Saturday night I was over at Mugshots enjoying a tasty beverage. This guy Paul was telling someone about how football will be ruined if they get rid of the salary cap. At first I thought his argument would go to the lack of parity we would see in the next few years if the cap were removed. Instead, his biggest point was that without cap, ticket prices would go up and we would see the attendance levels drop, thus forcing the NFL to use their own network for all games, and cause everyone to purchase the games on a type of Pay-Per-View deal.
I wanted to jump in, but this guy never shuts up, and he definitely gets very annoying the drunker he gets, so I let him continue feeding on his prey (who kept looking at me with the hope that I would help him out, HA! not a chance).
Let me explain what my argument would have been. I used to make the same argument, until I had to write a paper about it for some SpeechComm class at Penn State. What I found shocked me. Turns out that ticket sales really do not have much of an affect on player salaries.
Do not believe me? Well let’s look at some numbers.
Steelers 2007 Team Salary: $103,274,123.
Heinz Field Capacity: 65,050.
It is hard to find what the average ticket price is for a Steelers game, but let’s go with a high estimate of $150. Every estimate I have seen puts the actual number between $75-$100.
Over the course of a season (eight home games, each selling out), the Steelers would make $78,060,000, which almost covers the players salaries. Yet, the teams are always making tons of money. I cannot find how the network deal breaks down per team, but lets go with what I can find. The NFL receives $3.735 billion per year to allow someone to televise the games. I am guessing each team gets a share of that, to be fair, I will just divide that by thirty-two, but I am sure that is not how it really works.
So that gives us an additional $116,718,750. Obviously the NFL gets a huge chunk of that, and the Steelers probably get significantly less, but as you can see, that would pay for the entire team salary. Let us say that the Steelers only receive half of that: $58,359,375.
Interestingly enough, you may think that my point is working out against me right now. Indeed it seems that way, until you start adding other factors into the equation. The ticket revenue probably goes more towards the actual stadium itself. How much does it cost to operate that place? The utility bills have to be outrageous. When I had to write about this before, I had to do it from the side of baseball, which is much easier to show that ticket prices have no real affect on salaries, football is somewhat more difficult since there are only eight home games.
Anyways, I hope you get my point. If I ever had one. That dude was drunk and annoying.