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Sunday, September 20, 2009

Nerd or Athlete? Not even close economically

This is from The Liberal Order:

"If this data is correct, the probability of a high school athlete making it to the professional level is about 1 in 12,000.... Baseball offers the most lucrative potential as well as the likelihood of having the longest career. But even that is estimated to be just three years for MLB. Doing the math, and discounting $400,000 per year for three years, beginning at age 17 and entering the big leagues at age 21 (not likely), the expected value of a career in baseball is about $86. Who's likely to pursue that?

"Now, certainly it's not the average high school athlete who considers himself pro material, but It's still predominantly those with low opportunity costs of their time that pursue the professional athlete track. Even if we changed it so that a high school athlete was ten times more likely to make it to the professional level, the expected value is only about $860. That is total, not per year. "

But it gets worse. There are some claims that 78% of NFL players (i.e. the ones that buck the odds and make it) declare bankruptcy within two years of retirement.

You want be able to support yourself? Study hard, work hard, show up on time. Keep in shape and play sports, but do it for fun.

Luckily, this was not a choice for me. Although I was on cross-country, track, and basketball teams in high school, it was very, very clear that there was no possible hope of making a living this way. I'm probably one of the few people who didn't try out for the varsity basketball team their senior year so basketball wouldn't interfere with the debate team.


  1. Anonymous2:43 PM

    Notwithstanding that the main conclusion is probably correct, this analysis seems a little off to me. A little digging showed that the average career length in the MLB is much longer than 3 years (more like ~6-7 years). Also, I don't know where the $400,000 figure comes from, the data I dug up indicates a median salary of around $1 million for the MLB. This seems to fall within the 10x fudge factor, however, the super-stars who earn outrageous amounts throw this off. About 1 in 10 MLB players make more than $10 million a year, that alone roughly doubles the expected value calculation and puts it above the $860 estimate.

    Overall, there's just too much sloppiness and too many holes in this analysis to be able to take it very seriously.

  2. 1. I'm just quoting another post, but you seem to be correct.

    2. The $400,000 is the major league minimum. But why would one use the minimum as the expected salary?

    3. For a position player, you seem to be right with 6-7 in the recent era.
    Pitchers seem to have shorter careers, but I didn't see actual numbers there.

    4. So, if we assume 2.5x as high a salary and 2.5x as long a career, we get a higher expectation, but still below $8,000. Compare that to the expected increase in income from studying math 2 hours a day in season!