00:06:38.529 --> 00:06:41.829 Nationals. But right next to his name is an asterisk. 00:06:42.750 --> 00:06:45.110 The dreaded asterisk. Exactly. That footnote 00:06:45.110 --> 00:06:47.009 explains that while he is technically still under 00:06:47.009 --> 00:06:49.670 contract, catastrophic injuries entirely ended 00:06:49.670 --> 00:06:51.970 his career. He physically cannot pitch anymore. 00:06:52.089 --> 00:06:54.029 He's officially retired from playing. Wait, let 00:06:54.029 --> 00:06:56.829 me stop you there. He is retired. He isn't throwing 00:06:56.829 --> 00:06:59.329 a single pitch. So the team just voids the contract, 00:06:59.329 --> 00:07:01.290 right? Not in Major League Baseball. The Nationals 00:07:01.290 --> 00:07:03.149 still have to pay him every single cent of that 00:07:03.149 --> 00:07:05.949 $245 million. Right, really? He just gets the 00:07:05.949 --> 00:07:08.029 money? He just gets the money. Yeah. Because 00:07:08.029 --> 00:07:10.370 in baseball, those contracts are fully guaranteed. 00:07:10.750 --> 00:07:13.910 Okay, but... but if Strasburg gets all his money 00:07:13.910 --> 00:07:16.480 to sit at home... Why did I just read the other 00:07:16.480 --> 00:07:18.819 day that some NFL quarterback got cut and lost 00:07:18.819 --> 00:07:22.240 $100 million? Are these contracts not all built 00:07:22.240 --> 00:07:24.259 the same? And this is where the financial optical 00:07:24.259 --> 00:07:26.939 illusions really begin. The divide between the 00:07:26.939 --> 00:07:28.680 different American sports leagues when it comes 00:07:28.680 --> 00:07:31.600 to guaranteed money is incredibly stark. Yeah. 00:07:32.019 --> 00:07:34.439 In Major League Baseball and the NBA, thanks 00:07:34.439 --> 00:07:37.139 to decades of really powerful union negotiations, 00:07:37.939 --> 00:07:40.579 contracts are ironclad. If you sign for $300 00:07:40.579 --> 00:07:43.959 million, barring some catastrophic legal breach 00:07:43.959 --> 00:07:46.279 or criminal act, you are getting $300 million. 00:07:46.959 --> 00:07:49.800 But in the National Football League, contracts 00:07:49.800 --> 00:07:53.259 are famously and brutally. not guaranteed. And 00:07:53.259 --> 00:07:56.279 the source specifically highlights this discrepancy. 00:07:56.339 --> 00:07:58.459 It notes that if an NFL player is cut from the 00:07:58.459 --> 00:08:00.220 roster, maybe they lose a step. Maybe the team 00:08:00.220 --> 00:08:02.139 just wants to draft someone younger or maybe 00:08:02.139 --> 00:08:04.500 they suffer a career ending injury. They do not 00:08:04.500 --> 00:08:06.680 receive the rest of their contracted base salary. 00:08:07.199 --> 00:08:09.899 The team can essentially just walk away. Exactly. 00:08:09.939 --> 00:08:12.420 Yeah. Which is wild because the NFL is the most 00:08:12.420 --> 00:08:15.120 physically dangerous sport on this list with 00:08:15.120 --> 00:08:18.399 a nearly 100 percent injury rate. Yet the players 00:08:18.399 --> 00:08:21.269 have the least financial security. So when you 00:08:21.269 --> 00:08:24.250 look at the Wikipedia list and see say Los Angeles 00:08:24.250 --> 00:08:26.370 Chargers quarterback Justin Herbert sitting there 00:08:26.370 --> 00:08:28.230 with a two hundred sixty two point five million 00:08:28.230 --> 00:08:30.949 dollar contract You really have to read the fine 00:08:30.949 --> 00:08:32.769 print because that two hundred sixty two point 00:08:32.769 --> 00:08:35.950 five million