Wednesday, November 1, 2017

NFL Protesters are in for a Big Suprise

NFL owners are running a business that is intended to earn profit.  They have been extremely successful over the past 50 years, creating a multi-billion dollar industry that looms large in the minds of Americans.  

A number of NFL players have decided to kneel for the National Anthem in protest of the awful, slave-like conditions that have led them to get paid millions and millions of dollars to play a game. 

They expect somehow this will translate into deep and lasting change at the societal level.

These protests will generate lasting change: in their pockets.

The predominantly minority players who are protesting are about to see a massive decline in pay.

As league revenues and TV broadcasting rights revenues have climbed exponentially, so have player salaries.   The minimum salary is over $400k, and the average salary is close to $2MM.

There is a problem, however.   NFL ratings are falling, and the boycott of the NFL in response to the kneeling protest is accelerating that decline.

Ratings in the middle of this season are a disaster, and sales of tickets and merchandise are down as well.

The NFL is about to get a whole lot poorer.   NFL owners are going to have to cut back on expenses. 

Given the cost structure of NFL teams, the only lever that they can adjust to reflect the lower revenue is player salaries.  The cost of the bonds, the stadium, taxes, electricity, and all the things it takes to run a team are relatively fixed.    Only the player salaries can be changed in the short term.

Once the effects of the boycott are felt in the new television contract, the teams will have no choice but to dramatically lower payroll costs. The players that will suffer the most are the ones who are perceived as troublemakers.

The very players who are protesting the gross injustice of playing a game for an average of $2MM will soon be protesting against a much lower salary base. 


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