"Look at them Yo-Yos, that's the way you do it..." - Dire Straits
I came across this article today PFA chief backs players' salaries. The article is the PFA (Professional Footballer's Association) Union chief responding to criticism from the new English Minister of Sport.
So the first thing that comes to mind is that we, in the United States, need a Secretary of Sport, a no-joke cabinet position that is dedicated to overseeing the integrity of sports in the US.
The second thing that came up is that the Minister, a man named Gerry Sutcliffe, is spot on, but his scope is off.
The problem isn't limited to the UK; we have it in the US as well. Look at the Boston Red Sox, the New York Yankees and Mets, nearly every NBA team and just about every team in the NFL (although NFL salaries don't seem too astronomical vis a vis the Jeters, Ramirezes and A-rods in the world).
The PFA chief says in the article, "There's so much money coming into the game, surely it's only fair that they get their share of that?" And he has a point, to a point.
The problem of sports entertainment is a systemic problem that stems from, and this is going to blow your mind, our laziness.
Think about the number of sports events you attend versus the number of sports events you watch. Is the ratio 1:10?, 1:20?, 1:100? I know that I am usually good for attending about five live sports events a year, I wish it was more, but it isn't and I deal with it. Whereas, I think I must watch close to 125 or so on TV (that includes Sunday football, March Madness, English Premiership when I can, and NBA and MLB finals.)
The people that run television stations recognize that sports is one of the top five draws of viewers (I made that stat up but it has to be in the top five) to their networks. Plus they attract covetted demographics: Males 18 to 34. All of that means that advertising space during and NFL game is prime real estate. Which is why the networks can afford to pay the licensing fees to the NFL, NBA, MLB, etc,.
The TV companies are making astronomical amounts of money on the selling of advertising space. The owners are making money on the licensing agreements. But here is the rub. Once the players get involved it raises the overhead of the business. Which means the owners have to make more money somewhere else.
Typically most service businesses plan on net payroll to be a little over 60% of their revenues. Sometimes it is more sometimes it is less, but on average that is about the right range. When you start dealing with numbers in the hundreds of millions of dollars the difference between 53% and 54% is pretty large, could be four or five million dollars.
When the owners of teams sit down and plan out there organizations budgets for a year, they have little formulas that they plug numbers and it spits out other numbers. The TV companies and the overarching sport are so in bed with each other that they can't separate at this point. Not even a little bit. Look at what happened to NBC when they stopped carrying the NFL, their sports branding took a real hit and they lost a lot of their talent to other networks. By comparison if the NFL started asking silly figures and all of the networks stopped paying them then the sport would fail, payrolls couldn't be met, profits would collapse and nobody would want to get in the business.
I don't think that the sports industry makes a ton of profit but I think that profit margins of 5% to 15% probably generate millions to the partnerships that run the business, notice you don't see a lot of public sports teams in the United States. So when you raise payroll by 10% you have to come up with that money somewhere else.
Enter my conspiracy theory: I think that TV and the Sports Organizations are in cahoots to make unfriendly stadiums. Here is why:
Guys that run TV production are amazing at what they do, look at shitty sitcoms, they have these ridiculous laugh tracks that are supposed to cue you in on when to laugh. They can stimulate a response from you. Why can't they simulate noise?
Stadiums are very rarely sold out, the exception might be the NFL although there was a Monday night game in Jacksonville where whole sections were tarped off and not being used, New Orleans and Atlanta have trouble filling their stadiums consistently; only teams with entrenched fan bases or teams that are competing for a championship seem to sell out their stadiums all the time. But the fan base isn't suffering.
Look to the sales of HDTV sets. I have had ten or twenty conversations recently that went like this:
I think, and this is the gut reaction here. That every viewer that stays captive on their couch increases the revenue stream for the TV companies. Which increases revenues for the League.
Now this whole thing started out with an article about players wages... wo here is how I bring it around. Do you know who I think is paying the players wages? The fans through gate entries. I think the ticket prices (which the last time I looked for Gilette Stadium were so expensive that I close my web browser) are financing the million dollar salaries of the players. I have heard the argument that players have short career spans than say a real estate agent or a teacher, and I think that is a fair statement so here is my solution.
Let's say that the average upper middle class American makes $55,000 a year on average over 40 years. That means that they make $2,200,000 in their lifetime.
My proposal is to cap a players salary at $3,000,000 a career. That means that they still make a horrific sum of money. But it isn't an egregious amount of money. I mean, Jesus Christ, Manny Ramirez makes what $19,000,000 A YEAR? You can't tell that his entertainment value is worth 9 middle class lifetimes PER YEAR!
If we could get the Players unions, global, to accept a series of contracts that would limit their players to a lifetime earnings of X amount (where X is some reasonable lifetime mean) then we could lower gate prices back to levels where a teacher with two sons could afford to take his sons and their friends to watch a baseball game. And isn't that what sports event should be about?
