Matt Ottman
Mr. Reuter
Economics
5 May 2014
NFL Draft
One of the most overhyped events of the football year where not a single player is playing on the football field, but instead there are cameras everywhere in Music City Hall in downtown New York City, a paparazzi like environment, as former college football players wait to hear their name called on draft day. The NFL draft will be taking place for three days, May 8-10. The NFL has decided to try and make even more profit than before with the draft now. Before, they would hold the draft over two days in mid-April, usually on a Saturday and Sunday. The draft was moved back to give it even more hype, and last over three days, instead of the weekend. The change happened during the 2011 NFL draft. This draft will be one of the most hyped of all time, and the NFL is expected to make a lot of mula because of it. It does not just affect the league itself, but the players too. Before the NFL changed its draft date to early May, the players were given larger contracts. This was because of the new CBA contract that was signed with the league and the players’ association. If it affects the players, than it certainly has an effect on whichever team drafts the players, because of the rookie salaries that they are allowed to give. These are some of the most stressful days for the teams and the players, but never really for the league, itself.
The NFL holds the draft once a year, and waits about three months after their season is over to hold their draft. This is not like the NBA, one of the top major sports’ leagues in the world, who hold their draft just a couple weeks after their season is over. The NFL milks time off of the clock so that when the much anticipated night comes for the draft, more and more people will tune in to watch the event. This increases ratings, which equals money for the league. ESPN and NFL Network both have production crews at the event, and are able to make money off of them for letting them broadcast at Music City Hall. It is all because of the anticipation of the months waning on the draft. It is really a lot for seeing who our favorite team could draft, considering that there is no guarantee that any of the players can even make a contribution right away.
There is a significant difference between how much NFL rookies can make now. “The 2011 Collective Bargaining Agreement (CBA) changed the way rookies are compensated, especially at the top of the NFL Draft, by implementing a rookie wage scale. Cam Newton signed a fully guaranteed four-year, $22,025,498 deal, including a $14,518,544 signing bonus, as 2011's top pick. Previously, 2010 first overall pick Sam Bradford signed a six-year contract with a base value of $78 million with $50 million in guarantees. His deal is worth a maximum of $86 million through base salary escalators and incentives,” (Agent’s). To put this into perspective, Seattle Seahawk QB, Russell Wilson, who had just won a Super Bowl this past season, will make a base salary of $662,434 next season (Russell). Wilson is one of the most promising QB’s in the league and he will be the lowest paid QB on the Seahawks. The players are not guaranteed the money they used to have, and will have to play to earn their next big contract, instead of having a life’s amount of money before the new CBA deal.
The position a team has in the draft can also affect the salary cap hit that they have. “There is a considerable difference in the cost of the draft for a team at the top of the draft order as compared to a team at the bottom of the order, with the first round selection accounting for about 85% of the difference,” (Money). Teams also deal with having multiple compensation picks, which occur at the end of every round, with not having the team’s record having a role in when the compensation picks take place, and they are not allowed to trade that pick either. Teams that have a higher draft pick, tend to have more salary cap hits because of how talented and high the player is drafted.
The NFL is one of the more highly hyped events, but there is a lot of money that is dealt with, including with the league, the players, and the teams. The minutes are counting down to every draft pick, and money will be thrown around every which way on draft day.
Sources:
- "Agent's Take: The hidden economics lurking within the 2014 NFL Draft." CBSSports.com. N.p., n.d. Web. 6 May 2014. <http://www.cbssports.com/nfl/eye-on-football/24546593/agents-take-the-2011-cba-and-hidden-economics-of-nfl-draft>.
- "Money and the NFL draft." National Football Post. N.p., n.d. Web. 6 May 2014. <http://www.nationalfootballpost.com/Money-and-the-NFL-draft.html>.
I think it is insane how greedy the NFL is getting. It seems to be getting more and more about the money than ever before. They have gotten so greedy that they use the draft to help and boost their ratings to make even more money. I never really looked at it this way and didn't really realize that the NBA draft took place so quickly after the seasons conclusion but knowing this now it is more apparent that the NFL is becoming more greedy every year. I love watching football but as people make more money sometimes they get complacent and I would hate to see the NFL collapse from lack of proactivity.
ReplyDeleteThough your article was very intriguing I think the amount of money the Rookies make in the first years of football is outrageous. I know the position to fill is hard because not everyone can be a football player but they just run down a feel for television; but hey if the team has that much money to spend in order to pick a player they want then why not. When it comes to the draft, waiting that couple extra months is a smart move by the NFL. They grow the anticipation and creates more revenue that way.
