6.15.2 National Football League Finances (prospectus)

For my final essay I will be going back to talking about football, but in the aspect of what goes on in the National Football League with its finances. In the past I talked about football in a sense of how literacy plays a part in communication, memorization, and body control. In previous essays I also talked about behavior and how it can change who you are based on your environment, with the way you are conditioned. These topics were chosen because of experience in my personal life of my favorite sport of football, and a subtopic of psychology in human behavior that I find interesting. In my life I have fifteen years of experience playing football, two years of coaching as an assistant offensive/defensive line coach, and countless years of mentoring younger athletes. In this essay I will be doing research to learn more about the financial aspect in football, and I will go into detail into contracts, television deals, sponsorships, and so much more. The goal of this research topic is to shine a light on how the National Football League’s finances are structured, while giving a better understanding on how that money is moving. Literacy topics that relate to my research essay are financial literacy, and communication. Academic fields related to my topic include sports management, accounting, business, and economics.

To begin my research essay I will introduce my topic and talk about some background and how the system has grown so much over time. To do this I will discuss why Canton was chosen as the home of the National Football League Hall of Fame, discuss the meeting that took place between select teams, what made Jim Thorpe so important, and how the APFA, American Professional Football Association, became the NFL. I will also start to talk about how finances have changed by comparing how they were before, to the modern day with all the red tape, and new regulations.

I am writing general to specific in this essay so that I can get a description of how a general item works, such as a contract, then I will be able to give specific information to answer my research questions. This will help me to explain what different things are with what they mean, such as a salary cap, and describing what the NFLCA does.

I am also choosing to write in chronological order in my examples because it will give a better flow and make it easier for readers to be able to understand events in my research paper. They will serve to support facts from scholarly and outside sources to depict a picture of how things are functioned. Sources such as ESPN, Fox Sports, and Power Football Focus, may also be used as they all check their own stats and recordings of events that occur statistically, and with negotiations. To do this I will also use the inclusion of some individual, and some local sports reporters such as, Mary K. Cabot, Ian Rapaport, and Jake Trotter.

The first topic that I will cover in finances in the National Football League is how contracts are structured. In contracts with players I will be discussing the salary cap, performance based incentives, cash bonus, and the way they are paid. The salary cap gives organizations a limit on how much they have to pay the salaries of players each year. A team with a bigger market will not be able to get higher level players compared to a team in a smaller market because of this. Areas with a bigger market open up opportunities for more exposure, leading to more deals, and a higher platform. Performance based incentives are used to influence players to try to play at a higher level so that they can earn more money. An example of a performance based incentive would be if a rookie eclipses more than 1,000 all-purpose yards they will be awarded with an extra $250,000. A cash bonus is usually given at the day that a player signs a contract, after games, or at the end of the season. Everyone of course wants their money as soon as possible. Players and coaches are paid in different ways, as with a job people are paid, daily, weekly, bi-weekly, monthly, and more. With pay you do not always have to be paid in regular United States Currency. Other methods of pay include bitcoin, and other digital currency that has been approved by the league.

The second topic I will cover is how coaches are paid. This will cover salary withholdings, joining the NFLCA, and termination.  The National Football League Coaches Association represents a way coaches can voice their opinions on changes that should occur within the league. Sort of like the NFLPA, National Football League Players Association. When a coach is not performing well the owners want answers unless the team is purposely tanking. Even when this is happen you can tell that there will most likely be a full sweep with coaching along with player transactions in that upcoming offseason,

The third topic that I will be discussing is sponsorship deals in the national football league, before I go into the media portion. Some companies may pay just to get their name on the stadium to give them more exposure by endorsing the team, while some others will use a sponsorship to pay an organization in exchange for something such as getting players to agree to come to public events, or simply use their products. Teams can only use specific organizations and have to be mindful of what they choose as one organization’s guidelines can clash with another, which can lead to a loss in sponsorship.

