NFL playoffs not a financial score
NFL playoffs not a financial score
The NFL playoffs mean bigger crowds, bigger TV ratings and bigger bunting on the stadium's walls, so it should mean bigger profits for the teams, right?
The professional football league's almost socialistic revenue-sharing policy becomes even more strict in the postseason. Most of the profits from a playoff game go to the league, not the two teams playing on the field.
The league then shares the cash among its 32 teams.
When the Carolina Panthers storm into Chicago's Soldier Field this weekend, for example, each team will get a guaranteed payout of $600,000.
That's far less than during a regular season game, when the home team can earn $2 million or so and the visiting team can get $1 million-plus, according to a shareholder report for the Green Bay Packers, the league's only publicly traded team.
"The playoffs just aren't a financial bonanza," Carolina Panthers spokesman Charlie Dayton said. "You hunt to make them for obvious reasons, but they are not a big profit maker."
Some teams even lose money in the playoffs, depending on how many sponsors they want to foot the bill for entertaining at each game, sports consultants say.
Minor-league teams across several sports experience a similar quandary. There, teams traditionally suffer attendance fall-offs, with little time to promote quickly scheduled games, and continued costs.
Of course, fans shouldn't cry for the Panthers. The team has set records this year for attendance and revenue, and Forbes magazine ranks it as the eighth most valuable team in the NFL. The magazine estimates the team had $24.3 million in operating income in the 2004-05 season.
(The magazine's $35.4 million estimate for the Green Bay Packers' operating income, though, is higher than what the $33.7 million that the team reported to its shareholders.)
And a playoff run boosts profits in the long run, Panthers officials and sports marketers say.
A winning team means more enthusiastic fans, which leads to more ticket sales and more lucrative sponsorship deals.
"Companies like to associate with winners," said William Chipps, senior editor of IEG Sponsorship Report.
While the size of a team's market is the biggest driver for sponsorship prices, the second factor is the team's competitiveness, said Marc Ganis, president of Sportscorp Ltd., a Chicago-based sports industry consultant.
A team in New York or Chicago will likely always be able to charge more to be its official bank or beer vendor, Ganis said. But a winning Panthers team would have more clout over a consistently struggling New Orleans Saints team.
The NFL's financial system has always had a socialistic bent. The league equally shares all revenue from its contracts to televise games. That TV money is generally the biggest moneymaker for teams.
The Green Bay Packers, which is owned by shareholders and publicly discloses its results, reported $84.2 million in TV revenue last season, almost eight times more than it brought in from its luxury suites.
And during the regular season, teams share in the attendance revenue: The home team gets to keep about two-thirds, while the visiting team gets about a third.
But in the playoffs, both teams get only a flat fee. From the total pot of attendance revenue, the home team will subtract the admission taxes and other expenses it paid for the game, keep its predetermined flat fee and then send the rest to the league.
The league will pay for the plane to take the visiting team to the stadium. It also pays for the bonuses that players get for each round.
But the teams are in charge of paying bonuses for their coaches, which are in general about the same as players.
The NFL has no plans to change its system, with its title as the most popular American sport and with all its teams estimated to be reporting healthy operating profits.
"It's been in place for a long time," said NFL spokesman Dan Masonson, "and it's been effective and successful."
What Teams Get
What playoff teams get for playing in each round of the playoffs:
Ã¢â‚¬Â¢ Wild Card: $600,000 (home team) or $540,000 (visiting team)
Ã¢â‚¬Â¢ Divisional Round: $600,000
Ã¢â‚¬Â¢ Conference Championship: $970,000
What Players, Coaches Get
What players and some coaches get for being in each playoff game:
Ã¢â‚¬Â¢ Wild Card (Division Winner): $19,000
Ã¢â‚¬Â¢ Wild Card: $17,000
Ã¢â‚¬Â¢ Divisional: $19,000
Ã¢â‚¬Â¢ Conference Championship: $37,000
Re: NFL playoffs not a financial score
At this point, it isn't about the money, it is about the quest for the best.
Profit sharing is what allows the NFL to prosper the way they do and makes for better competition. It is "team" all the way, team = League. Without the league, none of the teams can survive.
I am surprised that he didn't make a reference to the Giant owner (Wellington M) that dies earlier this season, he was one of the guys that started the concept of profit sharing among all teams. He was surviving in NY and the other teams in smaller markets were folding and it was hard to find teams to play. This goes back a long time.