#964 Joe Pompliano On The World’s Highest Paid Athletes

In this episode, my brother Joe Pompliano breaks down Sportico's list of the highest paid athletes in the world. We discuss the differences of salaries in each major sport and the varied endorsement deals that are presented to each these athletes off the court. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= Imagine coinmarketcap - decentralized. 3X in valuation is 15 billion dollars from the current price. Cryptotoday.com starts at zero, at fair launch on 7th of March. No VC. No pre-sale. Team tokens locked. For the people, by the people. For decentralized crypto. Visit http://cryptotoday.com and read the whitepaper for the details.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Joe Pompliano is the big brain behind Huddle Up. He also happens to be my brother. In this conversation, we talk about the world's highest paid athletes. We break down exactly where they make their money, how exactly sustainable that revenue ends up being, and who's making more money on the field or off the field. I really enjoyed this conversation with Joe, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by BlockFi. BlockFi provides financial advice for crypto investors. Those products include the BlockFi Wallet, a US dollar loan collateralized by your crypto, and a

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• 2:07Anthony Pompliano?

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• 3:35Anthony Pompliano?

  You can read the white paper at cryptotoday.com. Again, go to cryptotoday.com to learn more. All right, let's get in this episode. I hope you guys enjoy this one.

• 3:43Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:07Speaker 02

  We're talking about the highest-paid athletes in the world.

• 4:09Anthony Pompliano?

  Woo! Conor McGregor?

• 4:11Speaker 02

  Big list. Uh, he's on there. He's not in the top 10, though. We have the top 10. Let's pull up the top 10.

• 4:15Anthony Pompliano?

  All right, let's go. Oh, we got a list!

• 4:17Speaker 02

  We got a list, yeah. We got a few charts, a few charts today. So all of this data is from Sportico. So Forbes and Sportico, they do these lists every year. Sportico does this. This guy Kurt, he's very good at it, outlays everything. Is the top 10 from this year from 2022, the last 12 months. LeBron James, highest paid athlete in the world, 127 million dollars. Then you got a few soccer players, Messi, Ronaldo, Neymar. I love how Neymar, just his name, one name, Neymar. Then you got Canelo, Stephen Curry, Kevin Durant, Roger Federer, James Harden and Tiger Woods. So there's a few different things about this list that I think is interesting. One, it's dominated. So he does the top 100. It's dominated by basketball players.

• 4:57Speaker 02

  And then if you look on each individual sport, so Matt, I think we have the chart of the highest paid athlete in each sport. Let's run through that and then I can, I can talk about a few takeaways, right? So LeBron James, highest paid basketball player is also number one in the world. So it has their overall ranked to the left, one through 61. And then the sport, their winnings, their endorsements, and then the total. So LeBron makes 90 million dollars. He made 90 million dollars last year from endorsements. So the majority of his income comes from endorsements. He's at first. Messi is the highest paid soccer player in the world, Alvarez, boxer, the list goes on. Few things that are interesting here, look at Roger Federer, right? He made $700,000 last year actually playing tennis versus $85 million not playing tennis.

• 5:37Anthony Pompliano?

  Jesus.

• 5:38Speaker 02

  Right? So literally the smallest amount of his income possible comes from tennis.

• 5:43Anthony Pompliano?

  Why? Like what is going on?

• 5:45Speaker 02

  He's built a massive brand. So he gets paid $30 million a year by Uniqlo, which is pretty substantial, right? He used to have a 10 year deal. This is actually pretty fascinating. He had a 10 year deal with Uniqlo or with Nike. Nike didn't want to pay him more because they have this roster of athletes and the margins.

• 6:01Anthony Pompliano?

  He's just one of.

• 6:01Speaker 02

  He's one of, and if you pay one person too much, their business wasn't big enough to justify that basically. So.

• 6:07Anthony Pompliano?

  And also they use it as comps. It's kind of like wide receivers. Then if I want to be the highest paid receiver, what's the last guy got paid?

