[quote=scaredyclassic][quote=CA renter][quote=livinincali]The trick to getting rich. Get a little bit of money from a lot of people.[/quote]
Yes, and do so without them really knowing it.
Back in the day, athletes had to have real jobs during the off-season because they were paid primarily from ticket sales. Today, they are paid primarily from advertising dollars. That way, people who couldn’t care less about sports (people like myself) are forced to pay the multi-million dollar salaries of professional athletes and entertainers. Millions and millions of dollars to run around on fields and throw or kick balls. And people complain about cops, firefighters, and teachers. š
It’s all about advertising dollars, and these are paid by those of us who simply shop for our daily necessities. It’s not about how much attention we pay to these entertainer/athlete knuckleheads, it’s about getting the rest of us to pay for them through media/ad sales.
I wish their salaries were only paid by those who watched sports. In my ideal world, they would make all their money from ticket sales and sports-only channel subscriptions.[/quote]
well, the advertisers beleive you are more into sports than you are. but collectively, on average, i guess we are pretty into sports. if the advertisers are laying out that much money, someone must be responding. I would like to see a graph on the number of sports endorsements, back from the days when i think it was just hank aaron telling me to eat my wheaties…[/quote]
A historical perspective of the NFL:
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The league receives more than $2 billion a year from its television contracts alone and rakes in billions more from sales of tickets, advertising, and merchandise.18 A hard salary cap on player contracts, which fixes spending on players’ salaries at 59.5% of gross revenues, all but guarantees profitability for even the worst NFL teams while allowing the players to enjoy an average salary of more than $1.4 million a year. Most NFL teams play in palatial stadiums whose ever-increasing construction costs have been paid for, in whole or in part, by the taxpayers of the localities the teams represent. Pro football is not only America’s most popular sport; it is a veritable cash machine.
But it wasn’t always so. The NFL’s incredible wealth and popularity is a comparatively recent phenomenon. The league’s origins were humble in the extreme, and through its first several decades, the NFL struggled merely to achieve basic financial stability and sporting credibility.
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Rozelle’s most important insight was to see that the NFL’s future would be intimately bound up with the rise of television as America’s most important medium of popular culture. Unlike baseball, which was always better experienced live in the ballpark rather than on TV, football naturally made for good television. The game’s highly concentrated bursts of violent action fit neatly into a single camera shot. The do-or-die nature of third downs provided frequent peaks of dramatic tension. Even the game’s frequent timeouts and stoppages in play provided plenty of breaks in the action, which could be filled with commentary from popular announcers or revenue-generating commercials. In Rozelle’s mind, it seemed obvious that football and television were practically made for one other.
But NFL owners, who traditionally made their profits almost entirely from the gate revenues generated by selling game tickets, initially viewed TV as a curiosity at best and a threat at worst. If people could stay home and watch the game for free on television, some owners reasoned, why would they pay good money to come out to the stadium? But Rozelle foresaw that television could not only grow the game by exposing the NFL to fans unable to attend in person, but it could also provide its own significant revenue stream by allowing the league to sell valuable broadcast rights and advertisements.
In 1961, Rozelle moved the league’s offices from sleepy Bala-Cynwyd to the epicenter of America’s growing media and advertising industry: New York City’s Rockefeller Center. Almost immediately, he struck a pair of deals that changed the NFL’s economic fate forever. First, he convinced the league’s owners (and Congress, which had to approve a special exemption to antitrust law) to agree to a new revenue-sharing plan that allowed the NFL to sell its league-wide broadcast rights as a single package then distribute the proceeds in equal shares to all teams. The NFL’s unique (and, critics charged, vaguely socialistic) revenue-sharing plan guaranteed that small-market teams like the Green Bay Packers could remain financially competitive with teams located in larger and more lucrative media markets; the economic parity thus established helped to maintain the on-field competitive balance that has long distinguished the NFL from other sportsāmost notably Major League Baseball, where cash-strapped small-market teams typically know before the season even begins that they have little or no chance to compete against wealthy ball clubs like the New York Yankees.
Having secured agreement to his revenue-sharing plan, Rozelle quickly followed up by negotiating the NFL’s first league-wide TV deal in 1961. The CBS network paid $4.65 million a year for the right to broadcast NFL games through the 1962 and ’63 seasons. Under the revenue-sharing plan, that meant that each NFL team would begin the season with $332,000 in the bank. Since $332,000 was more than most teams’ payrolls at the time, that meant that all NFL franchises were virtually guaranteed profitability, even before playing a single down or selling a single ticket. It took Pete Rozelle less than one year to prove the worth of his TV-centered economic model to the league’s owners.
The NFL has never looked back. Over the years, the value of the league’s television contracts has grown exponentially; the current six-year deals with NBC, CBS, Fox, and ESPN, which are locked in through 2011, will pay the NFL’s 32 teams a staggering total of more than $12.7 billion.19
