Andrew Heathcote Rich Lists editor

Andrew is BRW's Rich lists editor and is responsible for the Rich 200 and Young Rich flagship issues. He also reports on matters relating to wealth and investment for BRW and The Australian Financial Review.

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Race to the top

Published 02 December 2010 05:00, Updated 20 December 2010 09:31

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There is a dizzy appeal to becoming rich from sport. As the BRW Top 50 Sports Earners list shows, there are plenty of people who are living the dream but making it happen is not easy. To help budding sportspeople (and pushy parents) identify the most lucrative opportunities, BRW has developed five top tips for making money from sport.

One: Be born male. It doesn’t pay to be female if you want to get rich from sport. Just one woman, Samantha Stosur, made it onto the list this year. Since 2004, there have been no more than two women appearing among the top 50 sports earners in any one year.

Tennis and golf historically have been the best options for women but even our best female golfers couldn’t make this year’s list. It took a world number six tennis ranking for Stosur to take her place. Stosur had an excellent 2010. Her best result was reaching the final of the French Open. Despite her high profile, she still makes less money than several male sportspeople, such as motorbike rider Chad Reed, who are not as well known in Australia.

Men dominate the top spots. New number one Mark Webber had a breakthrough year in 2010. The formula one driver won four races for his Red Bull team and just missed out on winning the drivers’ championship.

Close behind Webber is Australia’s best basketballer, Andrew Bogut, who continues to improve his standing in the US National Basketball Association.

Former top sports earner Greg Norman has been removed from the list this year to reflect the continual slowdown in his playing commitments. Norman still makes millions but almost all of his money comes from property development and other business deals.

As a side note, any men eyeing opportunities in women’s sport should beware. In October, the Ladies Professional Golf Association banned transgender golfer Lana Lawless from competing because she was not born female.

Two: Go abroad. The sports earners list is mostly made up of overseas-based athletes. Most make their money in the US. An examination of the sports earners list in isolation would suggest it is imperative to board an international flight if you want to make money from sport but there are risks to consider.

While our top sports earners are based overseas, there are many more people making good money in Australia. Consider Australian Rules footballers. In 2009, there were 483 players in the Australian Football League making more than $100,000 and 314 making more than $200,000. (The average wage for an AFL player is $221,482.) Generous salaries are also being paid to most professional rugby league, rugby union and soccer players.

Many overseas sporting salaries will bottom out at about $1 million. Grant Balfour is making more than $2 million to play baseball in the US and Matt McBriar is making more than $1 million a year to play American football. It sounds great but should they lose their major league contracts, they may be facing desk jobs.

Apart from the extra travel and accommodation expenses for overseas athletes, there is also currency risk; US-based sports people suffered a fall in their salary this year because of the depreciation of the US dollar in Australian dollar terms.

Some overseas-based sportspeople, such as racing driver Marcos Ambrose, have significant expenses deducted from their gross earnings.

Many promising junior athletes will face the choice between risking it all and seeking millions overseas or staying at home and becoming one of the hundreds of athletes making a better than average income. It is a difficult decision. Get it right and you’ll set yourself up for life but get it wrong and you’ll be pushing pens in no time.

Three: Start young. There’s no point wasting your early years if you want to make money from sport. The world’s most famous golfer, Tiger Woods, could adeptly swing a club by the age of two. Most Australian sportspeople start later but very few reach adulthood without already being on the cusp of breaking into the elite level of their chosen sport.

Take Australia’s last great male tennis player, Lleyton Hewitt. Hewitt won his first professional title at 16 and was the number one player in the world by the age of 20. Australia’s highest-paid cricketer, Ricky Ponting, made his first-class debut for Tasmania when he was 17 and Michael Clarke was only 18 when he debuted for the NSW cricket team.

Despite the benefits, young people often have to make big sacrifices to make it to the top. Sydney-born Harry Kewell moved to England when he was 15 to chase his dream of becoming a professional soccer player. He now finds himself playing for Galatasaray in Turkey as a 32-year-old.

There are fewer demands on golfers to start young because of the length of their careers. Forty-seven-year-old professional golfer Steve Elkington, who first won an event on the main American tour in 1990, made $1.1 million in 2010. His best result came when he finished fifth at the PGA Championship in August. And appropriately named Peter Senior is in his 50s but still made $1.1 million by playing in seniors’ golf tournaments.

