In small sports markets across the country, fans can be heard grumbling at ownership for not investing enough in their teams to win. Being in Kansas City as a lifelong Chiefs and Royals fan, I hear (and occasionally utter myself) the complaints on a nearly daily basis. Tell me if you’ve heard this one, “Let’s get a local ownership group in here that cares about our city.” Or how about, “Why didn’t we pay for anybody in free agency this offseason?” For Chiefs fans, the flavor of the year is to blame ownership for passing the cost of stadium renovations onto the fans by not reinvesting revenue into players.
While any of these arguments can often be justified, I wanted to take an objective look at how much NFL teams should realistically be paying based on the size of their markets. In particular, I wanted to compare the size of their payroll to the amount of television households in their respective markets. In other words, the amount they pay out compared to the size of their pool of prospective butts in seats. Looking at the 2011 NFL payrolls by team and the 2011 NFL market TV households allows us to create a “cost per TV household” or CPTV. Each team’s CPTV is then divided by the overall NFL cost per TV household of $65.13 (and multiplied by 100) to create each team’s index number. The bottom line is that if your team’s CPTV index is at or above 100, they are pulling their weight; if it’s below 100, they’re making easier money simply because there are more fans in their market.
What the numbers show is that in most cases, you should be hating the game, not the team, as they say. Take a look….
Try clicking on team names to highlight them on the map. Scroll over a market for detailed information. One small caveat: The large markets with multiple teams (San Francisco bay area and New York) were equally divided by two. Without this, there indices would be 20 points lower.
Key NFL Cost Per TV Household Findings:
* The Packers are just killing it every which way right now; can they lose at anything? Having the smallest market and the 21st highest payroll is good for a whopping $245.11 CPTV. For every $245.11 the Packers spend on players, there is one household with a television in the Green Bay area. I guess they make up for it by selling worthless stock at $250 a share.
* Traditional big spenders Washington, Dallas, Philadelphia, New York Giants, New York Jets, and the Chicago Bears are not pulling their weight relative to their market size. There is a salary cap in the NFL, so there is not much they can do about it, but they have a much easier time because they can spend the same or less than the competition while making much more money off of television, gate, and merchandise revenue.
* The Denver Broncos have found the sweetspot, indexing at 100.2. With a CPTV of $65.25, they are spending just 12 cents more than the overall NFL average!
* Fans of the Tampa Bay Buccaneers should be the least happy on this list. The Buccaneers are consistently among the lowest paying teams in the NFL (second lowest this season), but have the 13th largest television market in Tampa-St. Pete.
Again, the NFL has a salary cap, so this analysis is not meant to determine who the cheapest team in the NFL is. It is more a way to illustrate that the majority of small market owners are paying much more than their fair share to remain competitive with their large market counterparts.
Signed,
Ryan Sleeper+, Online Sports Marketing Guy