So the first thing that comes to mind is that we, in the United States, need a Secretary of Sport, a no-joke cabinet position that is dedicated to overseeing the integrity of sports in the US.
The second thing that came up is that the Minister, a man named Gerry Sutcliffe, is spot on, but his scope is off.
The problem isn't limited to the UK; we have it in the US as well. Look at the Boston Red Sox, the New York Yankees and Mets, nearly every NBA team and just about every team in the NFL (although NFL salaries don't seem too astronomical vis a vis the Jeters, Ramirezes and A-rods in the world).
The PFA chief says in the article, "There's so much money coming into the game, surely it's only fair that they get their share of that?" And he has a point, to a point.
The problem of sports entertainment is a systemic problem that stems from, and this is going to blow your mind, our laziness.
Think about the number of sports events you attend versus the number of sports events you watch. Is the ratio 1:10?, 1:20?, 1:100? I know that I am usually good for attending about five live sports events a year, I wish it was more, but it isn't and I deal with it. Whereas, I think I must watch close to 125 or so on TV (that includes Sunday football, March Madness, English Premiership when I can, and NBA and MLB finals.)
The people that run television stations recognize that sports is one of the top five draws of viewers (I made that stat up but it has to be in the top five) to their networks. Plus they attract covetted demographics: Males 18 to 34. All of that means that advertising space during and NFL game is prime real estate. Which is why the networks can afford to pay the licensing fees to the NFL, NBA, MLB, etc,.
The TV companies are making astronomical amounts of money on the selling of advertising space. The owners are making money on the licensing agreements. But here is the rub. Once the players get involved it raises the overhead of the business. Which means the owners have to make more money somewhere else.
Typically most service businesses plan on net payroll to be a little over 60% of their revenues. Sometimes it is more sometimes it is less, but on average that is about the right range. When you start dealing with numbers in the hundreds of millions of dollars the difference between 53% and 54% is pretty large, could be four or five million dollars.
When the owners of teams sit down and plan out there organizations budgets for a year, they have little formulas that they plug numbers and it spits out other numbers. The TV companies and the overarching sport are so in bed with each other that they can't separate at this point. Not even a little bit. Look at what happened to NBC when they stopped carrying the NFL, their sports branding took a real hit and they lost a lot of their talent to other networks. By comparison if the NFL started asking silly figures and all of the networks stopped paying them then the sport would fail, payrolls couldn't be met, profits would collapse and nobody would want to get in the business.
I don't think that the sports industry makes a ton of profit but I think that profit margins of 5% to 15% probably generate millions to the partnerships that run the business, notice you don't see a lot of public sports teams in the United States. So when you raise payroll by 10% you have to come up with that money somewhere else.
Enter my conspiracy theory: I think that TV and the Sports Organizations are in cahoots to make unfriendly stadiums. Here is why:
Guys that run TV production are amazing at what they do, look at shitty sitcoms, they have these ridiculous laugh tracks that are supposed to cue you in on when to laugh. They can stimulate a response from you. Why can't they simulate noise?
Stadiums are very rarely sold out, the exception might be the NFL although there was a Monday night game in Jacksonville where whole sections were tarped off and not being used, New Orleans and Atlanta have trouble filling their stadiums consistently; only teams with entrenched fan bases or teams that are competing for a championship seem to sell out their stadiums all the time. But the fan base isn't suffering.
Look to the sales of HDTV sets. I have had ten or twenty conversations recently that went like this:
X: I don't go to see live sports.
Me: Why not?
X: I have High Def. My house is warm; and soda, beer and popcorn runs me eight dollars for all, not each.
Me: Good point. But what about the experience of being in the stadium.
X: Surround Sound
I think, and this is the gut reaction here. That every viewer that stays captive on their couch increases the revenue stream for the TV companies. Which increases revenues for the League.
Now this whole thing started out with an article about players wages... wo here is how I bring it around. Do you know who I think is paying the players wages? The fans through gate entries. I think the ticket prices (which the last time I looked for Gilette Stadium were so expensive that I close my web browser) are financing the million dollar salaries of the players. I have heard the argument that players have short career spans than say a real estate agent or a teacher, and I think that is a fair statement so here is my solution.
Let's say that the average upper middle class American makes $55,000 a year on average over 40 years. That means that they make $2,200,000 in their lifetime.
My proposal is to cap a players salary at $3,000,000 a career. That means that they still make a horrific sum of money. But it isn't an egregious amount of money. I mean, Jesus Christ, Manny Ramirez makes what $19,000,000 A YEAR? You can't tell that his entertainment value is worth 9 middle class lifetimes PER YEAR!
If we could get the Players unions, global, to accept a series of contracts that would limit their players to a lifetime earnings of X amount (where X is some reasonable lifetime mean) then we could lower gate prices back to levels where a teacher with two sons could afford to take his sons and their friends to watch a baseball game. And isn't that what sports event should be about?
posted by V. at 9:00 AM
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