Major sports leagues earn BILLIONS of dollars every year. That money comes directly from YOUR cable bill.

How Roger Goodell Gets 30 Cents Of Your Cable Bill

NFL Commissioner Roger GoodellYou probably didn’t know you were paying National Football League Commissioner Roger Goodell 30 cents a year.

This assumes, of course, that Goodell’s $30 million annual salary comes directly from the $1.1 billion per year — soon to be $1.9 billion per year — that ESPN pays the NFL to air Monday Night Football and to have access to the league and its players. (And why not? Part of the NFL commissioner’s job is to negotiate TV contracts.) 100 million people subscribe to ESPN, and you’re probably one of them. $30 million / 100 million = 30 cents. Thus, you’re flipping three dimes at Roger Goodell every year, whether you watch Monday Night Football or not.

Of course, that’s not the only billion-dollar TV contract that Goodell has negotiated, which is one reason why the NFL box on this site’s front-page app might seem a bit lower than it should be. The app only accounts for the ESPN deal and the NFL Network’s carriage fee. It doesn’t include the deals the NFL has with CBS, Fox, and NBC, largely because those networks air NFL games on over-the-air network TV, which is supported entirely by advertising — and how. Two years ago, a 30-second spot during an NFL game cost $347,800. That number is probably going up this year, too, since NFL games get the best Nielsen ratings on network TV

Why? Because NFL games, like most sports, are appointment television. Dramatic shows don’t lose their value if they aren’t watched right away. Viewers can record them on DVRs or wait until they show up on Netflix or Hulu Plus or Amazon Prime, and they can enjoy them at their leisure. NFL games, on the other hand, are unique events that won’t be repeated. Once they’ve happened, the final score has been published, and nearly all the drama is gone.

That’s one reason why Super Bowl XLVII was the highest-rated program in television history — and why the average cost of a 30-second commercial during Super Bowl XLVII was $4 million. The dynamics of over-the-air ad-supported TV work exceptionally well for pro football, and despite the fact that the NFL gets more money from ESPN than any other network (including its own), the league still wants to put its games in front of as many eyeballs as possible. How has boxing done since its biggest events moved to HBO and pay-per-view? Exactly.

So just how much money does the NFL get from TV contracts? The current deals expire in 2013. Here’s how those numbers stack up:

Network Rights Fee
(in millions)
ESPN
$1,100
CBS
$620
FOX
$725
NBC
$650
TOTAL
$3,095

Take out the commissioner’s $30 million salary, and those deals will bring all 32 teams $96 million each. The NFL salary cap for 2013? $123 million, not including player benefits, which add up to about $22 million per team.

That should be well covered for the 2014 season…

Network
Rights Fee
(in millions)
ESPN
$1,900
CBS
$1,000
FOX
$1,100
NBC
$950
TOTAL
$4,950

Take Goodell’s $30M out of that total, and suddenly, every NFL team gets $152 million in TV money. Player salaries and benefits are projected to be about $150 million in 2014. This means that Roger Goodell has managed to pull enough money from the top four TV networks to cover not only his own salary, but the salaries and benefits for every single player in the league. All that money from ticket sales, team sponsorship, video game licensing, merchandising, NFL Network, NFL Sunday Ticket, etc.? Some of it pays for the coaches, NFL front office staff, lawyers, and friendly PR initiatives like Play60. The rest of it finds its way into the owners’ pockets.

An oversimplification? Perhaps, but I suspect those owners are okay with Goodell siphoning those three dimes a year from every cable and satellite subscriber in America. For as much money as Goodell is putting in their pockets for the rest of the decade, he’s been worth it.

Speaking of NFL Sunday Ticket, DirecTV is currently paying the league $1 billion for exclusive rights to that package. That deal expires after the 2014 season, though, and it appears that DirecTV might not renew. But that’s a topic for another day…

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