isn't real It's mostly fiction only 00:08:35.950 --> 00:08:37.730 a hundred and thirty three point seven million 00:08:37.730 --> 00:08:39.690 of that contract was fully guaranteed at signing 00:08:39.690 --> 00:08:44.200 Wow the rest of it nearly $130 million is essentially 00:08:44.200 --> 00:08:47.100 a mirage. It's just a series of non -guaranteed 00:08:47.100 --> 00:08:49.179 base salaries in the later years of the deal. 00:08:49.659 --> 00:08:51.639 If he gets seriously hurt or his performance 00:08:51.639 --> 00:08:53.460 drops and the team cuts him, that money just 00:08:53.460 --> 00:08:55.240 vanishes from his future. It doesn't go to him. 00:08:55.299 --> 00:08:57.559 It just becomes freed up salary cap space for 00:08:57.559 --> 00:08:59.679 the team to spend on someone else. Right. And 00:08:59.679 --> 00:09:01.720 the same goes for Patrick Mahomes. He signed 00:09:01.720 --> 00:09:04.720 what was heralded as a staggering $450 million 00:09:04.720 --> 00:09:06.820 10 -year extension. Right. It broke the internet. 00:09:06.919 --> 00:09:09.710 I remember that. But the actual fully guaranteed 00:09:09.710 --> 00:09:12.370 cash at signing was just a fraction of that. 00:09:12.769 --> 00:09:15.169 The top line number is incredible for public 00:09:15.169 --> 00:09:16.889 relations. You know, it makes the player look 00:09:16.889 --> 00:09:19.129 like a king and the team look committed. But 00:09:19.129 --> 00:09:21.950 the underlying financial reality is entirely 00:09:21.950 --> 00:09:24.250 different. But even that NFL accounting sleight 00:09:24.250 --> 00:09:27.049 of hand absolutely pales in comparison to what 00:09:27.049 --> 00:09:29.710 Shohei Otani pulled off. This is the guy I mentioned 00:09:29.710 --> 00:09:32.769 at the very beginning. Ah, yes. The seven hundred 00:09:32.769 --> 00:09:34.809 million dollar man. I need you to break down 00:09:34.809 --> 00:09:36.870 the mechanics of this because it feels like it 00:09:36.870 --> 00:09:39.370 shouldn't be legal. He signed the largest total 00:09:39.370 --> 00:09:41.909 contract in the history of American sports. Seven 00:09:41.909 --> 00:09:44.210 hundred million dollars. But you're telling me 00:09:44.210 --> 00:09:46.750 he is practically living on a rookie's allowance 00:09:46.750 --> 00:09:49.750 right now. What's fascinating here is the sheer 00:09:49.750 --> 00:09:52.809 unprecedented scale of the deferrals. A deferral 00:09:52.809 --> 00:09:55.409 is exactly what it sounds like. Agreeing to do 00:09:55.409 --> 00:09:57.169 the work today but getting paid for it years 00:09:57.169 --> 00:09:59.929 in the future. Otani signed a 10 year contract 00:09:59.929 --> 00:10:02.750 for seven hundred million dollars. But he agreed 00:10:02.750 --> 00:10:06.820 to defer. $680 million of it. So wait, for the 00:10:06.820 --> 00:10:09.440 next 10 years, while he is actually playing baseball 00:10:09.440 --> 00:10:12.019 for the Dodgers, hitting home runs, selling out 00:10:12.019 --> 00:10:15.559 stadiums, he is only being paid $2 million a 00:10:15.559 --> 00:10:17.960 year. That is his exact take -home salary from 00:10:17.960 --> 00:10:21.879 the team. $2 million a year. The remaining $680 00:10:21.879 --> 00:10:25.120 million sits untouched and will be paid out to 00:10:25.120 --> 00:10:29.240 him at $68 million a year for the 10 years after 00:10:29.240 --> 00:10:31.980 his playing contract expires, long after he is 00:10:31.980 --> 00:10:34.559 likely retired. Why