By Jamison Cook
The Draft is a big moment for all
thirty two National Football League teams.
Here in the Draft, they can pick the new cornerstone of their franchise,
or end up picking a bust that plays three games before he gets cut from the
team. All of the teams understand the
importance during these few days during April.
Depending
on when you get drafted directly correlates to how much money you make. The first round draft pick will make a lot
more money than a rookie drafted in the fourth round. First rounder’s can make around ten million
on average, while later picks only make around one million. Now this seems like it is a lot of money for
most people, but the players are making all their salary in the average career
expectancy of 4 years. So while other
people make the earnings spread out through their life and never get 6-digit
checks, these rookies don’t know how many of these checks they will be getting and
this could be their only source of income for their entire lives.
While
the players get their checks, the league is the one that is handing them
out. The league created about 9 billion
dollars in revenue last year and how they split up this money is very
important. At just about half of the
total income is distributed to the players and coaches and staffing of the
franchises. So when the teams draft a
player with a top pick they have to make sure that their pick will pan out and
become a productive player. If the
player does not live up to their expectations (JaMarcus Russel, Ryan Leaf,
etc.) they become a huge waste of money for the team. The team will pay them a contract for
millions of dollars and they might not even start a game for them. This causes big problems within the franchise
as it takes up a lot of cap room that teams have to get other players that will
be better, and they are cap penalties if they cut the player and then they have
to pay even more money. Economically,
that is a bad way to run an organization.
Here is a graph that depicts the
value of draft picks. On the Y-axis is a formulated equation that puts a number
value on overall performance, and on the X- axis it shows when the players were
drafted. As you can see, the earlier
someone is drafted, the more likely they are going to have a successful
career. This means that franchises for
the most part have been making good decisions.
However, there are some fluxes in the graph where some top picks over
the years haven’t done as well but they still out perform their draft class for
the most part. Also by looking at the graph you can see that
the later a player is picked, his performance is significantly lower. All in all, the NFL is a business that has to
deal with economics and the Draft is a prime example of the type of economic
situations this league experiences.
I think this is an interesting topic to choose, but I like it. I didn't know that the league created around 9 billion dollars last year. I watched an interesting show that had to do with this topic and how new players in the league blow all of their money right away. No one teaches them how to spend or save there money appropriately, and even though this is bad for the players themselves, the increased spending could improve the economy greatly. By blowing a large sum of their paychecks on the economy, the players boost the economy significantly and are able to raise the percentage of higher paid Americans. It's interesting that no one helps the players with their paychecks and how to handle them, but unless the players declare bankruptcy, the economy is still boosted from an increased spending percentage.
ReplyDeleteI agree with what you are saying Jeremy, although this is very dumb of these players to do, but there really isn't anything better for the economy, besides millionaires spending all of their money on american products. The only problem here is many of them are spending a large sum of their paychecks on foreign cars, clothes, etc. Which really is not helping our economy.
DeleteJeremy, the league does try to help the players and they have assemblies with all of the incoming draftee’s. This is more behind the scenes but they have former players speak to them about how to spend their money wisely. They go over things like savings plans, how to not lend money to “friends”, and how to not get too competitive with spending their money at the clubs. The large amounts of money they blow does technically boost the economy but it is not financially smart on the players part.
DeleteThis is really interesting and I didn’t really think of the NFL draft this way. Where does the 9 billion dollars in revenue come from, and where exactly does the other half of the money go if half of it goes to players and coaches? Also, what happens if a player gets hurt if they’re a top draft pick? The NFL draft sounds like risky business because you can’t necessarily gauge how long someone will be playing, especially if they end up getting hurt.
ReplyDeleteThis is a very interesting topic, that's insane that they've generated 9 billion in revenue, and I to wonder where they get all of that from, especially because you said some of the players are a bust and they lose money at times. It is pretty sad that someone might actually live a bad life if there drafted in the fourth round, because if they do get cut, like you said it might be the only money they earn their entire lives. It seems like you need to be a pretty good economist to handle all of this draft business, especially because you can't only be good with money you have to know your players and if they will perform and be a good investment.
ReplyDeleteIn the NFL or any other professional sport their revenue comes from ticket sales, merchandise sales, advertisements and a very large part of the revenue comes from television deals. For example the L.A. Dodgers recently made a multibillion dollar deal with some t.v. broadcasting corporation that wants to include them in their t.v. schedule. In order to lose money the whole team has to be full of downys so nobody will go to games or buy merchandise.
ReplyDeleteI think that the draft seems like a carefully thought out decision because of all the money that is being invested into players. It seems that there's a lot of pressure on the player to do excellent on the team, otherwise the drafters would think they wasted a lot of money. There is a lot of money that goes into football players, teams, games, and events. Sometimes I wonder why they make so much, even more so than a doctor or a politician. The fans that contribute to this large income to the NFL determines the amount that the players will make. I think when drafters are considering who to pick for a team, they take into consideration how much money the individual player will earn for the team. It's a giant cycle of money that all circulates and helps out our economy in the long run.
ReplyDeleteI don't necessarily think that picks should get paid more or not depending on which round they get drafted simply because it's not fair. If all the players are new rookies to the league and haven't put in any time or and work in any games why should they get paid more than someone who got picked the second round? And what round you get picked doesn't always show how much talent you have for example Tom Brady picked in the 6th round compared to JaMarcus Russell who was picked first round as the first pick whose career only lasted three years.
ReplyDelete