Set For Life -- Salary Boom Makes Financial Security Simple For Today's Professional Athletes: Just Stick The Money In The Bank

CUTLINE: SAN FRANCISCO 49ERS: #1 NFL: JOE MONTANA $3.25 MILLION

CUTLINE: AP: #1 NBA: PATRICK EWING $4.2 MILLION

CUTLINE: AP: #1 BASEBALL: JOSE CANSECO $4.7 MILLION

CUTLINE: NFL PLAYER ANNUAL SALARIES (SEE END OF TEXT)

CUTLINE: NBA PLAYER ANNUAL SALARIES (SEE END OF TEXT)

CUTLINE: BASEBALL PLAYER ANNUAL SALARIES (SEE END OF TEXT)

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Soaked in the mist of his own labor, David Wyman turned around before his stall in the Seattle Seahawks dressing room and squeezed off a damp gray shirt, revealing what might best be described as his trade-offs.

These will be Wyman's legacies from football when he is 40 and retired: Surgical incisions on shoulder and knee borne of a game that demands sacrifice and the occasional appendage. But at least football will have cut its deal.

``I've saved a lot of money,'' said Wyman, very much the average NFL player, as a second-round pick in his fourth season. ``I spoil myself every once in a while, like have someone over to my house to clean and cook. But I should be in good shape.''

As should most pro athletes.

In a two-month study of player salaries, using an accounting formula provided by Price Waterhouse, The Times determined that this year the typical athlete in all three major sports leagues achieved that rarest of claims in the American workplace: The ability to be set for life before age 30, even with the most conservative of investment strategies.

Driven by record television contracts that pushed average salaries to $950,000 in the NBA, $597,000 in major-league baseball and $360,000 in the NFL, compensation has grown to a level where athletes can expect to have retirement incomes above the wages of the average U.S. worker, based on interest from savings alone.

No longer are only the superstars set for life, a phenomenon spawned as early as Babe Ruth's pre-Depression salary of $100,000 and revived last week with hefty contracts awarded at baseball's winter meetings. Now, financial security can be reached by the average-paid athlete with the average career span of five years in baseball, or four years in the NBA or NFL.

By doing no more than placing his savings in a simple (5.2 percent after-tax) certificate of deposit, the average NFL player who maintains that salary and spends $100,000 a year during his playing days can expect a nest egg that will produce $24,128 a year in interest after he retires. The baseball player, calculations show, can count on $67,132 annually.

The NBA player, at $97,760, almost would not have to change his standard of living upon retiring in his late 20s.

``What this means is, do it right for four years and you won't ever have to work again,'' said Leland Faust of Career Sports International, a Bay Area investment firm that also analyzed salaries for The Times. ``That's pretty incredible, if you consider the scope of things.

``But more than that, it means you would have to be foolish now to be making high-risk investments. You would be gambling your whole future to do what - live a little fancier if you succeed, and get into a financial mess if you fail?''

The milestone rates as a significant one for the average athlete, who is often ill-prepared to manage instant wealth. Only five years ago, with income taxes at 50 percent and salaries at roughly half what they are today, that player would have had to stick savings in a non-guaranteed investment - and be successful in it - to reach financial nirvana.

Now, the need for even middle-class spending during his playing days has been eliminated. Spend as a rich person can ($100,000 annually), invest as Will Rogers would, and he can avoid the turbulent world of high finance and unregulated agents that ravaged such former players as NBA center Kareem Abdul-Jabbar and baseball pitcher Ron Guidry.

``If they can't be set now, there's something wrong somewhere,'' said Martin Sammon, financial counselor for the Bay Area firm Bateman Eichler. ``It's hard to blow that kind of money.''

The NFL player, long the pauper among his peers, only joined the retiring elite this year, according to the Times' measures. While baseball and NBA salaries began to promise financial security in the late 1980s, the average NFL salary only crept above $300,000 this season, finally allowing a retirement about equal to the income of most U.S. workers.

The average American wage-earner made $24,051 (before taxes) in 1988, the most recent figure provided by the U.S. Department of Economic Analysis.

Player income figures used by The Times were deliberately low, based on average salaries only and not including monies received from endorsements, royalties, contract incentives, severance payments or pension benefits. Also, for sake of consistency, a high tax burden of 40 percent (33 percent federal, 7 percent state) was applied.

Other findings of The Times' study on salaries, in each case applying the Price Waterhouse calculation:

Expensive spending habits have become largely irrelevant for the average player in the NBA, where salaries have grown 455 percent over the past 10 years.

To retire without any savings, for instance, that player has to find a way to spend $570,000, his disposable income, each year.

``You would think that's an impossible number to hit, even for the guy who shops on Rodeo Drive,'' said Robin Callan, tax partner at Price Waterhouse. ``Buy the cars, the homes, the furs, the clothes, the fine dining, and pretty soon you run out of things to throw your money at.