on earth would anyone agree 00:10:34.559 --> 00:10:36.759 to that? Why not just take the $70 million a 00:10:36.759 --> 00:10:39.519 year right now? Two reasons. First, competitive 00:10:39.519 --> 00:10:42.720 advantage. By only taking $2 million a year now, 00:10:42.899 --> 00:10:44.840 Otani dramatically lowers the Dodgers' current 00:10:44.840 --> 00:10:47.340 official payroll. That gives the team massive 00:10:47.340 --> 00:10:50.120 financial flexibility to go out and sign other 00:10:50.120 --> 00:10:52.159 superstar players to help him win championships 00:10:52.159 --> 00:10:54.820 today. So he's essentially subsidizing his own 00:10:54.820 --> 00:10:57.320 teammates. Exactly, yes. But the second reason 00:10:57.320 --> 00:10:59.460 is the hidden cost of the deal, which is something 00:10:59.460 --> 00:11:01.860 called the time value of money. Right. And for 00:11:01.860 --> 00:11:03.720 the listener who isn't, you know, a forensic 00:11:03.720 --> 00:11:05.559 accountant, what does that actually mean for 00:11:05.559 --> 00:11:08.840 Otani's wallet? It's the basic economic principle 00:11:08.840 --> 00:11:12.000 that a dollar today is worth more than a dollar 00:11:12.000 --> 00:11:15.159 tomorrow. Because of inflation and the fact that 00:11:15.159 --> 00:11:16.980 you could be investing that money right now to 00:11:16.980 --> 00:11:20.259 earn interest, $68 million paid out in the year 00:11:20.259 --> 00:11:23.179 2034 is going to buy significantly less than 00:11:23.179 --> 00:11:25.620 $68 million paid out today. It's like trying 00:11:25.620 --> 00:11:29.039 to buy a house in 2024 using a salary from 1990. 00:11:29.320 --> 00:11:31.539 The purchasing power just evaporates over time. 00:11:31.779 --> 00:11:34.039 Exactly. So while the headline screams seven 00:11:34.039 --> 00:11:36.840 hundred million dollars, financial experts and 00:11:36.840 --> 00:11:39.259 the league itself calculate the true present 00:11:39.259 --> 00:11:42.080 day value of that contract to be closer to four 00:11:42.080 --> 00:11:44.440 hundred and sixty million dollars. He essentially 00:11:44.440 --> 00:11:48.120 gave the Dodgers a massive interest free loan. 00:11:48.250 --> 00:11:50.789 Which totally proves the point. The total number 00:11:50.789 --> 00:11:52.690 on the Wikipedia list is functionally meaningless 00:11:52.690 --> 00:11:55.169 without the context. If the yearly totals are 00:11:55.169 --> 00:11:57.889 skewed by deferrals, like with Otani, and they're 00:11:57.889 --> 00:11:59.789 skewed by a lack of guarantees, like with Mahomes 00:11:59.789 --> 00:12:02.169 and Herbert, the only true way to measure this 00:12:02.169 --> 00:12:04.070 wealth is to break it down to the micro level. 00:12:04.190 --> 00:12:06.649 We have to look at how much they make every single 00:12:06.649 --> 00:12:08.769 time they clock in for work, the per game breakdown. 00:12:09.129 --> 00:12:12.070 And this is where the math goes from merely large 00:12:12.070 --> 00:12:15.559 to completely astronomical. because to find the 00:12:15.559 --> 00:12:17.879 real value, you have to divide the yearly salary 00:12:17.879 --> 00:12:20.480 by the frequency of the events. And this flips 00:12:20.480 --> 00:12:23.509 the entire Wikipedia list upside down. Baseball 00:12:23.509 --> 00:12:26.049 players who dominate the top of the total contract 00:12:26.049 --> 00:12:28.389 list actually drop dramatically in this metric 00:12:28.389 --> 00:12:30.190 