Friday, March 18, 2011
Crunching numbers on NFL pay reductions
By Mike Sando
Recent stories about NFL teams reducing salaries for assistant coaches by 25 to 50 percent raised a couple of questions:
- How much are teams saving?
- How much do those savings help teams relative to how much the reductions hurt coaches?
Let's make some educated calculations. First, though, we'll need some financial parameters.
Larry Kennan of the NFL Coaches Association says assistants earn from $25,000 to $2 million annually, with the average between $350,000 and $375,000.
Let's use that $350,000 figure for the sake of this conversation. Let's assume a staff has 20 members.
Twenty times $350,000 equals $7 million per year, which equates to $583,333 per month.
Let's assume a team reduced that pay by 25 percent during the course of a lockout.
The team would be paying $437,500 per month for that same 20-member staff, a savings of $145,833 per month.
Let's say a lockout spans five months.
Our mythical NFL team would be saving $729,167 over the course of those five months. That is less than three of four NFC West teams paid their long-snappers in base salary last season.
In fairness to teams, assistant coaches signed contracts with lockout clauses allowing for pay reductions. Teams are acting within their rights.
The issue isn't necessarily whether teams can afford to pay $729,167 for assistant coaches during a lockout. We could use similar calculations to justify any number of expenditures that might not make business sense.
I found the perspective helpful nonetheless.