``At the NBA level, the problems (bankruptcies) aren't as likely to be with personal consumption as with poor investing. Put your money in the wrong place, and you can be out of $100,000 just like that.''

Though the NFL spent almost $100 million more than the NBA or baseball in player salaries this year, the ordinary pro football player is the only one that must watch his spending.

And there are many ordinary ones in the only league with a minimum salary of less than $100,000. While NBA teams used about $307 million on 324 players, and baseball teams about $390 million on 650 players, NFL teams stretched roughly $475 million over 1,316 players, some of whom make just above the $65,000 minimum.

For the first time, more than $1 billion went to player salaries in the three sports. But the only average athlete still vulnerable to the penniless syndrome - no savings at the end of his career - is the NFL player with lavish spending habits.

If that player limits his expenses to $37,000 a year, his savings should be large enough to allow him to live at that level - $37,000 in annual interest payments - after he retires. Spend $60,000 or even $100,000 each year, and a middle-class income can be generated later.

But spend $150,000 a year, and he should plan on working the rest of his life because less than $14,000 annually will be realized. Until the late '80s, the average NFL player would have had nothing to show from his career if he lived as well as his more extravagant NBA and baseball peers.

And raising children can further alter the player's definition of being set for life.

``With the average salary at $360,000, guys in the NFL don't play long enough to be set up,'' said Doug Allen, assistant executive director of the NFL Players Association. ``Plus, they have injuries to struggle with the rest of their lives.''

But Faust, who invests for more than 20 players, contends the situation for the NFL player ``is really not that bleak.'' He estimates that the average NFL player with spending habits like that of Wyman, who keeps his expenses under $60,000 a year, can retire with about $49,000 in savings interest each year if he does not immediately buy a home.

``The NFL player has a tremendous opportunity, in four years, to exceed in earnings what the average person will make in his lifetime,'' said John Jones, spokesman for the NFL Management Council.

Playing for the Seahawks, Mariners or SuperSonics can mean several extra cars or houses to the average athlete who settles in Washington, one of three states with professional sports and no state income tax.

Rookie Gary Payton, for instance, might have been a hometown hero if drafted by the Golden State Warriors - but with the Sonics, he's a bonus baby. Able to duck the California income tax of 9.3 percent for those in the highest bracket, Payton can

save a potential $1.2 million of his $13.5-million contract by spending the next six years here instead of Oakland.

To the average athlete, the difference between living in Washington instead of California can mean anywhere from $134,000 in the NFL to $354,000 in the NBA during a career. The savings also nearly makes up for playing for the Mariners, whose average salary of $389,000 last season was second-lowest in the baseball. Florida and Texas are the only other states as advantageous for athletes.

California, though, plays a sticky man-to-man defense. Wyman said he forfeited about $300 in California income taxes last year because the state conveniently figured he was earning salary while playing games at San Diego and Los Angeles.

``I don't know if I should have to pay it,'' Wyman said. ``They could get airline pilots or anyone who takes a business trip down there. The only reason they come after athletes is, it's easy to document. All they have to do is look at a schedule.''

It's enough to make an athlete take a tax-deductible swipe at somebody. Among the claims allowed by the Internal Revenue Service as business expenses are fines for fighting, cheating or any other behavior the league or team deems reprehensible.

As Payton, the trash-talking rookie, always likes to tell his rivals: Nothing personal; it's just business.

Based on guaranteed money alone, more than 30 rookies this year entered the three sports with contracts that set them up for life before they ever played in the pros.

These are the potentially idle rich of sport: athletes who could have gained financial security even if they never wore a uniform. Each was guaranteed a minimum of $1.5 million the moment he signed, typically enough to accrue a savings to produce at least $25,000 a year in retirement interest.

The elite group includes Payton, the 26 other NBA first-round picks, Seahawk defensive tackle Cortez Kennedy and five other NFL draftees. The velvet hand of potential even reached into the NBA second round this year, rewarding Golden State's Les Jepsen, a 7-foot center who averaged 5.9 points at the University of Iowa, with a guaranteed four-year deal at $500,000 a season.

Guaranteed salaries are rare for those drafted into the NFL and baseball. Basically, it's no play, no pay. Yet for the top rookies, larger signing bonuses have ensured financial security. For instance, Kennedy, the No. 3 pick in the NFL draft, was promised $2.5 million of his $6.7 million deal upon signing in August.

Baseball, which can funnel its profits toward veterans because of longer playing careers, may produce its first secure rookie as soon next year. The Oakland Athletics pushed the cash-filled envelope this year, luring Todd Van Poppel away from the University of Texas with the richest contract ever given to a player out of high school, a three-year deal that guaranteed $1.2 million even if he never made it out of the minor leagues.

