Football Franchise Owners Salary

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The earnings of a professional football team owner are difficult to determine because all but one team is privately held. However, based on the limited data provided by the one public team, operating profit and capital appreciation can be estimated. Owners of a football franchise gain more wealth through appreciation of the value of the team than through net income or salary.

Operating Income and Capital Appreciation

The majority of a pro football team owner's compensation appears to be from the appreciation of the team's value. Owners have not opened the financial records of most teams to prove hardship. However, according to consulting firm Chicago Partners, the average operating profit for an NFL owner, including operating income and capital appreciation, is about $100 million per year since 2006. Chicago Partners determined this estimate using data provided by the financial records of the Green Bay Packers. The majority of the $100 million is capital appreciation, with operating profits approximately coming in at $20 million per year.

Owners Claim Billions in Debt

Despite increased revenues and profits, many NFL owners claim that their share of the revenue is too low. The owners cite huge debt levels as a key challenge. According to "The Wall Street Journal," NFL officials state that team owners collectively owe $8.5 billion in debt, and must make several hundred million in interest payments each year to financial and insurance companies. This can be a significant burden on a team's owner. According to "The New York Times," the average team has debt payments of $20 million per year.

NFL Owners Claim Profits are Down

According to "Forbes," the NFL claims that the Packers' net income fell from $20.1 million to $9.8 million during the last fiscal year. The Packers are a non-profit entity that is owned by the public -- a unique arrangement with approximately 112,000 shareholders. If the average annual debt burden is $20 million, it is easy to see that some teams may be in financial trouble, which could eventually result in financial ruin.

Warning

The current status of the NFL as America's most popular sport drives the valuation owners are willing to pay for franchises. Lingering in the background of the current labor talks is the concussion problem in football. Football can look to the decline of boxing to see the potential collapse of popularity of a sport. While concussions in boxing did not cause its popularity to decline, the fact that a major sport could decline in popularity so quickly should serve as a warning to NFL owners. If fans learn the sport is inherently dangerous and that concussions are unavoidable, the context of football could change enough that TV ratings will decline, and with it the value of the franchises.

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