The real deal
Market analysis reveals sports' most overvalued and undervalued assets
- Dan Saelinger for ESPN The MagazineIf your franchise needs revitalizing, invest in a rookie or take a chance on a new GM.
This story appears in the May 14 Money Issue of ESPN The Magazine. Subscribe today!
1. ROOKIESImagine if tech companies imposed a restrictive scale on their most brilliant coders (Mark Zuckerberg) coming out of college while also colluding to bar them from starting their own companies (Facebook). That's how leagues, drafts and collective bargaining agreements constrain pro rookies. Over the course of their first contracts, pros can't make anywhere near what they'd earn if they could sell their services to the highest bidder. What a bonanza for owners. Economists call the difference between a worker's performance and his compensation his surplus value, and rookies produce massive surplus value. Not only cheap to employ, they almost always play longer, improve more and create more wins for their teams than older guys. Even top MLB draftees' hefty-seeming signing bonuses cost only $228 million last year -- just 3.2 percent of total team revenues. Next time everybody scoffs at a ginormous rookie contract, remember that guy is years away from having the full freedom to bargain, as a free agent has. How can he possibly be overpaid? -- Peter Keating
2. DANICA AND DALE JR.
NASCAR DRIVERS Danica Patrick and Dale Earnhardt Jr. haven't won a major race in four years. Not that the sponsors who write the big checks should care. And: They don't. "Of course I want to win races, but we're winning either way," says Bob Parsons, founder and executive chairman of GoDaddy.com, Patrick's primary sponsor since 2006. -- Ryan McGee
- $41 million: What it would cost PepsiCo and the National Guard, Earnhardt's sponsors, for the 15 hours in TV time his car spent on the screen during races in 2011.
- $18 million: How much they paid to sponsor his car.
- 37 minutes, 26 seconds: Minutes Patrick's GoDaddy car was on-screen during the Daytona 500.
- $11.8 million: What it would cost for that much TV exposure.
- 25 percent to 54 percent: Increase in GoDaddy's market share in the seven years since it signed Patrick.Source: Joyce Julius & ASSOC.
3. NFL VETERANS SIGNED RIGHT NOWOverpriced, overpaid free agents often push NFL teams over the salary cap. But here's a stunning reality check: Any free agent (think QB Matt Schaub or WR Greg Jennings) locked down this summer will be a relative steal. That's because next year, for the first time in NFL history, the league will impose a salary floor that will require each team to spend, on average, 89 percent of the cap annually on players; teams in violation could lose draft picks and incur up to a $6.5 million fine. Can you say gold rush? Last year, sans floor, teams like the Chiefs and Jaguars were some $30 million under their caps, and about a third of the league would've needed to spend significantly more to reach the new floor. You're already seeing the signs of looser wallets, as teams that spent way less in the past, like the Bills and Bucs, have started doling out contracts in an attempt to avoid getting penalized down the road. Tampa Bay spent $93 million on payroll last season, for example, then ponied up $103 million to Vincent Jackson and Carl Nicks alone this offseason. Mario Williams became the NFL's second $100 million defensive player in a five-year deal with the Bills, whose 2011 payroll was about $30 million under the cap. So a piece of advice to teams eyeing the new salary cap. Do everything you can to negotiate with upcoming free agents sooner rather than later, as the Eagles are doing with RB LeSean McCoy. You never want to be the last miner to a gold rush. -- Alyssa Roenigk
4. MOST EVERY MLB GMBoston's hiring of Theo Epstein as GM in the fall of 2002 was viewed as something of a gamble, even by club executives. Yet nine seasons later, two of which ended with the team's winning the World Series, Epstein's work proved to be worth tens of millions of dollars to the Red Sox. And when Cubs owner Tom Ricketts brought Epstein to Chicago to shape the future of his franchise, the acquisition cost $3 million to $4 million annually, or about what outfielder Alfonso Soriano makes in a month. Epstein isn't the only bargain GM. "Our sport is now focused on finding value," says one highly regarded GM, "and I don't think there's a more undervalued asset in the game than a good general manager." -- Buster Olney[+] EnlargeFinlay MacKay for ESPN.comIf Brek Shea signed with a European team, the winner would get a bigger raise.
