his month we shall talk about
the richest sports league in the world - the National Football League
(NFL) of USA.
Television
The NFL has the biggest TV contract in all of sports - an 8-year $17.6 billion
contract for the rights to show its weekly games. The contract is so huge that it took
four television networks - Fox, CBS, ESPN and its parent company ABC to meet the amount of
the contract.
The first Super Bowl of the new millenium was held on January 30, 2000. ABC had a total
of THIRTY TWO cameras for this one game, played on a field similar in size to a hockey
field.
Advertisers for this year's Super Bowl paid $2.2 million for a 30
second spot - that's more than $73,000 for each second of advertising
time. The NFL has the highest television ratings of any sport in the US.
League Structure
The NFL had humble origins. On September 17, 1920, eleven owners met at Canton, Ohio to
form the National Football League. The franchise fee for each team was $100.
Presently, the NFL has 31 teams. It is like any other exclusive, rich (and snooty?)
club. 24 out of the 31 team owners have to approve if a new franchise is awarded, or if
any of the existing teams is sold to a new owner.
The league has a full-time commissioner and is headquartered in New York. Each team has
a president and a general manager to look after its day to day operations. Most teams own
the stadiums in which they play.
The latest two NFL teams that were bought had a price tag of $530 million
(Cleveland Browns, 1998) and $800 million (Washington Redskins, 1999).
Only the venerable Manchester United, the English soccer club, was sold at a higher price
of $1 BILLION dollars (1998).
Sharing the Wealth
All teams get an equal split of the NFL's $2.2 billion/year television
contract. That means each team gets around $71 million in television money.
Teams also get a share in gate receipts - 66% to the home team and 34% to the visiting
team. Revenues from luxury boxes and club seats are not shared.
This was the balance sheet of a typical NFL team (Green Bay Packers) for the fiscal
year ending March 31, 1998 (all figures in millions of dollars):
| Revenue |
Expenditure |
| Television and Radio |
$42.5 m |
Player Salaries |
$48.4 m |
| Gate Receipts |
$20.5 m |
Administrative Costs |
$24.2 m |
| Merchandizing |
$10.8 m |
Taxes |
$4.3 m |
| 198 Luxury Boxes |
$4.3 m |
Game-day Expenses |
$2.0 m |
Players
Players are picked from an annually televised college draft, where the best university
football players of the nation are chosen. The team that finished last during the season
gets to choose first and the league champions get to choose last. This ensures that over a
period of time, some measure of parity is achieved.
The average salary of an NFL player is close to $1 million per year. There is a
full-fledged NFL Players Union and the players are given a guaranteed share of the team
revenues. 63.5% of a team's gross revenues has to go back as player salaries. This
contract is valid till 2004, when a new collective bargaining agreement would be signed.
To protect small-market teams, there is also a salary cap of $57.28 million for each
team. This would prevent the high profile teams with the most revenues from getting the
best players by offering them higher salaries.
Closing Thoughts
For our administrators, look at a sports league as an investment in the game. It may
take an entire decade or a generation before it gets profitable, but the seeds would have
been sown for a system that will churn out good quality players.
A National Hockey League in India is eminently possible. All it needs is the will, guts
and vision to achieve the goal.