``Is there any reason why Loy Vaught shouldn't be set up for life?'' said Boston attorney Bob Woolf of the Los Angeles Clipper rookie he helped sign to a four-year contract worth $1 million a season. ``We're talking all guaranteed money. If anything happens on or off the court, he gets his $4 million.''

Vaught, who averaged 10.9 points at the University of Michigan, is among 14 NBA rookies getting at least $1 million a year. Last year, only the top six picks in the draft joined that million-dollar club right out of college, which leads to another permutation in the salary revolution: Better to be late than great.

When J.R. Reid left the University of North Carolina as a junior, he signed with Charlotte as the No. 5 pick in 1989 draft, for four years and $5 million. This year's No. 5, Kendall Gill, signed with Charlotte for four years and $7.2 million. The difference between the 22-year-olds? Reid was four inches taller, a local kid, an Olympian . . . and a year early.

The gamble in turning pro has never been headier. NBA salary caps are guaranteed to increase to at least $14.2 million through the 1993-94 season, when the union agreement expires. Come out of school early, and lock up your financial security. Or play through your senior year, and possibly have your draft stock rise and fortune multiply - but at the risk of a career-threatening injury that could wipe it all away.

Sonic Shawn Kemp knows these perils as well as any young NBA player. Touted as a future No. 1 draft pick, Kemp may have been in line for an annual salary of at least the $3 million this year's top pick, Derrick Coleman, received, had he entered the draft in 1992. Instead, Kemp skipped college altogether and went at No. 16 last year. He makes $325,000 this season, and $375,000 next season in his final guaranteed season.

Averaged out over the life of his contract, Coleman is due more money in his first three months ($1.5 million) as a pro than Kemp is guaranteed in six years ($1.125 million).

By keeping his spending low and investing conservatively, Kemp said he has preserved his income. But if $1.5 million in career earnings is used as the benchmark figure for becoming set for life, Kemp needs to avoid serious injury - or renegotiate the final three years of his contract - to ensure financial security. He plans to approach the Sonics about changing his contract but has no promise the club will agree.

``I think about what I might have made (by entering the NBA later), but you just got to live with the decisions you make,'' Kemp said. ``You got to go on.''

NBA general managers frowned on renegotiation until salaries began leap-frogging each other so rapidly. Now, to keep up with the Joneses (and the Johnsons and Williamses), Utah forward Karl Malone has had his contract altered four times in five years.

With one of the lower payrolls in the NBA, Sonic General Manager Bob Whitsitt could face renegotiation if any of the eight Sonics whose contracts run through 1994 slip too far down on the league's relative pay scale. Other than Payton, none makes more than $1.4 million this season.

``You can't have hard and fast rules anymore'' as a general manager, Whitsitt said. `` . . . but the thing is, the catch phrase with players three to four years ago was: Make a commitment to me. Now it'd be nice if they honored those commitments.''

In contemporary sports, overpaid is only a temporary condition. Jon Koncak, backup center for the Atlanta Hawks, was the object of every role player's envy for several months last year with his $2.2 million-a-year deal, but that soon gave way to Blair Rasmussen's $2.8 million-a-year deal with Denver, which gave way to Sam Perkins' $3.2 million-a-year deal with the Lakers, which gave way to John ``Hot Rod'' Williams' deal with Cleveland for $5 million this season.

Baseball just compressed that scenario into one month, making at least 17 free agents $2 million-a-year players, including former Mariner Matt Young, an 8-18 pitcher last season who leaped to the Boston Red Sox for a three-year, $6.35-million deal.

Barely a year ago gimpy Sacramento King center Ralph Sampson, at $2.3 million this season, was the undisputed champion of the overpaid.

``Look at Tom Chambers, the first total free agent in NBA history,'' said Virginia-based agent David Falk, of the former Sonic who signed with Phoenix in 1988. ``He got $1.9 million. What would he get now? $2.9? $3.9? More?''

Baseball paid the best average salaries until 1985, within the two-year period when New York's Patrick Ewing, Chicago's Michael Jordan and Houston's Akeem Olajuwon entered the NBA and revitalized three of the top 10 markets. Since extending the appeal of the league beyond the Magic Johnson-Larry Bird axis that year, NBA salaries have grown 153 percent, compared to 87 percent for the NFL and 62 percent for baseball.

Sonic center Michael Cage, drawing the NBA average of $950,000, now makes almost as much as an entire team in the 1974-75 season, when a 12-man roster cost clubs an average of just over $1 million.

So who prompted the salary explosion? Essentially, the couch potato. Once driven almost exclusively by ticket prices, salaries in sports are propelled more than ever by television contracts and the ability of broadcast entities to provide large, demographically palatable audiences for advertisers.