5. AMERICAN SOCCER PLAYERSThis is an industry in which American workers come incredibly cheap compared with their counterparts from Latin American countries such as Mexico, Costa Rica and Honduras: soccer. Due to league salary restrictions, U.S.-born MLS players not named Landon Donovan make, on average, $95,522 a year. Americans also have a tougher time landing gigs overseas, partly because, as Chicago Fire defender Cory Gibbs, who played in the German Bundesliga before joining MLS, says, "most European teams don't really recruit college players." Two rare breakouts, Tim Ream and Stuart Holden, exemplify just how undervalued MLS stars such as Brek Shea truly are. In January, the New York Red Bulls sold Ream, whom the club paid $62,625 in 2011, to England's Bolton Wanderers for $4 million. And Holden, who played out his MLS pact to the bitter end even though it paid him just $34,270, became a Premier League star with Bolton and now makes $2.1 million a year. -- Luke Cyphers and Doug McIntyre
6. MR. KHAKI PANTSWhen an NBA star drops to the floor squirming in agony, who rushes onto the court to determine the source of his pain? Usually a geek dressed in a team-logo polo shirt and khaki pants equipped with a belt holster carrying scissors and athletic tape. Perhaps no other pro sport relies on the physical and mental health of superstars like Kobe Bryant more than the NBA, and no one has more daily influence on a star's state of mind and body than a head trainer like Gary Vitti. "They're with the players every single day and usually when they're most vulnerable," says one league exec. And having a star available for half a dozen more games a season can mean the difference between simply making the playoffs and having home-court advantage throughout the postseason, which translates into millions in revenue. So any team that goes deep into June should thank the healer who helps to limit the games players miss. A new pair of khakis is definitely in order.-- Ric Bucher
7. RUNNING BACKSSure, rushing is down and passing is up in the NFL, but RBs still touch the ball a lot more than receivers do -- and they don't enjoy the pass-happy rules that protect those players. Comparing positions, only TEs earn less than RBs do ($1.65 million a year); even kickers make more, by an average of $136,000. And since 2002, only receivers' salaries have increased at a lower percentage. Backs such as Jacksonville's Maurice Jones-Drew, one of two with 300-plus carries last season, take such a beating that the position's average NFL life span -- 2.57 years -- is the shortest in the league. Yet the Pro Bowler made less last season ($4.15 million) than WRs Sidney Rice ($8 million), Earl Bennett ($7.2 million) and Chad Ochocinco ($6 million), who combined to cost nearly $300,000 a catch. RB should stand for Relative Bargain. -- Eddie Matz
8. ROGER, GARY, DAVID AND BUDEvery league commissioner works for his team owners, a particularly willful breed of super-rich animal he must coax into speaking with one voice -- or at least into staying just quiet enough so as not to adversely affect the bottom line. Amid free agency and media megadeals, any commissioner's main goals are to maximize his sport's financial take from fans, sponsors and TV networks and to claim the largest slice of the pie for the owners. By those standards, the men overseeing the four major sports have done a fabulous job. The NHL's Gary Bettman (annual salary: $7.5 million), NFL's Roger Goodell ($9.8 million) and NBA's David Stern ($10 million) have overseen lockouts that successfully drove down the percentage of league revenues paid to players, and MLB commish Bud Selig ($18.4 million) has presided over nearly two decades of labor peace. Here's how to put their salaries in context: Over the past five years, the value of the 122 major sport franchises has soared $10 billion to a total of $70.5 billion, according to Forbes. The commissioners' combined salaries were less than 3 percent of that increase. Owners would have a hard time getting a deal that good from their accountants, lawyers or money managers. They probably spend as much on their private jets. -- Peter Keating
9. MAJOR WINNERSWhen Phil Mickelson won the 2006 Masters, he used two Callaway Fusion drivers -- one set to draw and the other to fade. The next day, orders doubled. Keegan Bradley's PGA Championship last year drove fourth-quarter sales of Odyssey's $200 Sabertooth long putter from 797 in 2010 to 22,915 in 2011. Heck, Bubba Watson's Masters win even juiced sales of his socks. Whatever it costs to get a potential major winner's endorsement (deals start at $10,000 for a club) is too low. -- Sarah Turcotte
10. LIVE ACTION SPORTSTickets to most major sporting events will set you back hundreds of dollars -- thousands if it's the Super Bowl. But in terms of fan experience, athlete accessibility and giveaways, nothing beats action sports. At the (free) Winter X Games, fans can watch from the base of the halfpipe and high-five Shaun White between runs; at AMA Supercross races, two-time champ James Stewart signs autographs in the pits; at the Glen Helen stop of the Red Bull X-Fighters freestyle motocross series, fans can actually ride alongside the athletes. "I want to separate myself with my riding but be connected to my fans," says Stewart. "That means something in our sports." -- Alyssa Roenigk
11. LOW-RANKED TENNIS PLAYERSIn the ATP, three stars -- Novak Djokovic, Roger Federer and Rafael Nadal -- have won up to 26 percent of all available prize money since 2007, according to USA Today. Meanwhile, the guys they beat have to pay a king's ransom for the abuse; their expenses rival those of the superstars, but they receive few sponsorships or freebies to cover costs. The same is true in the WTA: No. 163 Coco Vandeweghe made $157,387 in prize money last year but had to pay all of her expenses -- from travel to stringing -- out of pocket (almost $200,000 annually for a middle-of-the-pack pro). The solution? Just win, baby. -- Lindsay Berra[+] EnlargeCody Pickens for ESPN The MagazineSeventy-five percent of MLBers make their debut by 25. The Royals Eric Hosmer is just 22.
