In 1969, U.S. News & World Report examined how much further "pro football" could possibly expand. The merger of the NFL and AFL was looming, Monday night broadcasts were on the horizon, and a college star named O.J. Simpson had just signed his first professional contract. No one was sure where else the sport could go from there. Was there anymore profit to be made or had pro football hit its peak?
Super Bowl III, a 16-7 victory by "Broadway Joe" Namath and the New York Jets over Johnny Unitas and the Baltimore Colts, was watched by about 60 million people on Jan 12, 1969; by contrast, 166.8 million watched the New York Giants beat the New England Patriots in 2012.
Even adjusting for inflation, the average ticket price for a regular season game in 2012 ($78) was more than double that in 1969 ($31 to $38 adjusted). The average football player's salary in 1969 of $25,000 would be equivalent to about $156,400 adjusted—far lower than the actual $1.9 million average salary of today's NFL athletes. To put those numbers into perspective, the average U.S. salary in 1969 was nearly $5,900, so football players were making more than four times as much as the average American. Today they make nearly 50 times what the average American does.
Other numbers U.S. News pointed out in 1969:
• Back then ticket sales accounted for almost 60 percent of football's total revenue; today broadcast contracts account for about half of income.
• The average revenue of each NFL club in 1967 was $3.8 million ($23.8 million adjusted); in 2010, average revenues per team reached $261 million.
Professional football clearly did not peak in 1969, but that question is certainly relevant today as Super Bowl XLVII nears. Considering the past season's replacement ref controversy and the flurry of studies over the safety of the game, how much longer can football's dominance continue?
Pro Football's Boom
From Sport to Glamour Industry
Flip on your TV next Sunday and you can see why pro football turned into a gold mine. Packed stadiums and television commercials have made fortunes for owners and players.
Big question: how much higher can the football boom go?
From a struggling sport to a booming, 90-million-dollar-a-year business—
That is the success story of professional football, now opening another record-breaking season.
Businessmen who invested in major-league-football franchises have seen the value of their investments double, triple—or rise even more—in just a few years.
Teams bought in the 1950s for less than 1 million—or in the early 1960s for 4 to 5 millions—now sell for 10 to 16 millions. Examples: the Philadelphia Eagles, Cleveland Browns and New York Jets, whose stories are told below.
Riches for players, too. Football fortunes are being made by players as well as by owners. Young men just out of college have earned hundreds of thousands of dollars in a few years playing pro football.
Gone is the era of the huge bonus, when college stars were lured to pro teams by sums such as the $600,000 guaranteed halfback Donny Anderson by the Green Bay Packers in 1966 or the $400,000 guaranteed quarterback Joe Namath by the New York Jets in 1965.
Big money for O.J. Since the National Football League (NFL) and the American Football League (AFL) agreed in 1966 to a common draft, there is no longer competitive bidding between them for football talent.
Yet O.J. Simpson, a star back from the University of Southern California, reportedly received a guarantee of $215,000 in salary—plus a $100,000 loan—in a four-year contract signed last month with the Buffalo Bills.
Players' salaries have more than doubled in a decade.
Payroll figures are not made public, but authoritative estimates are that the average salary is about $25,000 a year and at least half the players make $20,000 or better.
A few superstars, such as quarterback Johnny Unitas of the Baltimore Colts, are believed to earn in the neighborhood of $100,000 annually.
All this pay is for a working season that lasts less than six months.
More fans, more teams. Attendance is twice what it was nine years ago. Counting postseason playoffs, a total of 8.9 million people attended big-league games last year—11.6 million if you include preseason exhibition games and all-star games. This compares with 4.2-million attendance in 1960.
Pro football keeps expanding. It has gone from a single major league of 12 teams in 1959 to two major leagues with a total of 26 teams this year. Several minor leagues also are operating.
Yet football cannot seem to expand fast enough to reach all its potential paying fans. Even with the number of games increasing from 134 in 1960 to 182 last season—the crowds at each game grow larger year by year.
In the National League, attendance at regular-season games went up from an average of 40,106 persons per game in 1960 to an average of 52,521 in 1968.
In the American League, attendance has gone up from an average of 16,538 per game in 1960—the league's first year—to 37,643 last season.
Countless millions of fans watch pro football on television screens. Estimates are that 60 million watched the 1969 Super Bowl, in which the New York Jets beat the Baltimore Colts for the national championship, and that about 35 million watch games on a typical Sunday in midseason.
The TV bonanza. Football's revenue from television keeps soaring.
In 1963, the two major leagues collected only 6.5 million dollars for rights to televise their games—4.7 million going to the NFL, 1.8 million to the AFL.
This year, TV networks are paying nearly 28 million dollars to telecast the regular season games alone—nearly 19 million to the NFL and 9 million to the AFL.
In addition, about 8 million dollars will be paid for telecasts of postseason title games.
This makes an over-all total of almost 36 million dollars that pro football will get from television alone.
Sponsors pay as much as $75,000 for a single minute of advertising on a football telecast.
TV revenue from regular-season games is divided equally by the 16 NFL teams, so each team is assured about 1.2 million dollars this season. In the 10-team AFL, most teams will get nearly 1 million from TV.
