7 NFL Teams Lost Money in 1985, 14 Could Lose in ‘86, Donlan Says

Inflation has been licked, gasoline prices are tumbling and the stock market is soaring, but there may be hard times ahead for pro football.

Seven teams lost money in 1985 and as many as half the 28 teams in the National Football League may be in the red this year, according to Jack Donlan, executive director of the NFL Management Council.

The financial picture for the rest of the decade also looks less than rosy, he asserted.

“I don’t want to be a prophet of gloom and doom,” Donlan said Wednesday, “and I’m not suggesting that we’re at a crisis stage. But we must get a better handle on costs, because I don’t see any important new sources of revenue.”

It should be remembered that the NFL is in the early stages of negotiating a new contract with the TV networks that would take effect in 1987. The league is in the final year of a TV package worth $2.1 billion over five years, and because of what Donlan admitted was poor negotiating with players, finds itself strapped with high costs and relatively fixed income.

An average team spent $15.3 million on player salaries and bonuses last year and another $10 million in other expenses, including training camp, transportation and hotels, Donlan said.

Player costs are expected to increase to an average of $17.5 million per team this year, he said.

The NFL’s television package will reward each team with enough money to pay salaries and bonuses this year, meaning, as Donlan said, that all TV revenue goes to the players.

Teams are losing money, he said, because ticket revenue is not adequate to meet other expenses.

And the problem may be exacerbated if the TV networks succeed in their avowed goal of holding down the size of the next contract.

Assuming that player salaries increase at an annual rate of 15% begining in 1987, the 28 NFL teams would need $3.5 billion in the next five years to meet player expenses, Donlan said.

Will the new TV deal be worth $3.5 billion?

Art Modell of the Cleveland Browns, who will negotiate the new TV deal along with Commissioner Pete Rozelle, declined to speculate.

“I don’t want to engage in saber-rattling,” he said. “This is not a time of crisis. But we do have to pay attention to costs so that we don’t develop a crisis.

“The networks are entitled to earn a profit (on pro football) and we don’t want to be a burden. We have to develop a scenario that gives them comfort.”

Of course, the NFL wouldn’t be in a pinch if teams had done a better job of holding down salaries, as even Donlan acknowledged.

Effective bargaining by agents, plus competition from the United States Football League, has driven salaries up, he said.

Stupidity may also be a factor.

Donlan cited an example of a performance incentive in which a quality running back received a bonus of $10,000 a game if he rushed for 3 yards in a game.

To protect the general manager who agreed to that clause, Donlan declined to name the runner in question. “But you know what he says in the huddle before the first play--this is going to be a run,” Donlan said.