• 6:12Speaker 02

  So long story short, he left, he goes to Uniqlo, he got a 10 year, $300 million deal, 30 million a year. Doesn't have a retirement clause. He hasn't really played, right? He's been hurt and so forth. He's getting older. So even at the age of 46, when the contract, the last year of the contract, he'll still get $30 million a year, even if he retired when he was 40.

• 6:28Anthony Pompliano?

  What is it? Bobby Benelia?

• 6:32Speaker 02

  Yeah, well, that's, that was Benia. Yeah, it was a different circumstance, but like this is, that's his deal, right? And it doesn't include, a lot of that money too, it doesn't include shoes. Uniqlo doesn't have a shoe deal. So he partnered with Uniqlo, got equity, owns 3% of the business. Then went public at a $10 billion valuation. He owns $300 million of equity. I don't know when that actually is liquidated, but he's getting paid from that too.

• 6:54Anthony Pompliano?

  Okay.

• 6:55Speaker 02

  So I think there's a few other things, right? Look at Conor McGregor. He's still pretty high on the list. He's the highest paid, uh, I don't know if that's just MMA or fighter, wrestling, whatever it is, but yeah, mixed martial arts. He is on there. He made uh, $52 million last year, $32 million in winnings and $20 million in endorsements. And I don't even know if he won a fight last year, right? So like, when you think about it in that context, like, he's still getting paid pretty well. Um, but I, I, I think there's uh, some, some other takeaways here that I wrote down that I think are pretty interesting. Let me see if I can pull them up. So Body Armor, remember Body Armor showed to Coca-Cola for $8 billion?

• 7:30Anthony Pompliano?

  Yes.

• 7:30Speaker 02

  This includes some of the athlete payouts. Uh, Naomi Osaka got a seven-figure check, highest-paid female athlete in the world for the 30th year in a row, 24 years old, no big deal, pretty, uh, pretty substantial, right? She got a seven-figure check. Uh, James Harden, $20 million from the Body Armor deal.

• 7:48Anthony Pompliano?

  That's crazy.

• 7:48Speaker 02

  Pretty good, right?

• 7:49Anthony Pompliano?

  20 million?

• 7:50Speaker 02

  He got 20 million when they sold to, to, so he was an early ambassador for the, you know, relatively early ambassador for the company. And the thing that Body Armor always did really well was they offered all these athletes equity. Like, not, not substantial amounts, right?

• 8:03Anthony Pompliano?

  Yeah, but enough to make it interesting.

• 8:05Speaker 02

  Right? So like, some of them are getting seven-figure checks when the brand sells, which is pretty substantial. And if you're deciding between Gatorade or Body Armor or Powerade or any of these other businesses, like, usually the equity is probably what gets you over the line. So they were notorious for doing that. James Harden was one of the earlier ones that got it at a lower valuation. Obviously, he walked away with $20 million. Uh, Mike Trout got a payout as well, several other people. So back to the tennis thing, another takeaway was Roger Federer, Naomi Osaka, and Serena Williams earned just 1% of their pay from on-court earnings.

• 8:35Anthony Pompliano?

  What?

• 8:36Speaker 02

  Yeah. So, so tennis players, uh, are earning the majority of their income, call it 90 to 99% for the largest people in the world, uh, off of the court through endorsements and so forth, because the tennis winnings aren't as lucrative. And then on boxing side, Alvarez, Tyson Fury, Jake Paul, all earned 90% or more of their income inside the ring, right? So if you look at the two sports, tennis players are earning all their income outside of the court. Boxing's the complete opposite where they're earning all their money inside of it.

• 9:05Anthony Pompliano?

  Can I push back on that idea for a second?

• 9:06Speaker 02

  Go ahead.

• 9:07Anthony Pompliano?

  Canelo earned majority of it inside the ring?

• 9:11Speaker 02

  Yes.

