The proposed National Football League concussion settlement is a great deal for the league. Only don't take my word for it. Ask Chad Lewis.
A senior director at Fitch Ratings, Lewis makes his living analyzing and grading corporate debt—the rough equivalent of studying your credit card statements and old, still-unpaid Columbia House mail-order CD club bill to come up with a personal credit score, only for investment banks and pharmaceutical companies. Last month, Fitch Ratings assessed the NFL, giving the league a series of "A" and "A+" grades.
"We looked at the key fundamentals," says Lewis, also the lead analyst for Fitch's sports ratings. "TV contracts, fan attendance, a great, long history. Then we looked at the actual economic framework of the league, with equal distribution of TV revenues and player costs having a hard salary cap. Then we matched that with the amount of debt on a per team basis, where leverage is very low."
As for the concussion settlement? A tentative deal that NFL commissioner Roger Goodell says will cost the league a "tremendous amount of money?" It hardly factored into Fitch's high marks, and with good reason. The rating agency notes that both the NFL and attorneys for the players suing the league expect the deal to cost no more than $765 million over the next 65 years—an amount the $9 billion-plus NFL easily can afford to pay, given that it's equal to:
Seven Games of "Monday Night Football"
You read that right. Not seasons. Games. According to the New York Times, ESPN pays the NFL $1.9 billion annually for 17 regular season Monday night contests, or $111 million per game.
Oh, and just to put things in a little more perspective: barring the apocalypse and/or the adoption of an 18-game NFL regular season, the league will play 1,105 Monday night games over the settlement's 65-year duration.
Twenty-Three Games of "Thursday Night Football"
The Sports Business Journal reports that CBS is paying the NFL $275 million for eight Thursday night games this year, or $34.4 million per game. Which in turn means that the league is sewing up the bulk of its concussion liability—and probably avoiding potentially ruinous discovery—by sacrificing the profits from roughly two season's worth of the worst games it puts on television,games that players hate because they're convinced that playing them puts them at greater injury risk.
Of course, with said concussion liability off the table, the league doesn't really have to listen to players. What are they going to do, sue?
Four Regular Seasons of Stadium Beer and Hot Dog Sales
According to ESPN.com, 17.2 million people attended NFL games during the 2012 regular season. Meanwhile, Team Marketing Report reports that in 2013, the average combined cost of a single beer ($7.05) and hot dog ($5.07) was roughly $12.
Assuming those same 17.2 million fans each buy a hot dog and a brew—of course, some consumed less, while others consumed more and more—league teams gross roughly $206.4 million per season on beer and dogs alone.
Three-and-a-Half Years of On-Field Apparel Sponsorship
The Portland Business Journal reports that Nike paid the NFL $1.1 billion to be the league's exclusive on-field apparel sponsor from 2012 to 2107, a deal that averages $220 million per year.
Ninety-Six Minutes of Super Bowl Advertising
According to Variety, Fox sold out its inventory of 2014 Super Bowl ads for about $4 million per 30-second spot, or $8 million per minute. Did you enjoy Scientology's ad during the big game? Great. Watch it 96 times in a row. You just paid for 65 years of brain damage!
Two-and-a-Half Years of Paying the NFL's 15 Highest-Earning Players
According to Forbes.com, the NFL's top 15 highest-earning players between June 2013 and June 2014 of this year—from Atlanta quarterback Matt Ryan at $42 million in salary and bonuses to New Orleans cornerback Jairus Byrd at $17.9 million—collected a combined $306.2 million from their teams.
Nine Years of Paying the NFL's Seven Highest-Earning Executives
The most recent 990 form filed by the NFL indicates that the league's seven highest-paid executives—starting with Goodell at $44.2 million—were paid a combined $89.3 million in 2013.
Fun fact: Goodell's salary could cover the roughly $42 million the proposed settlement will award nine NFL retirees currently diagnosed with amyotrophic lateral sclerosis (ALS), and still leave the commissioner with enough cash to buy 15 seconds of Super Bowl air time.
One-Seventh of the NFL's Total Grade A or A+ Rated Debt in 2014
According to the Fitch report, the NFL had approximately $5.75 billion in debt on its books in 2014—all of it graded as very safe, despite the looming settlement. Which means that Goodell was half-right: $765 million really is a tremendous amount of money. Unless you're talking about the league he works for.