The Name of the Game Is Money

By Bryjak, George J. | USA TODAY, September 1998 | Go to article overview
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The Name of the Game Is Money

Bryjak, George J., USA TODAY

As players' salaries and ticket prices spiral astronomically upward, it is the taxpaying public that is being stuck with the bill for new stadiums.

If there has been one constant in professional sports over the past 20 to 25 years, it is that owners and players are becoming increasingly wealthy at the expense of fans, non-fans, and taxpayers. In 1976, the average salary of major league baseball players was $51,000. That jumped to $412,000 by 1987 and is well over $1,000,000 today.

About the time baseball salaries began escalating, former New York Yankee pitcher Jim Bouton (in his book Ball Four) stated that, "while the players don't deserve all that money, the owners don't deserve it even more." Many would agree that truer words were never spoken.

In the National Basketball Association, the contracts for superstars already are in the $5-10,000,000-a-year range, with the Chicago Bulls' Michael Jordan (the world's highest-paid athlete) earning $78,300,000 in 1997 ($31,300,000 in salary from the Chicago Bulls and $47,000,000 in endorsements). Jordan's income was 2,202 times the median annual household income of $35,460, and someone working for the minimum wage would have to toil for 7,309 years to make that amount of money. Even subs who rarely get into games are earning hundreds of thousands of dollars.

In 1976, the National Football League (NFL) entered into a four-year $656,000,000 deal with the major television networks that netted each team $6,000,000 annually. By 1990, those contract numbers had jumped to $3,600,000,000, or $32,000,000 a year per team. The latest five-network television contract will enrich the NFL by $17,600,000,000 over eight years, or $73,000,000 per team per year.

People who do not know the difference between a first down and a field goal (and couldn't care less) will be paying part of this multi-billion-dollar tab as TV sponsors/corporations pass on much of this cost to consumers. The price of meals in fast-food restaurants, as well as what Americans pay for soft drinks, beer, tires, cars, trucks, and a host of other products and services invariably will be affected by the latest NFL television deal.

These highly lucrative agreements were made possible by the Sports Broadcasting Act of 1961, which granted every organized professional sport the legal fight to conduct business as a cartel (exempt from anti-trust sanctions) regarding the negotiation and sale of its broadcasting rights. When television income is added to monies derived from tickets, luxury boxes, stadium concessions, and the sale of NFL-licensed merchandise, annual team revenues will be well over the $100,000,000 mark.

Oakland Raiders owner A1 Davis stated that even an idiot could make money with an NFL franchise. University of Texas sports economist Gerald Scully concurs, noting that "all clubs in the NFL make money," even those with the worst records and poorest attendance.

Consider the following the next time you hear that a team is struggling financially, or even losing money. Citing documents made public as a result of the 1992 Freeman McNeil v. the NFL anti-trust case, Jerry Gorman and Kirk Calhoun, in their book on the business of sport, reported that, in a recent year, Buffalo Bills owner Ralph Wilson and Philadelphia Eagles owner Norman Braman paid themselves salaries of $3,490,000 and $7,500,000, respectively. Most people would view these hefty numbers as a profit, but in the accounting logic of at least some NFL owners, self-paid "salaries" are an expense. If professional sports teams are such risky enterprises, why aren't owners rushing to unload their franchises? When teams are put up for sale, why is there never a shortage of potential buyers? The answer to both questions is that owners and owner "wannabees" know that the value of professional franchises continues to escalate. Teams that were worth a few million dollars 40 years ago--in 1962, the Los Angeles Rams were purchased for $7,100,000--currently are valued at up to $320,000,000 (the Dallas Cowboys).

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