• 9:12Anthony Pompliano?

  I thought that he, and maybe it's just rumors on the internet. I thought he had some massive businesses, like he owns a bunch of like gas stations in Mexico. He owns a bunch of companies and brands and all that. Is it just, he owns that stuff and he basically took the winnings from inside the ring, converted it and it just, it doesn't produce enough return to like eclipse what he earned in the ring?

• 9:33Speaker 02

  Yeah. So if you think about the businesses, obviously this list is, is difficult to

• 9:39Anthony Pompliano?

  Of course.

• 9:40Speaker 02

  To determine how much income is coming off of businesses that you own and operate and all of this, right? So to your point, he owns gas stations, he owns a bunch of real estate and he's getting quarterly, he's talked about it previously, he's getting quarterly dividends from that stuff, right? But he earned $84 million in the ring last year.

• 9:57Anthony Pompliano?

  Yeah, so it's hard.

• 9:58Speaker 02

  So it's hard to balance that out because they have him at $5 million outside the ring. Still a lot of money, right? Maybe it's 10 million, maybe it's 15, maybe, you know, whatever. That'd be triple, but even if it's that, he's still earning the majority of it inside the ring because boxers are paid so well, right? So this chart explains it really well, which is below the line means you're earning the majority of your money outside of your sport.

• 10:18Anthony Pompliano?

  Okay.

• 10:19Speaker 02

  Via endorsements. Above the line means you're, you're earning the majority of it in your sport through salary and winnings.

• 10:24Anthony Pompliano?

  Even like a Cristiano Ronaldo, which obviously is close to the line, but still he's getting paid more from playing the sport than from endorsements.

• 10:32Speaker 02

  That's the difference in Europe, especially with soccer. Those, those players get paid absurd amounts of money, right? And in the NFL, in the NBA and all of this, there's a salary cap. So if you think about, like this is what we talked about with Tom Brady the other day. The highest or the best players in, in North American sports with salary caps are generally underpaid relative to other people because of the amount of money they can generate outside of the sport, for the sport, et cetera. So LeBron's a good example of that, right? Like he's making $90 million a year in endorsements. That's insane.

• 11:00Anthony Pompliano?

  What also is interesting to me here is like Messi, Ronaldo, Neymar, they all make like, what, a third more in salaries? Almost double in salary than LeBron James?

• 11:15Speaker 02

  Yeah.

• 11:16Anthony Pompliano?

  Like, those are big numbers to be getting paid.

• 11:18Speaker 02

  Like, obviously soccer is the most popular sport in the world.

• 11:20Anthony Pompliano?

  Yeah, of course.

• 11:21Speaker 02

  So there's a lot of money in it, especially for the big-name people. But there's a salary cap, right? And there's max contracts. And like LeBron, you could argue, just from an economic perspective, what did the championship in Cleveland have to do with the valuation of the franchise? What did it have to do for the local economy and all this stuff, right? And I don't even know if he was the highest-paid player on the team that year. I think Kyle would have.

• 11:39Anthony Pompliano?

  And some of the big players end up getting less so that their teammates, they can get the right team.

• 11:42Speaker 02

  Of course, of course. But Miami, think about the same thing, right? People are, they're capped because of the salary constraints of the league relative to the amount of money. Like, if you think about Giannis Antetokounmpo, he deserves two, three, four times, you could argue, his salary. So if you look at the highest-paid per sport, this is also interesting, right? Because they took the top 100 highest-paid athletes in the, in the world, and they broke it down by individual sports. So cricket only had one, MMA was Conor McGregor. He was the only one on there. Racing has two, which I believe was Lewis Hamilton and Max Verstappen. Tennis had a few, boxing had a few, et cetera, and the list goes on. But basketball still dominates the list, right? It's 36 out of the 100. And then if you include football, North American sports are over half of the list, right?

• 12:25Speaker 02

  So outside of soccer, it's really dominated by sports here in the United States.