12. OLDER MLB PROSPECTSThe better the player, the younger he is when he makes it to the big leagues. Indeed, 75 percent of MLBers make their debut by age 25. But aging patterns show that, in general, baseball players continue improving until age 29, when their performance begins to plateau for several years before declining. So if teams give up on prospects who are in their mid-20s, they may miss out on late-blooming talent. Take the World Series champs: Cardinals Allen Craig and Jon Jay debuted at 25, David Freese at 26. Without them, the Cards probably would've missed the playoffs entirely -- and certainly wouldn't have won the epic Game 6. Besides, older prospects are cheap. St. Louis paid Craig, Freese and Jay about $415,000 each last season, not only giving the team quality play but freeing up money for sluggers Matt Holliday ($16.3 million) and Lance Berkman ($8 million). MLB clubs, respect your elder rookies. -- J.C. Bradbury
13. NHL EURO SCOUTSPaid just $60,000 to $125,000, the typical European scout travels relentlessly across the continent to scour domestic leagues for less-heralded prospects who might be worth millions to the teams that draft them. Current hot spot: Sweden. In 2008, scout Anders Forsberg convinced his Ottawa employers that the Senators couldn't miss out on an undervalued 160-pound Swedish defenseman named Erik Karlsson; they traded up to 15th overall and signed him for three years at $2.625 million. Four years later, Karlsson is Paul Coffey incarnate. -- Craig Custance[+] EnlargeBen Baker for ESPN The MagazineArchie's progeny are economic engines.
14. MANNING DNAImagine if former NFL commissioner Pete Rozelle had had the foresight to approach Saints QB Archie Manning and his wife, Olivia, back in the 1970s and pay them to begin producing sons. What value would the NFL have received for that deal? By our calculations, it would have been the contract of the century. In the past two seasons alone, Peyton and Eli have brought the NFL an immense amount of exposure on TV, inside stadiums, online and elsewhere. In fact, it's the kind of positive press and airtime that companies pay top dollar for. Just how much? We asked Eric Smallwood, senior vice president of Front Row Analytics, to do the math. -- Alyssa Roenigk
Advertising Equivalency Value from Sept. 1, 2011, to March 20, 2012:
Peyton Manning: $366,006,845
Eli Manning: $86,877,706
Total Value: $452,884,551
15. EARLY QB DRAFT PICKSFormer Packers GM Ron Wolf nailed it with his QB philosophy: Draft 'em high. A recent study by Harvard student Kevin Meers evaluated the careers of QBs using a metric called Career Approximate Value (CAV) and confirmed that when top-rated QBs are available, GMs should grab them. "The upside of drafting the first overall quarterback taken is two and a half times greater than the downside and falls rapidly as more QBs are drafted," Meers says. "It's rare for a real franchise quarterback to pass through the first two rounds without being taken." And with first-round salaries now capped at half of what they were two years ago (when teams had to invest a Sam Bradford-esque $8 million a year in a QB) and backups suddenly at a premium, investing early in a signal-caller will result in trade value, if nothing else. By the mid-second round, though, temper expectations. Of the 338 QBs drafted after pick 50 since 1980, only Tom Brady has a CAV above 100. -- Alyssa Roenigk
16. NHL ENFORCERSThe debate on NHL fighting raises issues of safety and violence, but for many GMs it boils down to economics. By protecting higher-priced teammates, enforcers help teams win at a fraction of the cost of the average player. This is especially true in the rough-and-tumble Eastern Conference, where four of the most frequent fighters dropped their gloves for playoff teams. Those pugilists, including Flyer Zac Rinaldo, averaged a mere $715,000 in salary, far from the league average of $2.4 million. But if an opponent takes liberties with a star player, that's who ultimately will have the price to pay. -- Doug McIntyre