because of their grueling schedule. They play 00:12:30.190 --> 00:12:32.269 a lot of games. They play 100 and 162 regular 00:12:32.269 --> 00:12:35.529 season games a year. So Juan Soto, with his record 00:12:35.529 --> 00:12:39.690 -breaking $765 million deal, makes about $51 00:12:39.690 --> 00:12:43.009 million a year, divide that by 162, and he makes 00:12:43.009 --> 00:12:49.230 a relatively, uh... modest $314 ,814 per game. 00:12:49.590 --> 00:12:51.710 Which obviously is a staggering amount of money 00:12:51.710 --> 00:12:54.090 for roughly three hours of work. But compared 00:12:54.090 --> 00:12:56.009 to his peers in other sports, it's just a fraction 00:12:56.009 --> 00:12:57.830 of the per event payout. Because then you look 00:12:57.830 --> 00:13:00.210 at NFL quarterbacks, they only play 17 regular 00:13:00.210 --> 00:13:02.549 season games. Suddenly, Patrick Mahomes leaps 00:13:02.549 --> 00:13:05.870 up to about $2 .4 million per game. Joe Burrow 00:13:05.870 --> 00:13:09.190 makes over $3 .2 million every single time he 00:13:09.190 --> 00:13:11.110 steps onto the field. If you look at individual 00:13:11.110 --> 00:13:14.070 racing, Max Verstappen makes roughly $2 .5 million 00:13:14.070 --> 00:13:15.779 every— every time he straps into his red bull 00:13:15.779 --> 00:13:18.720 car for a Formula One race. But even Verstappen 00:13:18.720 --> 00:13:20.320 looks like he's working for minimum wage when 00:13:20.320 --> 00:13:22.600 you get to the absolute extremes of this list. 00:13:22.779 --> 00:13:24.419 We are talking about the sprinters we mentioned 00:13:24.419 --> 00:13:27.220 earlier. Cristiano Ronaldo's two -year deal with 00:13:27.220 --> 00:13:30.480 Al Nassour breaks down to an estimated $9 .4 00:13:30.480 --> 00:13:33.659 million per soccer match. Almost $10 million 00:13:33.659 --> 00:13:35.720 every single time the referee blows the whistle. 00:13:36.059 --> 00:13:38.600 But the absolute peak of the per event mountain 00:13:38.600 --> 00:13:42.740 belongs to boxing. Canelo Alvarez. According 00:13:42.740 --> 00:13:46.000 to the source, he signed a five -fight broadcast 00:13:46.000 --> 00:13:50.480 deal with the streaming service DAZN for $365 00:13:50.480 --> 00:13:54.139 million. That breaks down to an absolutely mind 00:13:54.139 --> 00:13:57.460 -bending $33 .1 million per fight. For a fight 00:13:57.460 --> 00:14:00.000 that is scheduled for a maximum of 12 three -minute 00:14:00.000 --> 00:14:02.899 rounds. It's incomprehensible. That is 36 minutes 00:14:02.899 --> 00:14:05.100 of actual physical labor. It's like getting paid 00:14:05.100 --> 00:14:07.580 the equivalent of an entire Hollywood blockbuster's 00:14:07.580 --> 00:14:09.320 production budget just for stepping into a ring 00:14:09.320 --> 00:14:11.419 for half an hour. How does a streaming service 00:14:11.419 --> 00:14:13.490 even generate enough revenue to justify paying 00:14:13.490 --> 00:14:16.929 one man $33 million for one night. Well, it comes 00:14:16.929 --> 00:14:18.590 down to the disruption of the pay -per -view 00:14:18.590 --> 00:14:22.049 model. DAZN was trying to corner the global market 00:14:22.049 --> 00:14:25.169 on combat sports by offering a subscription model 00:14:25.169 --> 00:14:28.330 rather than a one -off pay -per -view fee. They 00:14:28.330 --> 00:14:31.129 desperately needed a marquee subscriber magnet, 00:14:31.769 --> 00:14:33.690 and Cannella was the biggest draw in the sport. 