ReplyDeleteI would have never thought that a player could make that much money. People think that the amounts are high but these numbers are cray. Signing a single person can be more costly than average people make in a life time. Even at that the outrageous thought that these are average numbers for people to get still seems out there.
ReplyDeleteWilson really only gets paid that much? Wow. Also the money that teams sign with these players for is astounding when the payer could potentially bust. I do wonder how much money the NFL gets from the draft itself, from ads and whatnot. But the hype is really incredible for it and I can see how this can put a lot of money into the NFL as this is shining moment for many teams. It is fun to see who your favorite team is going to pick, but some of the money that gets transferred is quite a huge amount, at least it was.
ReplyDeleteI agree with Collin, the NFL is getting extremely greedy and although I know that everyone is in this to make money, it seems that they are way more concerned about the profit rather than taking care of one of America's most beloved sport. With that being said, I do see positive externalities. This is a huge benefit for New York's economy. Just like the super bowl, this will bring a lot of business to corporations, franchises, and small businesses all over New York. I also was shocked at the low pay Russell Wilson receives. It seems that the NFL doesn't really have their priorities straight.
ReplyDeleteI agree with Collin. The NFL has been thinking way to much about how to make money for themselves that they have forgotten about their brand in the process. They have really looked past all the issues that come up during the season, like head and neck injuries, just so they can make more money. But before they realize it, they are gonna have a player killed during a game because of the helmet to helmet hits that are progressively getting worse. This will lead to a bigger issue on their hands than making money for themselves.
ReplyDeleteFootball players are seen as heroes in the eyes of their fans but the amount of money ta starting rookie can make is outrageous. But at the same time a rookie can rack of the views on a game game because fans are curious to see how he does. So business wise sure its a very sound decision but albeit an extreme one and one sure to provoke jealousy among the general public.
ReplyDeleteClearly the economic impact of the the NFL draft from jersey sales to endorsements for players. The new NFL CBA allows NFL teams to not break the bank on unproven players, and ultimately gives them more flexibility. Even though the players base salaries are not as great they still receive mega deals in the form of endorsement by all kinds of companies. The economic impact of the NFL draft has a much greater impact that the eye can see, but it would be interesting to see from an economic standpoint the amount of total revenue and event like the NFL draft brings in.
ReplyDeleteIt seems weird to me that the drafts are held a few months after the season ends. I would think that the drafts would be done quickly after the season much like the NBA, so that all the people after the super bowl have something to watch in the coming weeks. I also feel like this would work better, because then the teams could hype up all the new players they got in the drafts for a longer time. This might also get more people to buy season tickets if they are a fan of a certain up and coming rookie that has recently gotten drafted.
ReplyDeleteits amazing how much money a football player makes in one game, what he gets in one game I might get in the next 8 years or more. I can understand that it is a high demanding contact sport, and hospital bills can be high, but they still live in huge houses and have 10 cars. With all that money you would think that they would spend it wisely.
ReplyDeleteSigning bonuses should be there for all rookies. There is a large portion of players who come from government subsidized houses and mothers who work multiple jobs to make ends meet. The players deserve to get this kind of money because they have been working for this since they were in high school. Not all players are going out and spending their money on Maseratis and Bentleys, a lot of them are thanking their families through everything they've done for them, with their salary.
ReplyDeleteI couldn't agree more. For a lot of high school students, their motive to go to the NFL and be great is to make money for their family. You always hear stories of inner city kids that have parents that are deep in debt, and that's what pushed them to be better. And if the public is willing to spend he money to be entertained causing these teams to earn this much money, they should be allowed to pay their players this much; they can afford it.
DeleteIf you are good you get a kind of signing bonus from a company, not even a minute after Johnny OVO got drafted by the Cleveland Browns Nike was already tweeting out links to buy his jersey and such. This is just a sort of signing bonus for him and he will already be rolling dough his rookie season. It is a risky investment for Nike to sign players before they even see them in their prime but it has panned out for them in the past with players like Lebron, KD, and Kobe. Money is no issue for them however and signing a popular player like Manziel is a good investment for them.
DeleteI thought it was understandable that they hold off the draft and drag it on in order to create more "hype", I think this is a smart way to make people more interested and eager for whatever it is that is about to happen. This tactic is used throughout the economy in things such as store coupons- they make the people aware of the sale by giving them a coupon but the coupon cannot be used for another two weeks. This makes the customer more eager because they are being forced to wait for something they want. With how much money the NFL draft brings in, it is understandable that they have all these tactics to add even more attention and hype to an already hugely populated event.
