Odds are good that we will see a billion-dollar sports contract within the next decade. It’s really a matter of when, not if. In November 1979, MLB was the first sport to offer the first $1-million annual contract when Nolan Ryan signed with the Houston Astros. Sports contracts grew steadily in the 1980s to a few million. Then everything changed in the ‘90s with broadcast television deals, lucrative endorsement opportunities, insane bonuses, and prize money. Jose Canseco hit it out of the park in 1990 to become baseball’s first $5-million athlete when he signed a five-year, $23.5 million contract with the Oakland Athletics.
Fast forward to today, here are the staggering top three sports contracts of all time:
- Lionel Messi: $673,919,105 for a four-year soccer contract with FC Barcelona
- Patrick Mahomes: $503,000,000 for a 12-year football contract with the Kansas City Chiefs
- Mike Trout: $426,500,000 for a 12-year baseball contract with the Los Angeles Angels
Which sport will bring the next $1bn contract and when?
Let’s set some ground rules: (1) This is for fun. (2) We didn’t add any endorsement money, this is purely for the love of the game. (3) Sports has a passionate following, and we know there’s more data out there factoring in a field of possibilities to reach the billion-dollar milestone. Fundamentally, for any sport to offer such a contract, they would need to provide a high annual salary along with a long-contract period in order for the player to hit the target. To present this in greater detail, we built an interactive tool considering tons of data to predict when each of the sports considered is likely to reach the first billion-dollar contract milestone.
How to use the interactive tool?
Select one of the four sports to start predicting future contract values. The ‘Guiding Factors’ table (on the left) will assist in making reasonable changes to the sliders on the right-hand side. Each slider is associated with a different variable that affects contract values in sports. Any change to any one of the sliders will adjust the Total Contract Value displayed at the bottom.
For each sport, try to predict which year and for what contract length the contract value will reach $1 billion given the inflation% and CAGR%.
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