00:14:33.960 --> 00:14:35.799 They weren't just paying for his boxing. They 00:14:35.799 --> 00:14:39.259 were acquiring his entire global fan base as 00:14:39.259 --> 00:14:41.580 monthly subscribers So his contract wasn't a 00:14:41.580 --> 00:14:43.919 salary. It was a customer acquisition cost for 00:14:43.919 --> 00:14:47.470 a tech company exactly But to accurately calculate 00:14:47.470 --> 00:14:49.570 these numbers, to really understand these deals, 00:14:49.990 --> 00:14:52.289 you have to read the deeply buried fine print 00:14:52.289 --> 00:14:55.110 about what actually constitutes a game, a season 00:14:55.110 --> 00:14:57.830 or a bonus. And that brings us to the final and 00:14:57.830 --> 00:14:59.710 frankly, the wildest set of footnotes on this 00:14:59.710 --> 00:15:02.210 Wikipedia page, because the invisible variables 00:15:02.210 --> 00:15:04.309 in these contracts are where the real business 00:15:04.309 --> 00:15:06.590 is done. Oh, the fine print is an absolute gold 00:15:06.590 --> 00:15:08.690 mine. Let's talk about Julio Rodriguez. He's 00:15:08.690 --> 00:15:10.710 this young star for the Seattle Mariners and 00:15:10.710 --> 00:15:13.610 his contract is a labyrinth. The base guarantee 00:15:13.610 --> 00:15:18.250 is $209 .3 million, which is massive on its own. 00:15:18.570 --> 00:15:21.370 But the source outlines that this contract has 00:15:21.370 --> 00:15:23.789 escalators that can push the total value all 00:15:23.789 --> 00:15:27.769 the way up to $350 million. But those escalators 00:15:27.769 --> 00:15:29.929 aren't based simply on him hitting a certain 00:15:29.929 --> 00:15:32.649 number of home runs or stealing bases. No, they 00:15:32.649 --> 00:15:35.289 are tied to external voting. The contract value 00:15:35.289 --> 00:15:38.570 increases based on him winning MVP votes and 00:15:38.570 --> 00:15:41.059 silver slugger selections. And for the listener, 00:15:41.500 --> 00:15:43.820 a silver slugger is an award given to the best 00:15:43.820 --> 00:15:46.360 offensive player at each position, and it's voted 00:15:46.360 --> 00:15:49.700 on by opposing managers and coaches. MVP is voted 00:15:49.700 --> 00:15:52.600 on by the media. So Julio Rodriguez's future 00:15:52.600 --> 00:15:55.299 earning potential, a swing of nearly $150 million, 00:15:55.899 --> 00:15:58.620 isn't just based on his raw statistics. It's 00:15:58.620 --> 00:16:00.980 based on the subjective opinions of sports writers 00:16:00.980 --> 00:16:03.659 and rival coaches who cast those ballots. Just 00:16:03.659 --> 00:16:05.960 think about the pressure of that. Your generational 00:16:05.960 --> 00:16:08.879 wealth is literally tied to a popularity contest 00:16:08.879 --> 00:16:10.639 governed by by people who do not work for your 00:16:10.639 --> 00:16:12.940 team. You better be incredibly nice to the local 00:16:12.940 --> 00:16:14.899 beat reporters. Seriously. And then there's the 00:16:14.899 --> 00:16:17.879 David Beckham illusion. This one completely shifted 00:16:17.879 --> 00:16:20.580 how I view sports contracts. When Beckham came 00:16:20.580 --> 00:16:22.840 to the United States to play for the LA Galaxy, 00:16:23.539 --> 00:16:28.340 his famous $251 million MLS contract was publicized 00:16:28.340 --> 00:16:31.179 everywhere. It was breaking news on every network 00:16:31.179 --> 00:16:33.700 around the globe. But the footnote on this list 00:16:33.700 --> 00:16:36.259 reveals a massive catch. The base salary was 