17. LEGENDARY PITCHMENMichael Jordan and Arnold Plamer weren't always saints during their playing days, but when it comes to their value to endorsers (Nike and Callaway among them), time heals all wounds. "Legends always have a special place in fans' hearts because of the memories," says Stephen Master, VP of Nielsen Sports. "Plus, they can't make any more bad plays." Nielsen and market research firm E-Poll developed a formula to determine an athlete's N-Score, which quantifies the athlete's value to companies as representatives. Some of the most valuable include Jordan (N-Score of 553), Muhammad Ali (360), Magic Johnson (338) and Palmer (270). Compared with those product pushers, contemporaries like Jeremy Lin (102) and Phil Mickelson (75) look decidedly ho-hum. -- Sarah Turcotte
18. MINOR LEAGUE PR GUYSSean Aronson's workload isn't unusual for a media director working in baseball's minor leagues. He pulls into the St. Paul Saints' parking lot around 9 each morning and pulls out 15 hours later. In between, he'll do everything from selling tickets to interviewing players to meeting with sponsors to -- oh yeah -- doing the radio play-by-play. And believe it or not, for this -- a job that largely determines whether a team will be in the red or black -- someone in his position rarely clears more than $30,000 a year. Minor league teams don't have big TV contracts, and most don't own the stadiums they play in. Instead, some rely on their publicity chiefs to drum up their main revenue source: ticket sales. "A PR person is the key to building loyalty to the product on the field," says Zachary Fraser, a former rookie league GM who now runs Washington's Walla Walla Sweets. "The promotions, the ticket specials, the 'show' of minor league baseball -- these are all important, but at the end of the day, the magic of baseball is creating meaningful relationships." Come payday, Aronson's check may seem minuscule for the many hats he wears day in and day out, but he says you can't put a price on working at a ballpark instead of an office tower. "I'm living my dream,'' Aronson says. -- Jim Caple
1. MANCHESTER CITYIn world soccer's salary-cap-free zone, European clubs are losing boatloads -- more than half of the 655 teams surveyed by UEFA lost a combined $10.9 billion in 2010 -- largely from overspending on free agents. Manchester City is the main club blowing up the labor bubble. SportingIntelligence.com projects that owner Sheik Mansour will dump $210 million this season into a first-team group of soccer mercenaries, many of whom haven't produced. Even though the club is still in the Premier League title hunt domestically, it crashed out of the Champions League, losing a potential $40 million windfall. As a result, its revenues won't remotely match its payroll, and that spells bad news for the future. Beginning in 2013, a new UEFA rule requires clubs to be in the black in order to qualify for European tourneys -- meaning Manchester's bubble might be bursting soon. -- Luke Cyphers
2. SEVEN-FOOTERSThere have been plenty of warning signs: Michael Olowokandi, Sam Bowie, Kwame Brown and Greg Oden, to name a few. But despite all the big-men busts, NBA teams continue to treat seven-foot centers like unicorns, mythical creatures worth any price. Last summer,Nene (6'11"), Marc Gasol (7'1"), Tyson Chandler (7'1") and DeAndre Jordan (6'11") each landed long-term deals worth $10 million or more this season. Yet not one posted a Player Efficiency Rating that ranked among the top 10 centers in 2011-12; only Gasol has received an All-Star nod. The attachment to them is understandable -- the past 13 NBA champs all had an edge in the lane -- but as the league skews toward smaller, more versatile lineups, bigs are often found on the bench during crunch time, making their deals hard to justify. "It's the position where the most mistakes are made," says one GM. How else can you explain Golden State's trade for a regularly injured, seven-foot, $12 million Andrew Bogut? Like unicorns, it's unreal. -- Ric Bucher