The cost to the TV viewer is more subtle than the price of a game ticket: the willingness to absorb advertising messages, and to a lesser extent, fees for cable service. Tightly defined, spectator sports have never been so cheap. But the leagues certainly have realized the extra revenue, in the form of record television contracts for baseball ($1.5 billion four years), the NFL ($3.6 billion over four years) and the NBA ($875 million over four years) that began this year.

Even before the new TV contract kicked in, baseball reportedly increased its profit margin in 1989 for the sixth consecutive year, up 75 percent to an average of $8.3 million per team.

Whitsitt said the Sonics, whose player salaries have remained steady at 60 percent of revenues, are financially solvent because of an additional $3 million to $4 million in television revenues and the creation of a local sponsorship program. Together, those two sources generate more revenue than tickets. But he looks enviously at clubs such as the Detroit Pistons who have become wealthy with money from luxury boxes, parking and concessions.

Without the lucrative local cable deals enjoyed by such clubs as the San Francisco Giants, who committed $33 million the past month to free agents Willie McGee, Bud Black and Dave Righetti, the Mariners have not been able to compete with larger markets for the top free agents. Even with an additional $6 million from the national-television contract, the club reported losses of $3.5 million this season.

In baseball, where salaries consumed only 31.5 percent of revenues last year, revenue from 81 games' worth of tickets continues to dominate a club's financial picture. And despite an appealing promotions package from the front office, attendance jumps the past two seasons still left the Mariners near the bottom of the league.

Of course, when Ken Griffey Jr. is eligible for arbitration after next season, the relevant facts are not likely to include the club's ability to pay the All-Star outfielder. Griffey, who made $180,000 last season, should be presented with the chance to ensure his own financial security - and maybe even lay the foundation for Griffey III and Griffey IV and . . .

``If you waste it now, something very much went wrong,'' said Herb Rudoy, a Chicago agent. ``Not only should the athlete be set up, but so should his children, and his children's children.''

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THE BUCKS DON'T STOP HERESince 1975, with the advent of free agency and even greater television contracts, player salaries have increased 1,212 percent in baseball, 800 percent in the NFL, and 685 percent in the NBA. Wages for the average American worker have increased 140 percent during that time. Aggregate salaries topped $1 billion this year for the roughly 2,300 athletes (1,316 NFL players, 650 baseball players and 324 NBA players) in those sports leagues.------------------------------

NFL PLAYER ANNUAL SALARIESJoe Montana became the NFL's hightest-paid player in August when signed a four-year contract worth $13 million, averaging $3.2 million per year.PLAYER/POSITION TEAM SALARY ;

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1. Joe Montana/QB San Francisco $3.25 million ;

2. Jim Kelley/QB Buffalo $3.14 million ;

3. Randall Cunningham/QB Philadelphia $2.56 million ;

4. Jeff George/QB Indianapolis $2.5 million ;

5. John Elway/QB Denver $1.9 million ;

6. Warren Moon/QB Houston $1.7 million ;

7. Lawrence Taylor/LB Giants $1.65 million ;

8. Dan Marino/QB Miami $1.6 million ;

9. Herschel Walker/RB Minnesota $1.5 million ;

10. Reggie White/DE Philadelphia $1.45 million ;

NBA PLAYER ANNUAL SALRIESBase salaries for the 1990-91 season. Include the signing bonus in John ``Hot Rod'' Williams' contract, and the Cavalier forward tops the list at $5 million.PLAYER/POSITION TEAM SALARY ;

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1. Patrick Ewing/C N.Y. Knicks $4.2 million ;

2. Akeem Olajuwon/C Houston $4.0 million ;

3. Magic Johnson/G Lakers $3.1 million ;

4. Michael Jordan/G Chicago $2.95 million ;

5. Karl Malone/F Utah $2.9 million ;

6. Charles Barkley/F Philadelphia $2.9 million ;

7. Isiah Turner/G Detroit $2.7 million ;

8. John Williams/F Cleveland $2.7 million ;

9. Sam Perkins/C L.A. Lakers $2.6 million ;

10. Moses Malone/C Atlanta $2.5 million ;

BASEBALL PLAYER SALARIESThe top baseball contracts by average annual values. The figures include all guaranteed income but not income from potential incentive bonuses.PLAYER/POSITION TEAM SALARY ;

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1. Jose Canseco/OF Oakland $4.7 million ;

2. Darryl Strawberry/OF L.A. Dodgers $4.05 million ;

3. Don Mattingly/1B N.Y. Yankees $3.86 million ;

4. Will Clark/1B San Francisco $3.75 million ;

5. Kevin Mitchell/OF San Francisco $3.75 million ;

6. Dave Winfield/OF California $3.75 million ;

7. Andre Dawson/OF Chicago Cubs $3.7 million ;

8. Dave Stewart/P Oakland $3.5 million ;

9. Nolan Ryan/P Texas $3.3 million ;

10. George Bell/OF Chicago Cubs $3.26 million