Free agency season is upon us in the NFL. It’s the time of year when men with absurdly large bank accounts open up their wallets to sign players with not-quite-as-absurdly large bank accounts. And with that routine, we get the whining from people who call the players “overpaid.” Overpaid? Compared to what?
In case you hadn’t noticed, football is a business. Fans buy tickets (or they watch on TV, which creates a huge advertising market, which creates huge TV contracts). The owners take the money from the tickets and the TV deals, and they pay the players. (Yes, it’s slightly more complicated than that, but you get the picture.) The end result is that people (say, Calvin Johnson) can sign contracts for $132 million. (Of course, keep in mind that the numbers you always hear are really just splotches of ink on paper; NFL contracts aren’t guaranteed and Johnson could very well be cut sometime before his contract expires. Pay attention to the guaranteed number; in Johnson’s case, $60 million. Still pretty good, right.)
To the 99% of us, that sounds like an exorbitant amount of money. And it is. But does he deserve it? Of course he does. The simplest argument is that someone is paying him that money; therefore, he deserves it. His owner and general manager are perfectly happy to pay him that money (well, I’m sure they’d have liked to have given him less, but Calvin Johnson wasn’t holding a gun to their heads and demanding $132 million).
Beyond that, consider how much revenue the NFL is taking in. For example, in 2008 the NFL took in $1.68 billion in ticket sales. (See lots of numbers here.) In 2007, the NFL made roughly $3.7 billion from its TV deals. Throw in licensing, local revenues from teams, and everything else, and the total adds up to somewhere around $9 billion.
$9 billion. Per year. Divide that by 32 teams and you’re looking at roughly $280 million per team. (The NFL shares more revenue than the other sports leagues do, so there’s not as much variation among teams as there would be in, say, MLB.) When a team is making $280 million a season, does paying a superstar $15 million seem ridiculous? I don’t think so. Sure, the teams have various other costs besides player salaries; that’s why there’s a collective bargaining agreement specifying how much money the players are going to get.
Now, I’ve explained how the NFL makes money. So why do the players command such salaries? Why don’t the NFL owners just pay the NFL minimum (a few hundred thousand dollars, if memory serves) to some CFL or Arena League players? For that matter, there are plenty of fans who’d certainly play for minimum wage. (And if you’re a college, you can get them to play for free! But that’s another story.) Why not drag some people off the street, coach them up, and then have them play in the Superdome?
The answer to that is pretty simple. It would be horrific to watch. People want to watch the best football players in the world. And I can assure you, the drop-off between the best players and the scrubs at the end of the bench can be quite drastic. Now, remember that the 53rd guy on the roster was probably the best player at the playground, the best player on his high school team, and probably got a full college scholarship. But he is nowhere near as good as the players ahead of him. A few years ago I was watching a preseason game (Dolphins at Saints) at the Superdome. The quarterbacks for the vast majority of the game were Joey Harrington and Chad Henne. Those were two and a half of the most miserable hours of my life. (On a side note, after that game I have almost never complained about any of the rules protecting quarterbacks. I’ve been spoiled by my years of watching Drew Brees and I do not want to watch a terrible quarterback play for my team ever again.) If the best players weren’t in the league, the quality would be much, much worse. The simple fact of the matter is that the best players, through their talent and hard work, have skills that are virtually impossible to replicate. People complain about how such-and-such a profession is underpaid (perhaps teachers, or policemen, or whatever). That’s because many more people can do those jobs acceptably well. Left tackle in the NFL? Much more difficult to pull off. Sure, maybe you could say that some of the people in those “underpaid” professions “contribute more to society”; but that’s virtually impossible to measure. What you can measure is what people spend their money on. And millions of Americans choose to spend it on the NFL.
The bottom line is that the NFL is an entertainment business. The players are entertainers. Is Taylor Swift overpaid when 20,000 teenage girls pay $100 a ticket to watch her sing? Is Drew Brees overpaid when 70,000 people pay $100 a ticket to watch him throw a football? Is (insert name of movie star here) overpaid when millions of people pay $10 to see him on a screen? There are two ways to approach those three questions. You can either respond with petty, jealous emotion; or you can rationally consider what those people did to inspire so many fans to part with their hard-earned time and money to enjoy the entertainment provided. Would I like it if my Saints season ticket was $100 a season instead of $480? I sure would. Is Tom Benson knocking at my door threatening to break my kneecaps if I don’t buy a ticket? No. If you don’t like the money that Calvin Johnson or Drew Brees or even Taylor Swift is making, then don’t spend your money on them. It’s as simple as that.