NFL 2010: Are the owners losing money on America's most popular sport?

Me, I'm a curious guy. Kinda like ol' Violent Marv from "Sin City," when I don't know something, I go ask the person that does.

By way of a f'rinstance (thanks, Marv), I saw that the Washington Redskins recently signed Donovan McNabb to a $78 million dollar extension, one which pays him something like $40 million in bonuses.

I'm wondering, how on earth can Daniel Snyder afford to pay McNabb that kind of money with the Redskins literally drowning in red ink? Sure, there's a poison pill that lets them off the hook, and now people are running around saying that the $40 million really isn't $40 million and yada yada yada...even if the entire contract is no better than any other NFL contract, if D-Mac plays for the 'Skins for the next five years and meets the escalators in the contract, he'll receive $78 million bucks. Debate the likelihood of it amongst yourselves, but it is possible even if it's not a fait accompli. Where did this extra $40 million, $78 million or whatever come from? Did Snyder have some war bonds that just matured?

After all, if one is to believe the owners and their new "get tough on cash" stance, one must come to the conclusion that every NFL franchise is one empty stadium away from the creditors closing in like a pack of wolves; if we believe the rhetoric, these poor but honest owners are but one Lions game away from chains on the stadium doors until such time as they have properly recompensed their debtors.

I'm thinking that the $40 million in cash earmarked for McNabb would go a little way toward, I don't know, paying some operating costs, a few game checks, something more useful than being thrown at an out-of-shape quarterback who can't properly run the two minute offense, anyway.

Maybe that's just me.

So, I started asking.

Since no one who owns an NFL franchise will answer me (after all, I'm just a Chicago Bears fan, for crying out loud), I went to the internet, that great fount of disinformation. Again, since no one believes anything the internet says (unless, of course, it involves Brett Favre's junk), I used the internet to go to some reputable sources of information, ones that are kinda picky about who edits their information.

Here's what I found.

I went to Street & Smith's Sports Business Daily, and I found that DirecTV($3.5 billion), CBS ($3.73 billion), ESPN ($8.8 billion), Fox ($4.27 billion), and NBC ($3.6 billion) are combining to pay $23.9 billion to broadcast NFL games in deals that either expire this season or next.

$23.9 billion. Over the last five years, the NFL has been paid $23.9 billion dollars to broadcast its games. That works out to $4.78 billion annually. That's one big pie, cut 32 ways. In fact, the pieces are about $149,375,000 each.

The very next question I asked was this: if NFL teams are being forced to do business on such slave wages, how much do those dastardly players get?

Turns out, there's an answer to that question as well.

Did you know that you could download the text, the actual text of the actual Collective Bargaining Agreement between the NFLPA and the NFL? Neither did I, until about five minutes ago.

I found out that there is such a thing as a salary cap, defined in the CBA as "the absolute maximum amount of Salary that each Club may pay or be obligated to pay or provide to players or Player Affiliates, or may pay or be obligated to pay to third parties at the request of and for the benefit of Players or Player Affiliates, at any time during a particular League Year, in accordance with the rules set forth in Article XXIV... "

Last season, the salary cap was $128 million per club. If each club received $149,375,000, and each club was limited to $128,000,000 in salary to players, that left each owner a $21,375,000 cushion to weep into every night. This season, of course, there is no salary cap, which means there's no telling how big the money cushion might be, but I'm pretty sure that no one spent more on salary this season than they did last season, because that nice, firm cap number makes the bean counters' lives soooo much easier.

I didn't count every possible stream of revenue that brings money into the NFL. I only counted the television money. Based on t.v. money alone, the owners made a profit last season.

Oh, and don't run that "operating costs" nonsense at me. I'm not an accountant, I don't pretend to be an accountant, and I know that it doesn't take $150 million annually to operate a football team in the NFL. Shucks, this is a league that won't even hire its referees full-time; do you think the McCaskeys or the Rooneys are paying more than a million bucks total for every person that isn't directly attached to the football team? I guarantee you there's not a team laundry guy in Alex Spanos' organization making six or seven figures a season to wash socks and jocks. Get enough of the right software, and the non-football portion of any team's operation can be reduced to a P.O. box at Mailboxes, Etc., and don't think it hasn't occurred to these guys.

These are the same people who can sleep at night knowing that a beer costs $8.00 in their stadiums, or that the ordinary schmo pays $25 bucks for the right to walk a mile and a half to his nosebleed seats. These are the same people who invented the Personal Seat License, where you basically have to buy the right to buy a season ticket; somewhere in hell, P.T. Barnum shed an instantly-evaporated tear for that one. These are the same people who come out with a new version of the team laundry almost every week, because new jerseys sell; I've never seen as many interpretations of orange and blue in my life as I've seen my beloved Bears wear just this season alone.

These guys have an alleged $78 million to throw away at a Philadelphia Eagles throw-away, but they're willing to lock the doors on the next season if they don't get more money out of the deal.

Count me as someone giving the owners the stink eye on this one. These guys didn't make enough cheddar to purchase an NFL franchise without knowing how to maximize profits while holding down costs, and one of the biggest things any business owner has to hold down is employee wages. I know how much the owners made from television, and I know how much they paid the players. Anyone out there telling me it isn't that simple, fine. Show me an open book of accounting for an NFL team.

Show me where it costs so much to maintain an NFL team, so much that the owners need more. Open the books.

After all, we know what the players are making, and that number is not changing.

Sources:

Street & Smith's Sports Business Daily, Sept. 6, 2007

NFL & NFLPA Collective Bargaining Agreement

NFL Football Stadiums.com