INCOME INEQUALITY IN THE NFL

May 29, 2008

Last year, the National Football League (NFL) paid an astonishing $4.5 billion in wages to players, however, both the owners and the players' union claim that the lion's share is going to a relatively few stars.  Is there really, as both sides seem to claim, income inequality in the NFL?  And if there is, does it say anything about the gap between the rich and the rest of us in society in general, asks Steven Malanga, a senior fellow with the Manhattan Institute.

Look at the salary structure of the team with the biggest payroll in 2007, the Washington Redskins:

  • The team paid $123 million in salaries to 59 players, including those on the practice squad, over the course of the year.
  • That's a rich pot, but the top quintile, or 20 percent, of the roster took home 63 percent of the money, and the top two quintiles earned 85 percent.
  • The other teams at the top of the salary scale -- the Patriots and the Saints -- devoted 62 percent and 60 percent of salaries, respectively, to a fifth of their players.
  • The team with the lowest payroll in 2007, the Super Bowl-winning New York Giants paid 59 percent of wages to the top 20 percent, and 78 percent to the richest 40 percent of players.

How does this income structure compare with household incomes in the United States?  According to U.S. Census data, the top quintile, or 20 percent of households, captured about 51 percent of total family income, while the second quintile earned about 23 percent off all family income.  Together, that amounts to about 74 percent of all household income.   In other words, says Malanga, income is actually slightly more concentrated in the NFL than it is within our larger society, and there is a bigger gap between the richest and everyone else in football.

Source: Steven Malanga, "Income Inequality in the NFL," Real Clear Markets, May 28, 2008.

For text:

http://www.realclearmarkets.com/articles/2008/05/income_inequality_in_the_nfl.html 

 

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