(4 votes, average: 4 out of 5)
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I’m sitting at home looking at the count down for the Super Bowl to start. Not because I’m a particularly big fan of the Steelers or of the Cardinals, but because many people asked me if I was going to watch it and I needed to find out when it was going to be on TV. I often get asked what is the biggest challenge for me to work in the United States. My answer is: “converting Celsius to Fahrenheit, crossing US customs, and talking about football”. As a consultant, you can’t underestimate the importance of being able to do small talk with clients.
During the Olympics, I wrote a very popular post about incentive compensation for Olympic athletes. We found out that the United States paid $25,000 for a gold, $15,000 for a silver and $10,000 for a bronze. Notice how there is no monetary incentive for athletes who didn’t win any medal. I was thinking, surely Super Bowl winners must have an incentive to win as well; and there is. I found out the historical bonus payouts here.
Super Bowl - Winner/Loser
I - $15,000/$7,500
II - $15,000/$7,500
III - $15,000/$7,500
IV - $15,000/$7,500
V - $15,000/$7,500
VI - $15,000/$7,500
VII - $15,000/$7,500
VIII - $15,000/$7,500
IX - $15,000/$7,500
X - $15,000/$7,500
XI - $15,000/$7,500
XII - $18,000/$9,000
XIII - $18,000/$9,000
XIV - $18,000/$9,000
XV - $18,000/$9,000
XVI - $18,000/$9,000
XVII - $36,000/$18,000
XVIII - $36,000/$18,000
XIX - $36,000/$18,000
XX - $36,000/$18,000
XXI - $36,000/$18,000
XXII - $36,000/$18,000
XXIII - $36,000/$18,000
XXIV - $36,000/$18,000
XXV - $36,000/$18,000
XXVI - $36,000/$18,000
XXVII - $36,000/$18,000
XXVIII - $38,000/$23,500
XXIX - $42,000/$26,000
XXX - $42,000/$27,000
XXXI - $48,000/$29,000
XXXII - $48,000/$29,000
XXXIII - $53,000/$32,500
XXXIV - $58,000/$33,000
XXXV - $58,000/$34,500
XXXVI - $63,000/$34,500
XXXVII - $63,000/$35,000
XXXVIII - $68,000/$36,500
XXXIX - $68,000/$36,500
XL - $73,000/$38,000
XLI - $73,000/$38,000
XLII - $78,000/$40,000
It’s interesting to see that winners AND losers will earn some money. Every player will receive a minimum of $40,000. With around 52 players on each team, the total bonus amount will exceed 6 million dollars! But in perspective, that’s not so bad…
Interestingly enough, the Steelers had the highest median salary in the NFL at $1.1 million in 2006. The NFL’s average salary in 2006 was 1.4 million. Since that no matter if a player wins or loses he is sure to take home $40,000, the monetary incentive to win is “only” an additional $40,000… in other words, only an average of a 3% bonus over his base salary.
I’m sure the majority of the players don’t even think about such a “small” incentive during the Super Bowl. If the bonus was bigger, maybe they would think about it more, but even if they did, I doubt it would make a big difference. It’s hard to imagine that anyone making it this far won’t give their 100% during the game.
So if the bonus probably does not affect the outcome, why have it in the first place? Because that’s how it has been for the past 43 years. But is that a good reason?
So, what are the bonuses for THIS YEAR? You never did get to that! You went to XLII only.
Hi Bill,
I didn’t manage to find this information. I’ll post it up as soon as it becomes public. The few thousand dollar difference in the bonus doesn’t make much of a difference for my point.
But I would have a guess…
Looking at the trends, we can see that bonus never went down. Also, XL and XLI had the same amounts, as well as XXXVIII and XXXIX… Actually, many years work in “pairs”. Also, given the economic outlook, I wouldn’t be surprised of the actual amounts for the XLIII Super Bowl to be $78,000/$40,000 as well.
Very Interesting!
1) I wonder if the early years bonus was significantly larger as a per-centage of income?
2) The event has changed over the last 40 years. You would think that the main incentive now is the publicity, the championship rings (which probably cost more than the bonus) and the other symbols of that success
Thanks!
1) I think that’s a great point. Apparently the average salary was only 23,000 in 1970 (worth around 115,000 in today’s dollars). http://www.forbes.com/2006/12/22/mvp-nfl-bargain-biz-cx_tvr_1222nflmvp.html A bonus of 15,000 back then represented a much larger bonus as a percentage of the income (65%)! That sounds like a lot… maybe somebody else will be able to confirm this.
2) I have been thinking about that too. The rings apparently generally sell for $3,500 to $20,000. http://www.sptimes.com/News/012601/SuperBowl2001/Getting_the_ring_can_.shtml
The NFL contributes $5000 towards it and the owners pay the rest. But even if the rings were worth much more, I still don’t think that many players would depart with it unless they were in a very dire need.
So in the Comp case - we can probably assume that;
a) The bonus is part of the collective
b) or that it is a bonus that had a significant benefit (65%!) at one time, but has less applicability now.
In other words rust has crept in :-)
As with any planning, sometimes you have to blow off the dust and see if it is still providing value!
Regards,
Elliot
It would be interesting to find out the following:
How do NFL owners pay their executives?
Does the NFL or NFL teams user SPM tools (I think player incentives would be interesting to manage based on their contracts)
How much money do the owners actually make after paying out millions of dollars for 52 to 53 player active players + practice squad players per year?
Regards