How the behavior of the NFL is not unlike a too big to fail bank
Sunday, February 1. The Biggest Game in Pro Football, Super Bowl XLIX. Last year’s champion Seattle Seahawks vs. the three-time champion New England Patriots. An undersized young quarterback against a 37-year old sure thing for the Hall of Fame. Big plays, lots of defense, 60 or more TV cameras, way more than 100 million people out there watching.
All that and Katy Perry at halftime. It’s almost enough to crown the NFL as the King of Sports.
Maybe not so much. It’s instructive to take a look at the National Football League off the field, away from the hype of the Big Game. Here’s the League in 2014, not on the gridiron but on the griddle.
The average NFL player has to scrape by on $1.9 million a year, at the bottom of the heap when it comes to professional sports. The average American household, perhaps the fan base, has an annual income of $52,000. That’s about three percent of the salary paid to the player. We are not considering the top performers at the payroll window – Chicago Bears quarterback Jay Cutler got a seven-year $126 million contract, each of the Manning brothers (QBs) got about $15 million, etc.. Clearly the NFL is Nachos For Life for its players.
What about the bosses, the owners? The average NFL team is worth $1.43 billion and there are 32 of them. So in round numbers, the League’s membership is worth somewhere north of $46 billion. That’s more than then annual budgets for Luxembourg, or Egypt, or Bolivia, or a lot of other countries. The NFL’s revenue last year was in the $10 billion range, and it has declared that it will be a $25 billion business by 2027.
For today’s Big Game, the footballs will be fully inflated and so will the commercial revenues. For the first game in 1967, a 30-second TV spot cost $293,000. Today’s 30-second spot costs $4 million. That’s about 1300 percent inflation. The aggregate (cumulative) U.S. inflation rate is about 600 percent over the same time. The cost of selling us beer and chips has gone up twice as fast as the cost of beer and chips, it would seem. This is the Nifty Financial Lagniappe of pro football.
The NFL is a significant rainmaker for its owners and doesn’t do too badly for its players, but they don’t play most of the year. What do these guys do in their spare time? During 2014, there were 37 players suspended for violating the League’s substance abuse policies. Some of those suspensions were for a game or two, others were for as long as a year. Another 14 players were suspended for other infractions including manslaughter, domestic violence and child abuse.
There are rap sheets for 50 players arrested in 2014 for all kinds of offenses: assault, theft, DUI, public intoxication, possession, battery, resisting arrest. My favorite may be Denver’s John Boyett, “accused of being drunk, head-butting and hitting a cab driver and trying to hide from police by stealing a shovel and covering himself in mulch.”
The $44 million a year Commissioner of the NFL, Roger Goodell, has said that his job is to defend the integrity of the game. The 2014 defense was a little shaky: nobody could be clear about whether or not the League saw the videotape of Ray Rice punching his fiancee. . .the League tried to cap its liability for brain injuries and lingering effects of concussions, but a judge threw out the cap. . .the League will investigate the possibility of ball-tampering by the Patriots, but take no action until after the cash cow of today’s Big Game.
Professional sports is a significant player in the U.S. economy. An estimate from a few years ago put the total at nearly $15 billion, maybe much more than that now.
If this is the whole pie, professional football accounts for most of it. It is an industry that cranks out a product that millions of consumers buy. Perhaps it’s time for the Consumer Product Safety Commission to extend its scope and look harder at the impact of the NFL on the aspirations and awareness of young men.
It was Ohio State quarterback Cardale Jones who issued the now-infamous Tweet: “Why should we have to go to class if we came here to play FOOTBALL, we ain’t come to play SCHOOL, classes are POINTLESS.” Jones helped the Buckeyes win the national collegiate championship and the hot topic is whether and when he’ll turn pro. The NFL can’t wait.