In NPR’s Planet Money podcast, Victor Matheson, associate professor of economics at the College of the Holy Cross, commented on LeBron James’ $17.5 million a year salary, pointing out that it is actually far less than he’s worth.
“Yes, LeBron James almost certainly has been extremely underpaid for his entire career,” said Matheson.
Analyzing the economics of the NBA, Matheson helped explain two of the main reasons why its best player is the most underpaid professional athlete in the world today—and why it’s actually a good thing for fans, owners and players, including LeBron himself. In addition to the draft, which eliminates the possibility of a bidding war for the best players, Matheson pointed to the NBA salary cap, which prevents owners from paying him what he’s worth, and instead greatly benefits team owners.
“There’s certainly one big winner in the salary cap system and that’s the owners themselves. By reducing the amount that they have to pay for their labor and to provide their product, they certainly generate significantly higher profits and we see sports teams in the United States be far more profitable than sports teams in Europe, which typically don’t have salary caps.”
This "Holy Cross in the News" item by Kristine Maloney.
