Taxpayers have been very, very good to the National Football League. In 1998, for example, Marylanders wrote a $200 million check so the Ravens could build a state-of-the-art stadium with abundant luxury boxes and other amenities that help make the team fabulously profitable. As a result, the value of the franchise soared from $329 million to $864 million in just eight years, according to Forbes magazine.
Free stadiums are the norm throughout the league, but they?re just the tip of the subsidy iceberg. At the federal level, the easy deductibility of suite rentals and game tickets as a “business entertainment expense” props up demand, and favorable rules allowing depreciation of player contracts makes owning a sports franchise a wonderful tax dodge.
The wisdom of these generous subsidies can be debated ? but not here.
The question before us now is this: Given how well taxpayers look after their football teams, don?t these teams have a moral obligation to take care of their own? Shouldn?t they do right by the old-timers who built the league? After all, it?s usually the warm, pleasant feelings we get when remembering these players? spectacular deeds that make us willing to treat the sports industry more favorably than any other.
Sadly, the NFL?s treatment of its pioneer players is shameful, both in absolute terms and when compared to other sports. Consider, for example, ex-Colt John Mackey. A sculpted 225 pounds on a 6-foot-2frame in his prime during the mid-?60s, Mackey was voted the tight end on the NFL?s 50th anniversary team and is a member of the sport?s Hall of Fame. Local fans still talk about his spectacular play in Super Bowl V, when he snagged a deflected pass from Johnny Unitas and galloped 75 yards for a touchdown in a 16-13 Colts victory.
Mackey, now 64, can remember that golden moment ? but often does not recognize old teammates and friends. He suffers from frontotemporal dementia, an Alzheimer?s-like affliction, and requires adult day care that claims over three-fourths of the $1,950 monthly pension he receives from the NFL. As his condition worsens, he?ll likely require a facility that will cost much more.
And Mackey?s pension actually is one of the larger ones for players of his era, thanks to his long career. The current formula is $200 per month per year of service. Since the typical career lasts four years, the average check is under $1,000 monthly.
Other sports do far more for their retired veterans. A pro basketball player with a decade long career would be getting about $3,600 monthly and could have started collecting full benefits at age 50, five years sooner than the NFL?s plan. High-seniority hockey players start collecting $12,500 annually at age 45 and get a $250,000 lump sum payout at age 55. Baseball players with a decade of service time collect $175,000 annually starting at age 65.
The window of opportunity to right this injustice is now wide open. The NFL is flush with cash. League revenue reached $5.8 billion last year; its total pension fund costs were barely one percent of that. Starting this season, new TV contracts will add $3.7 billion annually to revenue and a new collective bargaining agreement will carry labor peace into the next decade.
The major elements of that agreement are already in place, but the NFL Players Association has not yet decided how much to increase benefits for the old-timers ? or whether to do so at all. One problem, as union head Gene Upshaw put it in a recent letter to some of those old-timers, is that “we represent only active employees,” who have to “[give up] current compensation to increase pensions for others.”
Fortunately, the players of this era seem to recognize that they enjoy, in part, the fruits of the labor of those who came before them. We can also hope that NFL Commissioner Paul Tagliabue, who will retire in July, will polish his legacy by using his considerable lobbying skills to win major improvements in the league?s retirement and disability plans. If the league stiff-arms its pioneers while enjoying its greatest prosperity, perhaps we taxpayers should reconsider our own generosity to the sport.
Steve Walters is a professor of economics at Loyola College in Maryland, where he teaches a course in sports economics.
