Sports and the Economy
By: Emily Forloines & Alex Wenrich
On October 17th, we discussed sports and the economy and who actually benefits economically from sports. The athletes, coaches, front office staff, and the owners are the main individuals who are benefiting from sports finically and they aren't doing too shabby either.
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| Gary Bettman |
The Sports Business Journal released an article about NHL's commissioner, Gary Bettman, who's salary continues to raise even with the recent NHL Lockout. Bettman's salary and benefits skyrocketed to an astounding $8 million for the 2011-2012 season, according to the league's newly available tax filing. During the fiscal year that ended June 30, 2012, he received more than $8.3 million when his total compensation for the previous year was at $7.98 million.
Bettman's salary may seem outrageous but when you compare his to the commissioners of the other big time leagues it's barely anything. For example, NFL Commissioner Roger Goodell is almost at $30 million and MLB Commissioner Bud Selig is estimated at $20 million.
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| Josh Collins |
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| Bill Daly |
Bettman is not the only one making big bucks over at the NHL, Bill Daly who is the Deputy Commissioner is making somewhere around $3.26 million annually and Josh Collins, chief operating officer is bringing in about $2.9 million annually. Daly's salary increased $400,000 from the 2010-2011 season to the 2011-2012 season and Collins' salary also increased $600,000 from the 2010-2011 season to the 2011-2012 season.
According to Coakley's text, each league has become a monopsony, a single buyer of a product or service. On page 374, Coakley explains that if an American college football player wants to play professional football, that player must go to the NFL because that is the only major professional football league. This is seen through the front office staff as well because they only need one of the major positions, such as commissioner. Looking at the leagues as individual monopsonies, this allows the teams to decide exactly what they want which also allows them to bring in more money. Some of the biggest ways franchises earn revenue are gate receipts, stadium revenue, licensing fees, television contracts, and merchandise sales. When a team has such power, they can determine what to charge on everything. This also works when recruiting players and staff members for that team. Teams have been able to pay whatever they want for players, but this can create stacked teams just because one team has more money than the other. This is seen in the MLB especially because they are a league that doesn't have salary caps so the players and free agents can request any crazy salary they please.
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