The fourth topic that I will cover is the price of stadium operations. A lot of stadium operations deal with equipment management. As a fan, it can get expensive to be hungry at a game. It is even more of an issue depending on how much money is spent on a ticket to view a game in person. These concessions are a big way that a venue makes its money back and uses those earnings to pay for other things in the stadium such as better bathrooms, paying the light bill, sewage, upkeep of the gridiron, and so much more. If the ticket prices aren’t fair with the concessions though, it can cause and uproar with the fans and lower attendance. Other aspects of finances in the NFL include travel coordinators, equipment, security, quality control, and more.

Research questions that I plan during my research essay are; How does the salary cap work? How does the front office function? Why are contracts offered with a big bonus and small salary? How much does the draft determine pay for rookies?  Do players and coaches get bonus pay or money for making the playoffs, and Superbowl? What is a penalty? What happens when a player opts-out? How is a budget determined? How does media such as Fox, and NBC affect finances, and coverage? Why are concession prices as much as they are compared to a restaurant or fast food chain? These research questions will be answered under the corresponding topic that it is associated with. This helps me breakdown and further explain each topic in a way that could educate and inform readers about what somewhat happens off the gridiron, namely in correspondence to the financial aspects.

 I will close the essay out by bringing in how everything involves different aspects of literacy and the way it is used. I will reiterate what the main idea is about and further break down my thesis with factual evidence from sources used throughout the essay. The reader will be able to understand how the front office of the NFL manages its finances, and be able to use that information in comparison to other businesses.

ANNOTATED BIBLIOGRAPHY

Brooke, Tyler. “How Does the Salary Cap Work in the NFL?” Bleacher Report, Bleacher Report, 3 Oct. 2017, https://bleacherreport.com/articles/1665623-how-does-the-salary-cap-work-in-the-nfl.

The article “How Does the Salary Cap Work in the NFL?” by bleacher report author Tyler Brooke is about the salary cap in the National Football League. It gives a definition on what it is and gives background information to tell how it came about. In this article Brooke also talks about the constraint of a salary cap. This cap is used to give players contracts and determine the space teams have to offer players a position. In this process players can also be given performance based cash incentives, as well as a bonus.

Eckstein, Jakob. “How the NFL Makes Money: TV Is King, Streaming and Gambling on Horizon.” Investopedia, Investopedia, 30 Jan. 2022, https://www.investopedia.com/articles/personal-finance/062515/how-nfl-makes-money.asp.

The Article “How the NFl Makes Money”, by Jakob Eckstein is about ways in which the revenue of the National Football League is quickly growing. This article also discusses some of the challenges of making revenue in the NFL, and ways in which it can grow stemming back from 2015. This includes streaming on more platforms though television deals, selling rights to companies to sell their products, ticket sales, and even gambling.

Herold, David M., et al. “An application of the sports logistics framework: the case of the Dallas Cowboys.” Journal of Convention & Event Tourism. Vol. 22. No. 2. Routledge, 2020.

This article talks about operations in logistics management in sports. It serves relevance as under the framework of logistic operations comes marketing with ticket prices, the attractions around the events, and so much more. This brings in the explanation of how money is used in sports programs such as the NFL The Dallas Cowboys were used in this study to closely examine how these operations function. It also has a big effect on the fans, and equipment resources.

Klein, Christopher “The Birth of the National Football League.” History.com, A&E Television Networks, 4 Sept. 2014, https://www.history.com/news/the-birth-of-the-national-football-league.

This article gives background on the start of the National Football League. It gives information on why Canton is the place for the NFL Hall of Fame, and what it was originally before it was opened. This article also highlights some of the early struggles of finances in the league as well as other issues. It is stressed in the way of why only specific cities had teams compared to now. It goes over the meeting that originally took place between a select amount of available teams.

Manoharan, Aditya, et al. “Return to play rates in NFL wide receivers and running backs after ACL reconstruction: An updated analysis.” Orthopaedic journal of sports medicine 9.1 (2021): 2325967120974743.

This journal serves to give a lot of relevance to my paper as it talks about the pay rates after a player gets injured. It talks about finances in the way of how a contract can be restructured if a player misses a season because of a major knee injury. Based on the positions studied in this journal, wide receiver, and running back, the level of performance can change drastically as the injury can cause many changes to performance.