3. POWERHOUSE FOOTBALL COACHESAfter signing a new contract that will pay him an average annual salary of $5.62 million through the 2019 season, Alabama's Nick Saban is now college football's highest-paid coach. And in the minds of Tide fans, the man who brought them two BCS titles in three years is well worth it. Even school administrators support the megadeal, touting exposure for the university, not to mention a packed stadium and merchandise sales (Tide football raked in $77 million in 2011). But the reality is that Saban's value is inflated because players, the real source of revenue, are barred from competing with him for a slice of the pie. "The NCAA's move toward $2,000 grants for athletes is a step in the right direction," says former UCLA linebacker Ramogi Huma, founder of the National College Players Association. "But with TV revenues and coaches' salaries at record highs, that cap should be raised." The idea that colleges can't find the money amuses former Steelers star Hines Ward: "They never seem to have trouble finding it to give a coach another raise." -- Ryan McGee
4. NBA DRAFT PICKS OUTSIDE THE TOP 5Ekpe Udoh, Jonny Flynn, Yi Jianlian. Those are just three of the latest reminders that the NBA draft is fool's gold starting with the No. 6 pick. Based on analysis from 1989 to 2009, ESPN Insider found that GMs with the No. 5 spot wind up selecting a player who's worth, on average, 6.1 estimated wins added (EWA). But that production plummets to 1.9 EWA just one slot later (see below) and stays shockingly low from there. So when your team is staring down the 10th pick this June, prepare for an Erick Dampier-level return on investment. If your GM is smart, he'll move lower picks for cap-friendly role players and hold out for a superstar worth a max deal. That should equal the playoffs -- instead of more pingpong balls. -- Jordan Brenner
5. BALL-HOGGING SCORERSIf Milwaukee seriously thought guard Monta Ellis was worth the big bucks, its front office must not have watched his six seasons as a Warrior. In NBA land, no species is as overvalued as the high-usage, low-efficiency, poor-defense player -- guys who do fill the stat sheet, but only because they dominate the ball. Ellis is the worst offender, leading 18 players who, over the past two seasons, averaged at least 23 minutes per game and were used on at least 24 percent of possessions yet had an offensive rating no higher than 105 and a defensive rating no lower than 105. For context, Manu Ginobili was used on 25.2 percent of possessions and had an offensive rating of 118 (though his defensive rating was 105). Our 18-player petri dish also contributed 3.5 times fewer win shares per 48 minutes than Ginobili, but you'd never know it by the average salary of this success-reducing squad: $6,545,248. Unfortunately for GMs, the NBA doesn't have an endangered list. -- Jordan Brenner[+] EnlargeDan Saelinger for ESPN The MagazineJust about any team can go to a bowl game -- provided it pays for the privilege.
6. BOWL INVITESAccording to TheWizOfOdds.com, 70 Football Bowl Subdivision teams spent an average of $1.3 million to attend bowl games for the 2010 season. Nearly 25 percent of that money went toward required ticket purchases they didn't recover. Proponents of the system say a nationally televised bowl game aids a school's marketing and enrollment, but does anyone really believe UConn's getting romped by Oklahoma 48-20 in the Fiesta Bowl kept classrooms full? "As a general rule, there is no marketing value from appearing in a non-BCS game," says Andrew Zimbalist, Smith College's star sports economist. "In fact, even the value of a BCS game is uncertain." -- Shaun Assael
7. THE SUIT IN THE SUITEFor all the sports cliches about Americans rooting for the underdog, the public sure gives a lot of support to the richest of the rich: pro sports owners. And there seems to be no slowing of financial affection. In 2010, Forbes estimated that the average NFL team is worth $1 billion -- more than four times the average team revenues in 2009 -- and that value has increased since the 2011 labor dispute. So how are owners staying on easy street? A three-part answer:
Leagues are monopolies
Pro sports are exempted from antitrust laws, so it's nearly impossible for new leagues to compete. This allows the NFL to act as a cartel when negotiating broadcast rights, creating bidding wars that've increased its TV revenue 80-fold since 1970.