• 12:30Anthony Pompliano?

  Yeah, I guess the other part is when you think about these athletes, they've all gotten much smarter about how do they make money outside of the ring, the field, the court, whatever. But I do wonder how much of LeBron's net worth, let's take him as an example, comes from building companies versus endorsement deals? Like, I'm assuming those endorsement numbers don't include Spring Hill or other companies that he's built from scratch?

• 12:57Speaker 02

  Well, I don't know how much, if he took any equity off the table when they raised money, right? So Spring Hill raised at a $750 million valuation. He's a founder of that business, so I'm assuming he owns a somewhat meaningful portion of it still.

• 13:09Anthony Pompliano?

  Nine figures, probably.

• 13:10Speaker 02

  Yeah, right?

• 13:11Anthony Pompliano?

  Yeah, but my point, just being like, so if he gets paid, I'm gonna use just round.

• 13:15Speaker 02

  No, they only do it if there's an exit.

• 13:17Anthony Pompliano?

  Yeah, so, well, just 40 million in salary, 90 million in endorsements. But if he sold Spring, let's say he owned 100% of, he sold for $750 million. I guess would be it wouldn't show up as an endorsement deal.

• 13:28Speaker 02

  No, I think that like they have, they include separate categories. They just called endorsements, I think for the, for the thing, but like Conor McGregor was the highest paid athlete in the world a year or two ago, whatever year it was when he sold his, his liquor company, right?

• 13:39Anthony Pompliano?

  Got it, got it. So they count, they do count the exits as part of this.

• 13:42Speaker 02

  But I, but right, they have to be like, we don't know what necessarily happened with the equity and the cap table when it came to Spring Hill. So I don't know if they know that either. Obviously this isn't, uh, it's more of an art than a science and you can't determine it down to the dollars and cents, but you can get some direction on it based on kind of what they're saying. So maybe it's, you know, 90% accurate, maybe it's less than that, maybe it's more than that, but I think it's relatively directional accurate. The one thing I think is interesting too is like some of the young people on the list, right? If you think about Naomi Osaka, she made over $50 million last year, highest paid female athlete in the world for three years in a row, uh, but she's only 24 years old, right? So she announced today too, that she is going to be, uh, starting her own agency. She's leaving IMG and doing what some of these other people like Roger Federer and others have done,

• 14:25Speaker 02

  which is partners with her agent at IMG, goes and starts a new business. They both own equity in it and they try to go recruit other people. So we'll see if that works out, but that could be another way that she can increase her value and her brand and her equity. Uh, and then another young person was Max Verstappen. He's 24 years old also. He made $43 million last year. And the thing people don't realize about some of these other people are, uh, the Formula One drivers in particular, they all relatively own businesses outside of this. So like Max, for example, he owns his, all of his memorabilia and stuff like that. Every single race, you see him posting about it aggressively. Uh, go buy this helmet, go buy this shirt, whatever. And they're able to generate new items for each race, right? It's like mini drops or mini collections. So those are going to be big businesses eventually just based on the amount of money and they're going to able, be able to generate.

• 15:11Speaker 02

  And then he's only 24 years old, right? If you're making $43 million a year in your low twenties, like the ability to just compound that over time is going to be, uh, uh, super interesting to see where guys like that end up.

• 15:22Anthony Pompliano?

  If you had to guess one athlete over the next 10 years, that's not on people's radar, but you think will be one of the highest earners, who do you pick?

• 15:34Speaker 02

  Uh, well, like the, the caveat of not on people's radar is, is tough because, you know, like I would say Patrick Mahomes, if you left that line out, right? Because he's making $45 million a year, every year for the next 10 years, just on his salary alone.

• 15:45Anthony Pompliano?

  Okay, but, but can he be a big enough star off the field on endorsements?

• 15:51Anthony Pompliano?

  He already is, right?

