The Superstar Effect, Tennis Edition

Photo Credit: Tatiana from Moscow, CC BY-SA 2.0

It is obvious that the information age, by homogenizing our tastes, is causing the unfairness to be even more acute—those who win capture almost all the customers – Nassim Taleb, Fooled by Randomness

The Financial Times highlighted an example of the superstar effect in its editorial calling for professional tennis to pay its losers more.

Even more than team sports such as football, where top players earn a fortune while those lower down get squeezed, tennis is a winner-takes-all activity. Roger Federer, who is enjoying a renaissance at the age of 35, is the world’s fourth wealthiest athlete, gaining $6m in prizes and $58m in sponsorship in the past year and accumulating $104m prize money in his career.

It is another story for the less talented on the circuit, having to pay for equipment, hotels and food while competing to remain in each tournament long enough to get paid. A study by the International Tennis Federation found that the average male tennis player in 2013 earned $32,640 and had expenses of $38,800. For many, the game is an unprofitable racket.

There are people who are professional tennis players – at the very top of the skill level of the sport by almost any measure – who are losing money while the top stars rake in gigantic sums. This is the move towards a more “winner takes all” model that we see being prevalent in a number of areas today.

As I point out, the gap is not just between the upper middle class and the working class as is written about in the media constantly, but also withing the ranks of successful people and cities. The “second tier successful” often have a much more precarious position than people realize.

from Aaron M. Renn


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