What Makes Football So Lucrative?

bleachers, soccer field, stadium

Finances are always a topic of interest among a wide array of groups and communities. From individuals working on their own personal wealth growth, to venture capitalists and angel investors scouring the market for the best and brightest of the start up entrepreneurs, to big banks, and even trends in decentralization like cryptocurrency.

However, one of the largest industries in the world is that of professional sports. There are a lot of financial factors that come into play when considering all of the money that moves in and out of hands in the world of sports. For instance, the ticket prices for a live event, the amount of money that comes from corporate sponsors and annual box-seat reservations, to the cash flow represented by merchandise and memorabilia. In that same flurry of financial activity, is the player’s salary as well. 

Different professional sports organizations take various approaches to player salaries. The NBA and the MLB, for instance, don’t employ a salary-cap, whereas the NFL does. That said, however, certain NFL players still earn astronomical contracts. This is partially dependent on the position played, and the level of talent achieved.

For example, starting quarterbacks are typically the highest paid position on any active NFL roster. This is easily demonstrated by Kyler Murray’s recent contract extension which is valued at over 40 million dollars per year. 

Other positions that can see top dollar in the NFL include the left tackle, who accounts for a lot of quarterback protection, top wide receivers, and of course, stud running backs. Why these players get paid so much, is a product of many factors and variables, some of which are explored further below. 

The Money Making Machine

The NFL is undeniably a money-making-machine. Tom Brady, one of the most decorated athletes in all of sports, has an individual net worth of approximately 250 million dollars. Compare that to the lowest price of an NFL franchise being around 2.2 billion dollars, and the magnitude of the professional sports industry starts to come into view. 

Understanding the scope of the NFL as an organization, can help put player salaries into perspective. When the overarching organization is worth billions of dollars, it doesn’t feel as shocking that salaries would be in the millions. Especially for star athletes. 

Furthermore, the NFL is very aware of their money-making opportunities, and does a very good job of taking advantage of profitable situations. From stadium upcharges on foods and drinks, to player-merchandising, to capitalizing on advertisers and marketing opportunities, the revenue streams that funnel into the NFL are far-reaching, diverse, and very well established. 

In some ways, it’s only fair that player compensation matches the magnitude and scale of the organizations profiting from the talent of the athletes in their employment. This was a big point of contention in college sports specifically, until recent rule changes were implemented. 

The rule changes in place allow college athletes to seek partnerships and sponsorship in order to earn from their hard work, dedication, and talent. This is why up and coming athletes, like high school recruit Nico Lamaleava, is already worth $784,000 and there have been some whispers about his receiving a NIL deal of close to 8 million dollars. 

Fans, Talent, and Personality

When it comes to player salary, there are a few other factors that come into play as well. Talent is one of the most important pieces of the puzzle when it comes to headline contracts and salaries of NFL players. However, fans and personality can have a significant influence as well. 

The recent Kyler Murray extension is also a good example of this. As a younger quarterback in the league, there has been a lot of speculation about Kyler’s long-term talent. However, he’s maintained his composure, and proven enough of himself on and off the field in order to earn a major headline contract. 

Considering Length of Career

Another important consideration to take into account when thinking about the size of NFL salaries is the length of the average NFL career. American football is a very physically demanding game, and athletes are prone to much shorter careers. 

Again, this is a little bit position-dependent, as we see Tom Brady defying everything we know about age and the NFL as he’ll be entering the 2022 season as a 45 year old quarterback. 

Injury Risk and Media Exposure

Part of the reason that most NFL careers are significantly shorter than careers in other industries, and even compared to certain other professional sports, is that there is a constant risk of injury. 

Finally, something we rarely consider when thinking about factors that play into an NFL athlete’s salary, is their level of media exposure. They’re constantly under fire from various organizations, the press, and other forms of media. These added responsibilities and duties all come into play when calculating the final number. 

Wrapping Up

The NFL and other professional sports organizations are money making machines. The player salaries are merely a result of the astronomical volume of money pumped into the overarching organization.

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