• 15:52Speaker 02

  Football's the biggest game. Football is the most lucrative sports organization, sports franchise in the world.

• 15:57Anthony Pompliano?

  The enterprises are. But, but if you go back to the chart with the line, Tom Brady ain't getting paid anywhere near what LeBron James is getting paid.

• 16:07Speaker 02

  Well, to be fair, Tom Brady has obviously.

• 16:10Anthony Pompliano?

  Naomi Osaka.

• 16:11Speaker 02

  Brady has placed a premium on building his own businesses, which if you just take Autograph, for example. Autograph, for example, is a, I think they raised money last time at like a three or four billion dollar valuation.

• 16:23Anthony Pompliano?

  Yeah, but my point is being like, isn't that included in here?

• 16:25Speaker 02

  I, I don't know, right? But my point is that football is the biggest sport in the world. The, from a purely money standpoint, right? From the amount of money that surrounds the NFL. Purely money, it's the biggest sport. He's obviously got an opportunity to do that. Verstappen, again, I, I think what you do is you have to pick like a younger athlete who is guaranteed to make a certain amount of money, who's going to be famous and has this large audience that can monetize that correctly. So he's one, Verstappen's another, there's a bunch of others probably underneath that. But yeah, it, it's tough to say like who you would bet on necessarily. It'd have to be, you know, someone who's young that's going to dominate their sport for the next decade.

• 17:00Anthony Pompliano?

  Yeah, all right.

• 17:04Anthony Pompliano?

  My only last question for you is when you start to think about these athletes, how much of their revenue or earnings is going to come from investing versus building over the next decade?

• 17:17Speaker 02

  Well, more would come from building if they built good stuff.

• 17:20Anthony Pompliano?

  Yeah, but they're not really building it. Like, none of these athletes are actually the CEOs.

• 17:25Speaker 02

  What you do is what Tom Brady did, right? And he's had some businesses before that haven't been ma, like TB12, the, the performance company. It's not a massive business. I wouldn't say that's like a huge win, right? He's still building it and maybe it becomes something big later on. But it, it, relative to what he could have made from partnering with a bunch of other brands, I don't know the economics, but I'm assuming it's either kind of even or something around there, right? Like, he could have made a lot of money from endorsements. But if you look at Autograph, what he essentially did was, I don't know how it worked out, whether he went to someone else or they came to him, but he partnered with good entrepreneurs who knew how to build this business. He got equity in it because of his name, image, likeness, audience, all of that stuff. And now it's a multi-billion dollar business.

• 18:04Speaker 02

  And even if he got 5%, 10%, so you know, something relatively small for a co-founder off the, off the bat. It's hundreds of millions of dollars at this point, right? In equity that he owns in that business. And that's really what I think we're going to see is like these athletes, the smartest ones are gonna become co-founders, right? They're gonna be founders of these businesses and just find people that they know are already are good operators, are good builders and start these businesses together.

• 18:28Anthony Pompliano?

  I agree. Where can we find, uh, where can we find you on the internet or send people?

• 18:32Speaker 02

  Newsletters, readhuddleup.com, podcast, Joe Pomp Show. You see, I dropped one today with Matt Liner. I said, how much money would you have been making at USC in 2004? He said, a lot. He said, me and Reggie Bush would have been making a lot of money in 2004.

• 18:46Anthony Pompliano?

  Yeah, y'all been securing the bag. By the way, John, John says, you, you taking too long, you late.

• 18:52Speaker 02

  Ooh.

• 18:53Anthony Pompliano?

  He didn't say that.

• 18:54Speaker 02

  Yeah.

• 18:55Anthony Pompliano?

  Uh, he, he actually hit me with a second day in a row.

• 18:59Speaker 02

  John, uh, and me are cool.

• 19:00Anthony Pompliano?

  Yeah.

• 19:01Speaker 02

  Yeah, the Bazooka Boys.

• 19:03Anthony Pompliano?

  The Union.

• 19:06Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.