ReplyDeleteI would like to disagree with you on, when you said the NBA draft isnt as anticipated as the NFL draft is. I believe more sports fans, know about the big name basketball players rather than all the football players who get drafted. Basketball players names are more recognizable because of March Madness and all the coverage of the players during this time. I like to believe that the NBA draft is more intense and interesting than the NFL. NFL probably does make more money because it last longer but overall the NBA draft is better, in my opinion.
ReplyDeleteI think that one of the reasons that the NBA draft players are more heard of is because there is just less players. I still believe that the NFL draft brings in more money compared to the NBA draft, even considering the anticipation for the NBA draft. Nicely written article Matt.
DeleteIt is kind of unfair that some of these players get paid multitudes more than others. I understand that that is how the world works, but how is that determined? You even said in your post that one of the most valuable quarterbacks is paid the least, which is surprising. It seems to be that it would be much more logical if the more valued players would get paid the most. Since he is good, he should be in higher demand, so it is possible that he could transfer teams so that he will be paid more.
ReplyDeleteThe NFL Draft is one of the most anticipated events in the sports world every year, which gets national attention because no one knows who the first pick will be. Although many reports and mock drafts have Jadeveon Clowney, from this year, that can change in a matter of minutes. Because so many people tune into the NFL Draft, the ratings skyrocket and because of that, the money that TV shows gets, makes it all the more interesting as the NFL Draft winds down after the fourth day. Although the NFL Draft is unpredictable, the amount of attention that it gets makes waves of money because of how many people watch it every year.
ReplyDeleteAlthough I also believe that players are overpaid, it is pretty sad to see that Russell Wilsons contract is so far under the average player. I know he wasn't a early draft choice, he still proved himself in the NFL which many players aren't able to do. All the players that are being drafted are all risks to the team, while Russell Wilson is a guaranteed success for any team. I think it was a good idea to change the draft date, and time span because of the extra money it will bring in. If people think it is absurd and that the NFL should not be doing this, then don't watch the draft or NFL games for that matter. If you don't agree with it, the NFL isn't forcing any single person to partake in any NFL events because they know millions of others will still be watching.
ReplyDeleteI agree, pushing the draft back three months after the end of the NFL season is a great idea. It gives people more time to follow and get interested in it. This in turn urges die hard fans to buy expensive tickets to watch their favorite college players be drafted by their team. They are also bringing in even more revenue from extending it to three days long. Also, it increases the popularity of the NFL association as a whole because people are bound to hear about the draft everywhere.
ReplyDeleteNever new that a football player could make soooooo much in one game. I think that that's ridiculous. Although they work hard, I think that just to entertain people is a little high on what they make. The people that actually make a differences like doctors, engineers..etc should be making just as much but they are not. How is football making a difference in our lives? it's not... so therefore i believe that they should get paid that much. There are people who work their butt off and they don't nearly make as much as a football player and why is that... they too should be recognized just as much as football players are
ReplyDeleteI love the draft. Especially when the Vikings pick up an upcoming star like Teddy Bridgewater. The draft makes people more excited for the season to start so they can see how their new players stack up against the rest of the NFL. I do not think that the players are overpaid. They worked hard to get where they are today and deserve every bit of their money. Go Vikings.
ReplyDeleteFor all that NFL players do and for how talented they are they should really be payed more. I don't really understand why Wilsons contract is a much lower pay than other NFL players. Even though he wasn't an early draft choice he still is just as talented and does just as much as those players that were a first draft choice. However, the change in draft date was a good idea because it's bringing in extra money. Yes, there are many people who disagree with the money that goes into the NFL but there will always be people who disagree with what money is going into. The NFL brings in entertainment and benefits for tons of people every day.
ReplyDeleteIf you think about it, they make the draft a way bigger deal than it really needs to be, just in order to make more money. All the draft is is finding new players to join the squad who aren't always reliable to turn a team around. It seems that some of the players salaries are extremely high, but if you look at how much revenue those players accumulate for the teams, and how much money they make by fans coming to the games, apparel purchased by fans, and food purchased at the games, those players earn their money because they allow the teams themselves to drown in the income.
ReplyDeleteI never really understood the whole draft thing even though I do watch football but that makes complete sense as to why they hold the draft so late in the season. It is easy to see the marginal benefit to holding the draft so late because of all the people that will tune in and make money for the tv companies and the NFL as well. Although, I do think that some of this stuff is not fair. Like you mentioined in your article that you never know how the rookie will do or what they will play, I believe these atheletes are way overpaid for some who just sit on the bench all year. Some of this money could be put back into the economy and help us that way, but overall I thought you had a really good article and was really interesting.
