Yale Bulletin and Calendar

March 2, 2001Volume 29, Number 21Two-Week Issue

During his talk on the current state and future of professional sports, NFL commissioner Paul Tagliabue pointed out that NFL football is the only sport in which all the games can be seen for free on television. In the future, viewers will be able to enhance what they see using different video and audio selections, Tagliabue predicted.

Head of NFL explains the economics
of running a football league

Salary imbalances between the top 10 players and the other 50 players on National Football League (NFL) teams is one of the many tough issues Paul Tagliabue is facing as he leads the league into the future, said the NFL commissioner during his visit to campus as a Gordon Grand Fellow.

Tagliabue's talk, titled "Professional Sports in the New Millennium," was part of a tea sponsored by Saybrook College held at the President's House on Hillhouse Avenue. About 150 people gathered on Feb. 21 to hear the NFL commissioner, with the audience filling the main parlor and overflowing into an adjacent room.

The NFL's payroll of $2.2 billion in salary and benefits is unevenly divided, said Tagliabue, with an average of $3 million going to each of the top 10 players on the 32 NFL teams. The balance is split among the 50 or so remaining players on each team, he explained, pointing out that most players earn less than $1 million.

"It's a high-risk sport," Tagliabue said, of football. "On one level, it's a tough competition -- hard-fought, real, genuine. On another level, it's entertainment ... And on a third level, it's a business" earning total revenues of $3.5 billion annually.

Despite those high earnings, the NFL is "a not-for-profit, tax-exempt 501 organization," explained Tagliabue, who was the league's attorney until he assumed the top spot 10 years ago. "It's a very complicated business partnership" that shares all television revenues equally among its 32 teams, no matter what the size of their market, and splits gate revenues -- with 60% going to the host team and 40% to the visiting team, he explained.

In fact, 60% of the league's revenues come from television sources, said Tagliabue, noting the NFL is the only sport that makes all of its games available to the public free of charge via broadcast television, and that games carried by cable outlets were also required by contract to broadcast them at no cost. The NFL's revenues come from ticket sales, apparel sales and toys, said Tagliabue, noting that its business interests also include a six-team European league.

The costs of operating a stadium, however, accrue to the host city team and are generally borne by it. "It's generally thought that the community that hosts the home team should be given the incentive to promote," he said. "The less reward on their investment, the less the incentive to invest. The home team has got the cost of running the stadium and selling the tickets, and in the long run, it balances out."

Asked if he regarded the upstart XFL, produced by the World Wrestling Foundation's Vince McMahon, as any threat to the NFL, Tagliabue said no. "I only got to watch about 10 minutes of it," he quipped.

However, the commissioner said that the incredible changes in technology will have an effect on how sports entertainment will be delivered in the future, citing his view that television will be expanded to be more computer-driven, giving viewers the ability to enhance the experience with different video and audio selections.

Asked why there were so few minority head coaches, Tagliabue noted that the league had begun a vigorous campaign to educate the 32 team owners about the NFL's deep pool of talented minorities who are ready to assume a top coaching job among any of the league's teams.

Discussing some of the high-profile scandals involving NFL players in recent years, Tagliabue pointed out that today's players come from different backgrounds than they did 20 years ago. "You'd be amazed at the pressures they're up against," he said, noting that last year, the league stepped up the number of its support programs designed to help players adjust to life as an NFL member. These include seminars that educate players about everything from how to manage their new-found wealth to what hazards to avoid.

The commissioner cited the most recent three cases where NFL players were accused of crimes, resulting in the conviction of one, the dismissal of charges against another and the reduction of charges against the third.

"We weathered a tidal wave of criticism about these cases," Tagliabue said, pointing out that "the best examples of our players are people like Chris Carter and Mike Singletary, who are involved in community service."

-- By Thomas R. Violante


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