Monday, January 31, 2011

NFL Players Are Underpaid [Mondays with Gus]

Mondays with Gus! I'll hit you with something tomorrow somewhat related to this piece.

Before I start, I want to let you know that I am actually an expert (of sorts) in this field. My undergraduate degree is in Management and Human Resources, while my professional work has been in financial analysis and financial planning. I have studied the NFL pay structure and am of the opinion that the NFL players are grossly underpaid.

Typically, fans see the salaries of the highest paid players and assume that all players are paid handsomely. This is not the case. The average NFL career lasts 3 years, and career earnings are commonly under $1 million. This is significant because the NFL essentially provides no health insurance for it's players. Think about these guys that retire because of health concerns (most of them), and have a medical record a mile long due to injuries. It's not easy to get a good rate on health insurance, if they can get it at all. Since they retire before age 30, they're looking at easily $500,000 in medical costs in their lives. That's pretty rough for a person that will net under $600,000 after paying taxes on a grand total of $1 million in income (in most cases).

The fact of the matter is, many of the guys that can even make it to the NFL are ending up losing more money than they make. Between the false impression that they're rich (agents have to make them feel like they've signed a rich contract to keep clients), and the social stigma that goes with everyone thinking you're rich because you make six figures, it's no wonder so many NFL players retire into bankruptcy (78%).

Try working for a billionaire, being coached by a millionaire, and having your agent tell you you're going to be filthy rich very soon and you can see that the NFL is going to have a tough time telling these players they shouldn't go on strike for better conditions next season. The bad part for the NFL is, if they don't pay the players then athletic kids (and intelligent parents) will surely flock to the NBA and MLB. The NBA has already talked about expanding over 30% over the next 10 years, partly because of this (success of basketball in Europe being another reason). Concussion risks are coming to light, and now the NFL is telling the players to suck it up and add another two games to the schedule.

Enjoy the Super Bowl this year, folks. Really sit back and appreciate the fun that is two tough NFL teams going at each other. Because, in all honesty the NFL may have peaked and we may end up sounding like old timers when we talk football. When we say “The NFL was the biggest sport in America” it might sound like me when I say “When I was a kid there were only three flavors of Gatorade!”

Please, enjoy the Super Bowl. We might have to wait two years to get another one.

-Ghassan Rafeedie

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