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SBJ/July 21-27, 2014/FinancePrint All
Editor’s note: This story is revised from the print edition.
Each NFL team will get a 20 percent increase in national television money this year compared with 2013 — up $27 million — as a result of the new TV contracts that commence next month, according to sources who have seen the internal figures. Over the following two seasons, the increases will total an additional $23 million per club, at a minimum.
That means by 2016, each NFL team will bring in at least $181 million from national TV alone — more than enough by itself for teams to cover their salary cap expenses.
In 2013, each NFL club received $131 million in national TV money, which includes revenue from the league’s three network partners (CBS, NBC and Fox) as well as ESPN and DirecTV, the sources said. The increases set for the coming three seasons reflect current amounts owed by DirecTV but not any potential increases from a renegotiated deal that is in the works but not yet completed.
With a redone DirecTV deal, that minimum $181 million for 2016 could become a sum in excess of $200 million.
It’s also unclear if the figures provided include the new, one-year deal CBS signed for Thursday night games this year. That deal pays the NFL $275 million, or $8.6 million per club.
But even at the low end, the money NFL teams get from the league’s national TV deals is greater than the salary cap amount.
In 2013, for example, the cap was $123 million. This year, it is $133 million, the first major increase under the collective-bargaining agreement signed in 2011 — but well less than the $158 million in national TV money each club will get for the coming season, sources said.
A source close to the NFL said player benefits also need to be accounted for, so the cap is not the entire picture. “There are several components involved in calculating the cap, including player benefits,” this source wrote in an email. “The increase in total player costs from 2013 to 2014 is in line with the percentages stipulated in the CBA. The salary cap figure represents a portion of total player cost, which is the key figure.”
The NFL Players Association did not reply for comment.
Player costs can vary per club, depending on when bonuses are timed as well as travel costs and workers’ compensation payouts. The Green Bay Packers, for example, the only team that makes its financial data public, said earlier this month that in the fiscal year that ended March 31, 2014, player costs rose $35 million, to $171 million, largely because four large signing bonuses from two seasons fell into the fiscal year. However, for the fiscal year that will end March 31, 2015, Packers President Mark Murphy said he expects a reduction in player costs, even with the cap increase. That means that for the Packers, national TV money by itself next year will all but cover total player costs and perhaps might do so fully with a redone DirecTV deal.
The NFL in 2011 signed new deals with NBC, Fox and CBS, taking the deals that ended in 2013 through 2022. The average price paid annually from the three deals rose from $1.9 billion to $3 billion collectively.
Earlier that year, ESPN agreed to pay $1.9 billion annually for “Monday Night Football” in a new deal through 2021. Its original deal also expired last season.
DirecTV’s deal has one season left under its four-year agreement that sees the company pay $1 billion annually on average, which comes to $31.25 million per club.