Fans pay the bills
The self-made sports owner? Doesn't exist anymore. A 2011 Marquette Law School report shows that 23 of the NFL's 32 teams play at sites that were more than 50 percent financed by the public. Only the Jets/Giants, Patriots and Panthers built their stadiums with no public financing. And recently, the old leagues have learned a new trick: personal seat licenses. These force fans to cough up more money for the right just to buy tickets. Plus, teams sell the licenses through a publicly run entity (income tax free), and the owners receive a huge tax break on their already massive profit. "The value of a franchise jumps by as much as 25 percent to 30 percent after a club moves into a publicly subsidized venue," says Vanderbilt sports economist John Vrooman.
Owners keep salaries low
Owners have what Vrooman calls "monopsony" power over the players. That's his term for the big four leagues' ability to be the only bidder for talent. In other words, a major leaguer can't go anywhere else in the U.S. to find an employer comparable to MLB to compete for his services, which means baseball can, and does, restrict salaries, especially for its nonveterans. "They might be paid only 25 percent of their true worth," Vrooman says. Underpaying the young but talented allows owners to reward their stars with megabucks -- creating the notion that players are overpaid -- while still keeping overall labor costs below what a competitive market would bear. Yes, it's good to be an owner. -- Luke Cyphers
8. CLOSERSClosers are the CEOs of MLB. They enjoy the view from their offices, wait for calls offering new opportunities to pad their portfolios and receive obscene rewards based largely on the labor of others. Exhibit A: Jonathan Papelbon. The Phillies will pay the former Red Sox closer $50 million over the next four seasons for his 88.6 percent conversion rate and 225 career saves (through April 25, tied for seventh among active closers). That might sound like a steal, but Retrosheet founder Dave Smith points out that throughout baseball history, teams leading by one run after the eighth inning have won 85.7 percent of games -- and rarely was it because of a closer. Smith analyzed late-inning leads from 1944 to 2003, plus 13 seasons before WWII, to find out if the modern strategy of inserting a specific pitcher to get the final three outs produced more ninth-inning success. The answer? An emphatic no. Exhibit B: Mariano Rivera. He became the Yankees closer in 1997, and since then, New York has won 97.2 percent of games it led entering the ninth. Meanwhile, the lowly Pirates have won 94.7 percent of those games with studs such as ... exactly. It's simply a waste of resources to restrict your best reliever to situations you almost always succeed in anyway. Yet managers continue to stubbornly hold back their highly compensated closers while relying on lower-paid middle relievers when the game is truly on the line. Exhibit C: Antonio Bastardo. When the score is tied or the Phillies are ahead by a run with two on in the seventh, Philly brings out Bastardo and his $505,000 salary to accomplish Mission: Occupy Pitching Mound, hoping hitters can generate some runs in the meantime. Only then can Papelbon justify his $11 million salary this season by "saving" a lead in the ninth. So to recap: Good team or bad, overpaid closer or bullpen by committee, when you lead entering the ninth, you usually win. Case closed. -- Jim Caple[+] EnlargeAP Photo/Michael DwyerHey Sox fans: Bobby Valentine isn't the problem -- or the solution.
9. BIG-NAME MANAGERSWith five playoff appearances and two World Series rings to show for his eight seasons in Boston, Terry Francona can't be called a bad manager. But you can say his players were responsible for most of his success before he was fired. That's what we learned from a study of more than 100 managers over 30 years (1980 to 2009). In measuring the impact of new hires, it turns out there's no correlation between managers and player performance. Absolutely zero. That means if a team pays top dollar for a skipper in the hopes of a big turnaround, it's wasting its money (Bobby Valentine being the latest example). That doesn't mean there's no benefit to a new guy. A team's attendance postfiring increased on average by 1,000 fans from 2000 to 2009, which can provide a revenue bump to help bring actual change: more scouts, new development academies and a bullpen arm. So hang in there, Sox fans. That big turnaround might be coming yet. -- J.C. Bradbury