Two highly paid American footballers provide an exception to the start young rule. Ben Graham and Saverio Rocca both won lucrative contracts in the US National Football League as punters after completing lengthy careers in the Australian Football League.

Four: Stick to the basics. You won’t find any ping-pong players, karate experts or rhythmic gymnasts on the top sports earners list. Thirteen sports are represented in total but golf dominates. Eighteen of the top 50 were golfers in 2009 and 13 in 2010.

The sheer number of golfers making millions ensures that golf stands apart from all others in terms of its earning potential. Salaries are high and careers can last many years. Anyone looking for a sport to get rich from should look no further.

Tennis and golf have often been thought to be similar for their money-making potential but golf provides rich rewards to more people. The 100th ranked male tennis player on the ATP Tour made $325,000 in prizemoney in 2010 while the 100th ranked golfer on the American PGA Tour made about three times as much ($980,000). Elkington earned a spot on this year’s top 50 sports earners list despite finishing outside the top 100 on the PGA Tour (he finished in 104th place).

You don’t even have to play in the main events to earn good money. The best placed finisher on the Nationwide Tour in the US (for golfers who don’t qualify for the PGA Tour) earned almost half a million dollars and Australian Brendan Jones made about $900,000 on the Japanese golf tour in 2010.

The number of sports on the list swells when motor sport is broken down into sub-categories. Webber drives formula one cars while Ambrose makes his money in American NASCAR. Ryan Briscoe had a good year driving Indy Cars and a few others ride motorbikes (Casey Stoner in MotoGP and Reed in motocross).

Neil Robertson is a standout this year. He makes his debut on the list after winning the World Snooker Championship in May.

Snooker is not normally considered a big money maker but it is lucrative in Britain where Robertson is based. Valuable sponsorship is also on offer, particularly for marketable commodities such as 28-year-old Robertson.

Five: Get a good manager. Professional athletes turn to managers to “show me the money”. The role of a manager in negotiating contracts with teams and sponsors is crucial to maximising income.

Hewitt made most of his money in 2010 from sponsorship arrangements and Bogut gets about $1 million a year from apparel giant Nike.

In surfing, good advice makes a big difference as prizemoney accounts for a small proportion of surfers’ total incomes.

With one event to go, Australia’s top-ranked surfer and world number three, Mick Fanning, won about $170,000 this year. The appeal of surfing culture permeates beyond the sport and this increases the value of surfing identities to clothing sponsors.

The importance of a good manager rose during the GFC. Surfer Taj Burrow believes his long-term sponsorship deal would have been worth much less had it been signed after the crisis hit rather than just before.

When equal becomes unequal

Critics and proponents of equal pay in sport often miss the point. The big divide in pay between men and women in professional sport is unarguable and aptly proven by the lack of women on the top 50 sports earners list.

Tennis is one of the few sports in which women can make big money. In January, an equal number of men and women will compete for equal money at the Australian Open. The women’s singles winner will receive the same amount as the men’s singles winner ($2.1 million).

Organisers of events have been lauded for lifting prize money in women’s tennis. Some people argue that it should reflect equal pay advancement in other sectors. But others claim men deserve more because they work harder (men’s events at grand slam tournaments are best of five sets while women’s matches are best of three).

Both groups are wrong.

Labour in professional sport is a unique commodity. Running around a tennis court in the hot summer sun for two weeks may be hard work but it hardly entitles someone to be paid more than $2 million in and of itself.

Male and female office workers doing the same job deserve the same pay. This is obvious because their work has the same outcome. But tennis players are not like lawyers, accountants or most other wage slaves.

Tennis players are entertainers. They are paid not for how hard they work but for how much revenue they generate at the turnstiles and through broadcast deals.

It would seem a fluke that men and women tennis players generate exactly the same amount of money. Equal pay sounds great but it runs the risk of looking like a public relations stunt. If officials want to introduce equality, they should base an individual’s pay on the revenue they generate. Anything less leads to unequal outcomes.

Top 50 sports earners

RankNameSportGross salary $m
1 Mark Webber  Motor sport 13.4
2 Andrew Bogut Basketball 12.6
3 Chad Reed Motor sport 7.5
4 Casey Stoner Motor sport 6.8
5 Tim Cahill Soccer 4.2
6 Marcos Ambrose Motor sport 4.2
7 Adam Scott Golf 4.1
8 Ricky Ponting Cricket 3.9
9 Robert Allenby Golf 3.6
10 Harry Kewell Soccer 3.5

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