Mulholland, Jason, and Shane T. Jensen. “Optimizing the allocation of funds of an NFL team under the salary cap.” International Journal of Forecasting 35.2 (2019): 767-775.

This Journal written by Jason Mulholland, and Shane T. Jensen talks more about the situation of determining the salary cap between positions. This paper tries to help with that by bringing up new ideas and strategies to determine which positions may be more valuable to a team, based on the market value of each position. These authors conduct their research using analytics in correlation to how teams use the draft to fill necessary spots on a roster.

“NFL’s New TV Rights Deals, Explained: What $100 Billion Package Means for Fans in 2023 and Beyond.” Sporting News, 19 Mar. 2021, https://www.sportingnews.com/us/nfl/news/nfl-tv-rights-deals-explained/z4rlycwog3jz1f6pqdqoegbxf.

This short article by Vinnie Lyer explains deals made between the National Football League and media platforms such as Amazon, Fox, ABC, and more. It talks about rights gained between the media platforms in regard to streaming specific games to broadcast for the NFL and the cost of doing so. Each platform gets its own individual games at the cost of millions to billions of dollars. These include games such as the Superbowl, and primetime games such as Thursday Night Football.

Patel, Bunsee. “The Age-Position Effect in the NFL Free-Agent Labor Market.” (2020). 

This article from University of California, Santa Barbara by Bunsee Patel is about how fast players’ careers are over, depending on the position they play based on how physical the sport of football is itself. It goes into length about how these physical contributions change the way contracts are structured with how much money they are worth. It also talks about the difference in pay based on the value of a position itself, rather than just age alone.

Palmquist, Will, Ryan Elmore, and Benjamin Williams. “Fourth Down Decision Making: Challenging the Conservative Nature of NFL Coaches.” DU Undergraduate Research Journal Archive 2.1 (2021): 6.

This article serves to discuss the different methods behind decisions that coaches make behind fourth downs, either aggressive or conservative, as the game is constantly evolving. The authors use play data and analytics of how the game is progressing to determine how a coach will make a decision. It tried to use this data and summary of a game to bring in context to the decision making process.

Paul, Rodney J., Justin Andrew Ehrlich, and Jeremy Losak. “Expanding upon the weather: cloud cover and barometric pressure as determinants of attendance for NFL games.” Managerial Finance (2020).

In this article Rodney J. Paul, Justin Andrew Ehrlich, and Jeremy Losak, conducted a study to see how the weather plays a role in sports events. To conduct this study they looked at different variables such as the history of the team, how much a team is winning, the stadium itself, the general weather, temperature, the amount of rain, and so on. Basketball is not much of a problem because it is indoors, unlike in the National Football League while most games are played outdoors, there are few indoor stadiums.

Staff, Around the NFL. “Browns Announce Trade for Texans Quarterback Deshaun Watson.” NFL.com, NFL, 21 Mar. 2022, https://www.nfl.com/news/deshaun-watson-browns-trade-texans-quarterback-haslam-berry-stefanski.

This article directly from the National Football League Website is about how the Cleveland Browns received Deshaun Watson via Trade from the Houston Texans. It also goes into detail on what the Browns gave up to receive for Deshaun, including draft picks, and the guaranteed money. With that it goes into detail on how Deshaun missed the 2021-2022 NFL season, and his ongoing off the field legal troubles. This shows how contracts can be negotiated, and how a transaction can take place between teams.

Thelen, Paul. “What Exactly Does Each Member of an NFL Team’s Front Office Do?” Bleacher Report, Bleacher Report, 3 Oct. 2017, https://bleacherreport.com/articles/1666258-what-exactly-does-each-member-of-a-teams-front-office-do.

This article by one of the biggest sports news networks in the country, Bleacher Report, is about the career hierarchy in the front office in the National Football League. These positions include the CEO, College Scouts, Pro Personnel, and of course the General Manager. Each position plays a key role in the success in an organization, as they all play a part in bringing in new players/coaches, contract negotiations, and simply making sure they are bringing in the right people to help them improve.