All this is before selling a single ticket to a football game—and ticket sales account for almost 60 per cent of pro football's total revenue. With most tickets selling in the $5-to-$6 price range—some run as high as $10—total gate receipts for the two major leagues this year are expected to top 50 million dollars.
A few additional millions will come from local telecasts, radio broadcasts, food and drink concessions, parking fees and other incidental revenue.
Add it all up, and pro football will probably gross around 90 million dollars this season, compared with a gross of about 65 million in 1965.
That is a growth of 38 per cent in four years. Not many businesses grow that fast.
Prospects: bright. The financial outlook for the season now beginning is regarded as brighter than for almost any year past.
Some clubs, including the Washington Redskins, already have sold every seat available for the entire season. Clubs reporting virtual sellouts include the New York Jets and the New York Giants, the Kansas City Chiefs and the Green Bay Packers.
In 1970, another gain in attendance and income is foreseen as the two major leagues complete a merger agreed upon in 1966. Although each league retains a separate identity, both operate under a central organization. Next year, Baltimore, Cleveland and Pittsburgh will transfer from the National to the American League to create two leagues of equal size—13 teams in each.
This is expected to prove a boost to the younger American League and result in a better economic balance between the two leagues.
Also new next year will be some Monday-night games to be telecast in addition to the usual Sunday telecasts. This will increase the total TV revenue, and likewise the income of each club.
Limits to growth. How much more can pro football expand? How long will this boom last? Can the value of a pro football franchise keep on soaring?
Football owners themselves are beginning to wonder. Some see pro football approaching its ceilings, both in attendance and in TV markets.
Pete Rozelle, who heads both leagues as Commissioner of Major Professional Football, told a member of the staff of "U.S. News & World Report":
"The future of pro football certainly is healthy. I wouldn't say that the boom is over. But we can hardly continue to grow at the same percentage rate as we have in the past."
In television, week-ends already are crowded with football—college games on Saturday, doubleheaders in each professional league on Sunday. Monday-night telecasts are coming. How many more can be added?
The number of seats in stadiums puts a limit on the number of tickets that can be sold. Last year, the NFL sold tickets for 88 per cent and the AFL for 75 per cent of all available seats.
A few new stadiums are being built—in Philadelphia, Pittsburgh, Cincinnati and Dallas. Some others are planned. But the net result will be the addition of relatively few thousands of seats.
Unless prices are raised, there is not much room for growth from ticket sales—and most club owners express reluctance to boost prices much higher.
A cost squeeze. Costs of operating a team meanwhile keep rising at a rapid rate. One team says its costs have gone up 35 per cent in four years.
As in most businesses, a large part of the cost rise is in salaries. The total payroll of a typical NFL club was only about $150,000 in 1939, half a million dollars in 1961, and is about 1.4 million this year. One owner reports his player payroll has tripled since 1961.
Pensions and fringe benefits for players have increased. Now a veteran of 10 years in the major leagues can look forward to a pension of more than $1,100 a month at age 65.
Expansion has boosted travel expenses. It costs an East Coast club many thousands of dollars to go to the West Coast for a game.
The price of uniform and equipment for a single player has risen above $300.
The New York Giants one year paid about half a million dollars to players who could not play because of injuries.
Every time a fan makes off with a ball kicked into the stands it costs some club about $27.
Owners generally insist that the operating profits of a club are small in comparison with the millions invested.
Official figures on profits and losses are rarely made public. But owners of the NFL, for the purpose of negotiating with the Players Association, put together a "schedule of operating income and expense averages" for the 1967 season which provides a general view of football's financial picture.
According to that report:
• The average revenue of each NFL club in 1967 was 3.8 million dollars.
• The average expenses of each club were 3.2 million dollars.
• Average net "operating income before amortization of player contracts and other acquisition costs, other expenses and income taxes" was $635,000.
Some AFL teams lost money regularly in their early years.
These returns are on investments valued at 10 to 16 million dollars.
Lure: love of the game. Why, then, do some businessmen seem willing to pay these ever-rising prices to buy a ball club?
"You've really got to love the game," says Art Modell, principal owner of the Cleveland Browns.
Mr. Modell and his associates bought the Browns in 1961 for about 4 million dollars. The team had sold for about $600,000 in 1953. Today it is estimated it would bring 14 million or more. Yet Mr. Modell told a member of the staff of "U.S. News & World Report":
"Pro football is not a prudent business investment. It is too unpredictable. Operating profits never justify your investment. The only way to make money is to sign your club at a profit—and at a capital-gains tax rate.
"But there is no room in pro football for the smart businessman who is looking to turn his money over in a year or two for a quick profit. He'll get hurt."
Clinton W. Murchison, Jr., who owns the Dallas Cowboys, says:
"You could make more money investing in government bonds. But football is more fun."
A few club owners—perhaps half a dozen—depend on football for a livelihood. Most made their money in some other field, then bought a team.
Next big growth. The main hope for pro football to grow in the future is seen in creation of new teams. Commissioner Rozelle speculates that eventually six clubs may be added to make two leagues of 16 teams each—and that some of the cities brought in may lie outside the continental U.S.
Such expansion, he predicts, is several years away.
Pro football's boom may slow down until that expansion comes.