10. TOP-DOLLAR FREE AGENTSSince rookies are undervalued (page 74), it stands to reason that vets aren't. And twisted free agent logic is to blame. For one thing, teams too often assume athletes coming off breakout seasons will sustain their play. But in reality, the statistical law of gravity called regression to the mean says they're likely to decline. For another, most execs have emotional bias, whether it's toward their own players or even players they missed out on drafting or signing years ago. Plus, you can always count on owners to lack financial restraint. Put these factors together, and in some dialects of sports talk they spell "Amar'e" and "Carmelo." Basically, teams tend to invest in vets who are more replaceable than they might seem, and that's a dangerous treadmill to be on. In 2011, Carolina plowed $192 million into five key members of a D that had given up 408 points in 2010. Then two of them, Thomas Davis and Jon Beason, were injured, and the unit was just as bad (429 points). But the Panthers did win four more games thanks to NFL Offensive ROY Cam Newton. He'll make a whopping $1.4 million in 2012. -- Peter Keating
11.GIGANTIC EVENTSInternational sporting events like the World Cup and the Olympics are billed as financial bonanzas for their hosts. Heck, the 2010 Cup alone was supposed to bring South Africa $12 billion. But civic cheerleaders overestimate how much fans actually will pour into the local economy and grossly underestimate costs for extra infrastructure like, well, brand-new stadiums. South Africa built or renovated 10 state-of-the-art sites in preparation for the world's game, running up a tab of more than $1 billion. Less than two years later, the three cities that were home to the most elaborate arenas have declined to host Africa's Cup of Nations. The reason: They can't afford it. Cape Town Stadium hasn't witnessed a major soccer match since late 2010, while the viability of Johannesburg's 90,000-seat Soccer City (now known as FNB Stadium) is murky. As for the South African citizens, they'll eventually have less to show for their hospitality, if the Olympics are any indication. According to a 2011 study done at UC Berkeley, a person residing in a summer or winter Olympics host country from 1970 to 1998 lost, on average, 23.6 percent of his or her GDP per capita due to government overspending. And host site runners-up actually wound up better off for a losing bid that cost only millions instead of billions. So woo with caution, Baku and Istanbul -- the 2020 Olympics will be less than you bargained for. -- Keith Reed[+] EnlargeAl Messerschmidt/Getty ImagesTampa's O-line "anchored" the NFL's sixth-worst scoring offense.
12. HOSSES AND HOGSNFL GMs would have you believe that locking up a star-studded offensive line can change the fortune of a franchise. But don't be fooled. The 2011 Giants won the Super Bowl with a cap-conscious group of big uglies whose average salary was $2.53 million, lower than half of the league's units. Want even more proof that low dough doesn't always equal gaping holes? Since 2007, only one O-line that ranked in the top five for average salary has reached the Super Bowl (last season's Patriots). Meanwhile, the Browns, who have appeared in the top five four times, have won more than five games just once. Now, those are facts no GM can hide behind. --Eddie Matz
13. CRIBSLike most Americans, athletes tend to buy the most house they can afford. So naturally, I like to be invited into these homes for a glimpse at a life I could only dream of. But once inside, I often experience a harsh reality check: Almost every one is as empty as a foreclosed strip mall. I won't name names & okay, maybe a few. In 2005, Cadillac Williams had me over to his Tampa Bay McMansion that contained all of a bed, a pool table, a flat-screen TV and a couch, which the bachelor slept on most nights. A few years later, I made a visit to Kellen Winslow's half-filled San Diego home, where the star tight end showed me blueprints for his dream house -- thick as a playbook -- that was being built for ... just his wife and him. Hall of Famer Deion Sanders has a 29,000-square-foot, 10-bedroom, 13-bathroom spread outside Dallas, and he's tried his darnedest to fill it with a fishing lake, a gym, a basketball court and a few love-me-some-me rooms. Somehow Prime Time's palace still feels like a museum on a Saturday night: empty and a little sad. I get it. Not many pro athletes come from money. So how can I knock Donald Driver's castle when he grew up living out of a U-Haul? But the ridiculous real estate spree that bubbled up in the era of MTV Cribs has been washed away by the financial crisis, leaving JaMarcus Russell, Antoine Walker, Sergei Fedorov and Allen Iverson to face foreclosures. And that doesn't include the athletes who took a bath on their homes after being traded or released. That's why it's so refreshing that Eli Manning, Michael Vick and Tom Brady, to mention a few, live in apartments or town houses either in or near the cities where they play. Oops! Spoke too soon: Brady's $20 million custom-made 20,000-square-foot Brentwood, Calif., home, built on a bluff, with a pool the size of Rhode Island, is near completion. Hey, I'd love a tour. -- Seth Wickersham
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ESPN The Magazine: May 14, 2012