ReplyDeleteIt is interesting to examine how consumer expectations play a role in the demand. If the NFL waits longer for the draft, the ratings will increase, and thus the revenue will increase. However, they probably have to account for a loss in interest, if they wait too long, so it is important to find a balance. In addition, it is interesting to examine how much professional athletes make now, compared to what they made in the past. It seems that professional athletes make a lot more now, than they did in the past, even with accounting for inflation. This could be because of how our culture has changed and how the popularity over professional sports has increased. This increase popularity brings in more revenue, and thus the athletes can be paid more. In addition the demand for good athletes has increased, therefore the price of good athletes has also increased.
ReplyDeleteWow what a great topic! This is awesome and although we wouldn't really think the NFL draft affects the economy, you showed great points that it does! My question though is would if we gave the players less money and distributed the money to other salaries that regular people receive. I totally understand that these players deserve a good amount of money because of all the training and work and talent they have but also, I think they are wayyyyy to overpaid. Would if we cut their cost just by a few million which doesn't even affect them that much and put it towards other things including other jobs, charity, the governments debt??? Now I get that this might be extreme but these players sometimes have so much money they don't even know what to do with it! I do know too though that there are many charity events that players have and give to but maybe the NFL should reconsider how much they are paying their players because its only going to go up with time... I mean Aaron Rodgers makes more than the President of the United States... seems a bit off, right?
ReplyDeleteThe draft really is interesting when you think about it. Waiting three months to make decisions for the next year. Contracts being signed for players and broadcasts everywhere. It brings fans from all around into the area. A new fan base of people joins each team with every player picked. Bringing more income to the city or area. The players do earn quite a high income, but they deserve it because of all the dedication. It takes a lot to become an NFL star. I am excited to see how the new players react to the conditions of the NFL.
ReplyDeleteI never realized just how much money the NFL draft can bring in, just because certain star players will be in the draft. It’s amazing to think that certain players can earn so much money just based on who they are and what they have done to get where they are today
ReplyDeleteI think it's very interesting how the NFL delayed their draft a few months after the season instead of jumping right into it. It was a smart move on their part, because it definitely creates anticipation and makes more people want to watch. It's also interesting to think about how much football players make in a professional team. These millionaire players have the opportunity to play the sport they love while making an amazing amount of money. It's a win-win position for them because they get fame and fortune while also doing what they enjoy. The amount of pay is increasing over the years, but i think that's due to a change in economy rather than increased value in players. There will always be players striving for the NFL title, so they wouldn't need to bribe drafters with more money.
ReplyDeleteThe amount that professional football players are making per year is unbelievably extreme. I would how much is truly going back into the economy, into their savings, or to charity specifically. While this is true, people will want to play football regardless of the amount of money they are making- though it may make a difference were they want to play. The idea to delay the draft definitely does not take away from sports fans, if anything it makes them more excited for it after taking a bit of a break! All of the brodcasting, advertisement and publicity coming from the draft went through the roof more than many fans realize.
ReplyDeleteAgreeing with Miranda's comment, first off great topic; secondly, no talent is worth 22 million dollars. It is ridiculous to even think that they should get a few million for playing a sport. I understand all the sacrifices a professional athlete will have to make to earn this sort of money, however, like Miranda said, the money can go to something more deserving, such as government debt or more charity events. No wonder our economy is shot. It is because we spend so much money and attention on sports and entertainment. Our government needs to cut spending on any influences with entertainment and sports, because I think we can all agree, that this money can go to better use.
ReplyDeleteThis is a very interesting post. I agree with Luke first off I don't agree that talent is worth 22 million dollars. And it's insane how much these players are making to just play football. It's sad to see Russel Wilson making such a little amount of money and he's an above average player. It's funny to just imagine when watching the draft that from the top 5 picks how much money they will get and then 15-20. Its a huge difference.
ReplyDeleteWhen I read this blog post I thought of two things: the benefits that various companies receive from this draft and the ridiculous amount of pay that these athletes receive. Similar to the economic benefits cities gain after hosting events like the Super Bowl, restaurants all over the country, especially sports bars, gain an incredible amount of business on these draft days. Also, going off of above comments I'm not sure that I agree that these athletes should be receiving a higher salary than the president of our country...however, I do believe they should be getting high salaries, maybe not as high as they do though. They don't only entertain by playing these sports and help compete for their teams, but they also bring in millions of dollars through sporting events, advertisements, clothing lines, food and drink industries and many more.
ReplyDeleteI never really thought of the NFL draft as a money making opportunity. But now that I think of it, they must make millions off of it. Plus all of the excitement that all the fans show. So many people watch the NFL draft it's crazy. I think it's pretty unfair that some of the players salaries are so different from each others. Just like you said, Russell Wilson's base salary is way lower than Cam Newtons and he won the Superbowl.
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