00:16:36.259 --> 00:16:38.759 basically a rounding error. Right. Out of that 00:16:38.759 --> 00:16:43.159 supposed $251 million, only $5 million a year 00:16:43.159 --> 00:16:46.120 was his actual club salary playing soccer. The 00:16:46.120 --> 00:16:48.860 rest was an absolute master class in modern sports 00:16:48.860 --> 00:16:52.200 business. The bulk of that $251 million came 00:16:52.200 --> 00:16:54.899 from heavily negotiated, pre -existing commercial 00:16:54.899 --> 00:16:57.620 endorsements, a cut of all team jersey sales, 00:16:58.120 --> 00:17:00.240 a cut of ticket sales, and most importantly, 00:17:00.500 --> 00:17:02.830 a profit sharing agreement. Right. Beckham didn't 00:17:02.830 --> 00:17:04.490 just sign up to be an employee of the league. 00:17:04.730 --> 00:17:07.369 He negotiated a contract that allowed him to 00:17:07.369 --> 00:17:09.470 essentially buy into the revenue stream of the 00:17:09.470 --> 00:17:11.670 entire franchise, which included an option to 00:17:11.670 --> 00:17:13.890 purchase his own expansion team later on, which 00:17:13.890 --> 00:17:16.029 he did with Inner Miami. Which completely proves 00:17:16.029 --> 00:17:18.089 the point that these top tier athletes aren't 00:17:18.089 --> 00:17:20.170 just athletes anymore. They're moving economies. 00:17:20.589 --> 00:17:23.210 If we connect this to the bigger picture, the 00:17:23.210 --> 00:17:25.349 evolution we are seeing on this Wikipedia list 00:17:25.349 --> 00:17:28.180 is profound. These aren't employment contracts 00:17:28.180 --> 00:17:30.180 offering a fixed salary for services rendered 00:17:30.180 --> 00:17:32.519 anymore. They are highly conditioned corporate 00:17:32.519 --> 00:17:35.519 mergers. Yeah. When an athlete of this caliber 00:17:35.519 --> 00:17:38.140 signs, they are tying their personal corporate 00:17:38.140 --> 00:17:41.539 brand to a franchise's infrastructure, with payouts 00:17:41.539 --> 00:17:44.440 dependent on complex performance metrics, streaming 00:17:44.440 --> 00:17:48.680 rights, and crucially, tax geography. Yes. We 00:17:48.680 --> 00:17:50.880 cannot overlook the tax footnote. This might 00:17:50.880 --> 00:17:53.680 be the single most important detail in the entire 00:17:53.680 --> 00:17:56.160 database. It completely reframes all the data. 00:17:56.250 --> 00:17:58.430 The source explicitly notes that these figures 00:17:58.430 --> 00:18:01.349 are presented at face value. However, European 00:18:01.349 --> 00:18:03.710 sports contracts, like those massive deals in 00:18:03.710 --> 00:18:05.809 the Premier League or La Liga, are typically 00:18:05.809 --> 00:18:08.150 negotiated and quoted to the press on a post 00:18:08.150 --> 00:18:10.789 -tax basis. Meaning the number reported in the 00:18:10.789 --> 00:18:12.750 media is the actual cash the player takes home 00:18:12.750 --> 00:18:14.910 and puts in the bank after the government has 00:18:14.910 --> 00:18:17.789 already taken its cut. Whereas, American contracts 00:18:17.789 --> 00:18:21.069 are entirely pre -tax. So when Juan Soto signs 00:18:21.069 --> 00:18:24.789 for an average of $51 million a year in New York, 00:18:25.150 --> 00:18:28.549 he is paying massive federal income taxes, New 00:18:28.549 --> 00:18:31.710 York state taxes, and New York City taxes out 00:18:31.710 --> 00:18:34.130 of that chunk. By the time it hits his bank account, 00:18:34.170 --> 00:18:37.069 he is taking home roughly half of the advertised 00:18:37.069 --> 00:18:39.750 number. Precisely. It's an apples to oranges 00:18:39.750 --> 00:18:43.390 comparison that wildly distorts the reality of 00:18:43.390 --> 00:18:46.539 global wealth and sports. $50 million contract 00:18:46.539 --> 00:18:49.559 in Spain means $50 million in your pocket. A 00:18:49.559 --> 00:18:52.240 $50 million contract in California means maybe 00:18:52.240 --> 00:18:54.779 $25 million in your pocket. So as we wrap up 00:18:54.779 --> 00:18:56.440 this deep dive, let's bring it back to you, the 00:18:56.440 --> 00:18:58.299 listener. The next time a sports app lights up 00:18:58.299 --> 00:19:00.779 your phone with a breaking news alert about a 00:19:00.779 --> 00:19:03.200 record breaking half a billion dollar contract, 00:19:03.539 --> 00:19:05.519 you now have the toolkit to decode it. You know, 00:19:05.519 --> 00:19:07.759 to look past the giant font. Right. Instead of 00:19:07.759 --> 00:19:09.619 just gasping at the top line number, you're going 00:19:09.619 --> 00:19:11.579 to immediately look for the deferrals. You're 00:19:11.579 --> 00:19:13.380 going to ask if the money is actually guaranteed 00:19:13.380 --> 00:19:16.359 or if it's NFL monopoly money. You're going to 00:19:16.359 --> 00:19:18.380 wonder about the subjective voting escalators, 00:19:18.460 --> 00:19:20.660 the opt outs and the profit sharing agreements 00:19:20.660 --> 00:19:22.960 buried in the fine print. Because the headline 00:19:22.960 --> 00:19:25.779 is just the marketing. The footnotes are the 00:19:25.779 --> 00:19:28.970 actual business. And this raises a really important 00:19:28.970 --> 00:19:31.369 question, a final thought to mull over, based 00:19:31.369 --> 00:19:33.470 on that critical tax distinction we just discussed. 00:19:33.690 --> 00:19:35.930 What's that? Well, if European soccer contracts, 00:19:36.210 --> 00:19:38.549 like the massive global deals for Messi and Ronaldo, 00:19:38.650 --> 00:19:41.029 are often negotiated and reported post -tax, 00:19:41.150 --> 00:19:43.650 and American mega deals like Soto's are strictly 00:19:43.650 --> 00:19:46.930 pre -tax, then the actual real world take -home 00:19:46.930 --> 00:19:49.849 pay gap between global soccer superstars and 00:19:49.849 --> 00:19:52.490 American athletes is drastically wider than this 00:19:52.490 --> 00:19:55.130 Wikipedia list even implies. Oh, wow. It's a 00:19:55.130 --> 00:19:57.559 completely different strat— of wealth. It really 00:19:57.559 --> 00:20:01.000 is. And it forces us to wonder. As sports become 00:20:01.000 --> 00:20:03.539 increasingly globalized and billionaire owners 00:20:03.539 --> 00:20:05.759 compete across borders for the ultimate athletic 00:20:05.759 --> 00:20:08.079 talent, how will American leagues ever truly 00:20:08.079 --> 00:20:10.559 compete when global soccer money is fundamentally 00:20:10.559 --> 00:20:13.000 playing by a completely different set of mathematical 00:20:13.000 --> 00:20:16.250 rules? That is a fascinating reality check. The 00:20:16.250 --> 00:20:18.470 scoreboard isn't just broken, it's displaying 00:20:18.470 --> 00:20:20.509 two different currencies without even bothering 00:20:20.509 --> 00:20:23.250 to tell us. So the next time you see those zeros 00:20:23.250 --> 00:20:26.289 flying across the ticker, just remember, it might 00:20:26.289 --> 00:20:28.569 look like a simple math equation, but the real 00:20:28.569 --> 00:20:30.809 game is being played entirely in the fine print.