Athletes’ salaries have soared to unprecedented heights in recent years thanks to media companies that have been spending billions of dollars on the rights to broadcast DVR-proof sports programming. The money filters down to the athletes, with most leagues splitting revenue equally with the players under their collective bargaining agreements. The average salary in the NBA was nearly $5 million last season; in baseball it was $3.8 million.
Athletes typically have short windows to bank their millions, but for a select group of superstars who cultivated their brands while they were playing and after, the big paychecks have not stopped coming. The leader of the pack is a global icon who redefined the marketing of athletes in the 1980s and ‘90s with the help of Nike. Michael Jordan made $100 million in 2014 — more than any other current or retired athlete on the planet.
The Nike-owned Jordan Brand continues to soar for the Beaverton, Ore.-based sports giant and its namesake. Jordan U.S. retail shoe sales rose 17% last year to $2.6 billion, according to data compiled by SportScanInfo. Nike royalties provide the bulk of Jordan’s annual earnings, but he also retains sponsorship deals with Gatorade , Hanes, Upper Deck, 2K Sports and Five Star Fragrances. Jordan’s 90% stake in the Charlotte Hornets, worth more than $500 million net of debt, made him a billionaire last year with the explosion in NBA valuations (for more on Jordan, see “How New Billionaire Michael Jordan Earned $100 Million In 2014”).
Global soccer icon David Beckham ranks second with earnings of $75 million. After a 20-year career, Beckham had his biggest year ever from an income standpoint during his first full year of retirement in 2014. Credit two new partnerships with Diageo and Global Brands Group, which netted Beckham more than $20 million combined in upfront money. The deals also have significant potential thanks to Beckham’s ownership stake in the ventures. Beckham remains one of the top product pitchman in sports with a dozen deals to his name, including four in China (see “David Beckham Banks His Biggest Year Ever With Earnings Of $75 Million”).
This is our second annual look at the world’s highest-paid retired athletes. The top 12 all banked more than $12 million last year by our count and a cumulative total of $389 million (last year’s top 12 earned $332 million). They hail from six different countries and played five different sports. Their ages range from 33 to 85. Our earnings estimates include salaries, endorsements, licensing, speaking and appearances, golf course design, book deals, partner distributions and production contracts in 2014. They do not include investment income.
“These athletes created brands for themselves before people focused on brands,” says Marc Ganis, president of consultancy Sportscorp. “Their brands received a tremendous amount of free publicity every time they were on TV or reporters wrote about them. Some of them converted that brand into a lot more than a free car at the local dealership.”
Long before LeBron James was around, the King in the sports world was Arnold Palmer. The last of his 62 wins on the PGA Tour was in 1973, but Palmer had his biggest year ever in 2014 with earnings of $42 million. Seemingly every iconic retired athlete wants to mimic the “Arnold Palmer” model where you successfully license your name and let the royalty checks roll in, but few can match the original. Palmer remains a financial force, particularly in Asia. There are 500 free-standing Arnold Palmer stores with another 200 coming over the next 18 months thanks to a new deal with Sanshu Sports (Fujian). Sales of Palmer-licensed products were up roughly 8% last year.
Palmer is still an icon in the U.S., too. His Arnold Palmer line of drinks represents roughly 25% of revenues for AriZona Beverage Co. He remains a viable pitchman despite turning 85 last year. Ketel One renewed its endorsement deal with Palmer in 2014. Johnson & Johnson JNJ -0.87% is rolling out a multimedia campaign with national commercials this year featuring Palmer and a couple of other celebrities for its Xarelto blood thinner. And in a testament to the power of Palmer, Rolex extended its deal with him for another 10 years in 2014. Rolex and Palmer are coming up on 50 years together, making theirs one of the longest relationships ever between an athlete and corporate partner.
Another golf legend, Jack Nicklaus, ranks No. 4 with estimated earnings of $28 million last year. The golf course design business has slowed globally, but the Golden Bear remains the top designer. He founded Nicklaus Design almost 45 years ago and the firm has designed 390 courses since then with 50 more projects currently under development. Nicklaus partnered with Perry Ellis at the end of 2013 for a line of Nicklaus-branded apparel available at J.C. Penny, pro shops and other outlets. The global Jack Nicklaus Apparel line generates $250 million annually. Nicklaus’ latest venture is a line of ice creams in partnership with Schwan Food . Beginning in March, seven flavors of Nicklaus-branded ice cream will be on sale in Winn-Dixie, Bi-Lo and Kroger KR +0.51% stores.
Other golfers that made the cut of top earners include Gary Player at $21 million and Greg Norman at $16 million.
Few athletes in recent years have made the transition from jock to mainstream celebrity better than former New York Giants defensive end Michael Strahan. The seven-time Pro Bowler has become a media darling since hanging up his cleats seven years ago. He banked $14 million last year, by our count, which is tied for No. 10 with recently retired tennis star Li Na. Strahan co-hosts Live! with Kelly and Michael alongside Kelly Ripa and serves as a football analyst on Fox. Last year was a big year for Strahan as he was elected to the Pro Football Hall of Fame and added to ABC’s Good Morning America team. Both moves bumped Strahan’s earnings.
In addition to his hosting duties, Strahan is a partner at SMAC Entertainment, a talent management company based in Los Angeles. Strahan is also a popular pitchman whose partners include Dr. Pepper, Sports Authority , Vaseline, Subway , Pizza Hut, Snickers and Procter & GamblePG +0.02% for Right Guard and Meta.