1,700 NFL Players will earn 5 Billion dollars next season
The salary cap will be a record $155.27 million per team next season, which means that 1,700 active players will be splitting up almost 5 Billion dollars. If we were practicing socialism in the NFL (like the owners do when they split TV revenues) and the 5 billion was equally shared by all players, each player would make almost 3 million dollars.
This coming season there will be a total of 76 players in what I call the “Eight Figure Club” which means the 2016 Salary Cap for those players will be anywhere from $10 million to $30 million. You can see the list of those players here. The total salary cap hit for just those 76 players is well over 1 Billion.
I remember when making six figures was a benchmark for many NFL players. My last year in the NFL (1984), I made $100,000 so I reached my goal – but just barely. Adjusted for inflation, that salary would be approximately, $230,000 in 2016. Not even close to the average NFL salary of 2 million dollars.
Not only are salaries going up, but the amount of guaranteed money has been steadily increasing - along with player benefits.
Some players could see their pension increase three times in this current CBA. It will go from $470 per credited season to $560 (2012-2014), $660 (2015-2017), and $760 (2018-2020).
Since 1993, the NFL Players Association has also created other retirement type benefits for the players. They have a “Second Career Savings Plan” with assets totaling 1.8 Billion and an “Annuity Plan” with assets totaling 1 Billion. You can read about those Cadillac benefits here, but the one thing that stands out in my mind is the fact that those two plans have one Billion more in assets (payable to the players that came after 1993) than the NFL Pension Plan!
I should note that part of the reason those plans have more assets, is because the NFL Pension plan is underfunded. Based on the last notice we received, the money needed to pay all current and projected benefits is $2,945,728,870, but the current value of assets is only $1,606,565,990.
The NFL Second Career Savings Plan's average account balance for a participant is $210,000. For the past three years (2013-2015) it has been the Top Rated 401K Plan in the world, followed by the Savings Plan of the Saudi Arabian Oil Company. Think of that......they beat out the wealthiest people in the world!
There is a player contribution requirement for the Second Career Savings Plan. For every one dollar contributed by players, the NFL team must contribute two dollars, up to a maximum amount of $24,000 for 2011 through 2014; $26,000 for 2015 through 2018; and $28,000 for 2019 and 2020.
I should note that there is no player contribution to the NFL Annuity Plan which has an average player balance of $250,000. If a player has at least four credited seasons, the league now contributes $80,000 per season, and will raise that to $95,000 in 2018. This Plan was started in 1998, and players can access the account at age 35. The NFL Annuity Plan is in the top 15% of similar plans for account balances, company generosity, participation rate, and total plan cost.
Interesting fact: Peyton Manning will have over a million dollars in his Annuity Plan (which will continue to grow over time) and his Second Career Savings Plan will have.........well, the question is "Does Peyton Manning really need a second career savings plan? He earned $400 million during his career. On top of that, if Peyton Manning waits until age 65 to start receiving his pension, it will be approximately $280,000 annually. Obviously, Peyton is not your typical NFL player, but even a player with only 6 years in the league making the average salary of 2 million a year can be set for life if he manages his money properly. Unfortunately, there are still a lot of guys that are not planning ahead - as former player Chris Kluwe points out in this Sports Illustrated article: Broken men and NFL's broken system: Why life after the game is so difficult.
If life after the game is difficult for today's players, just imagine what it was like for the older generation of players who didn't have transition assistance programs, health reimbursement accounts, tuition assistance, severance pay, an Annuity Plan, Second Career Savings Plan and 5 free years of medical benefits waiting for them when they retired.
So, while the cash cow gets fatter and fatter for current players, the former players – particularly the pre-1993 players – are hoping that the promises made by the NFL and NFLPA in the year leading up to the last CBA can still be realized at some point in the future. Preferably the near future!
In the 2011 Collective Bargaining Agreement, the NFL and NFLPA created the Legacy Benefit which set aside $620 million, spread out over 10 years, to increase the pensions of thousands of players that were vested before 1993. That’s $62 million per year, or put another way - less than one year’s salary for Russell Wilson and Cam Newton.
Another way to put this in perspective........The guaranteed bonuses for the top 11 players in the NFL are more than $648 million. That’s 28 million more than the entire Legacy benefit is costing. Here's the breakdown on the bonuses: Eli Manning -$65,000,000; Philip Rivers - $65,000,000; Russell Wilson - $61,542,000; Colin Kaepernick - $61,000,000. Cam Newton - $60,000,000; Marcell Dareus -$60,000,000; Ndamukong Suh - $59,955,000; Tony Romo -$55,000,000; Jay Cutler - $54,000,000; Aaron Rodgers -$54,000,000; Calvin Johnson - $53,250,000.
When the NFL and NFLPA were negotiating the last CBA, Carolina Panther’s owner Jerry Richardson and Green Bay Packer CEO Mark Murphy sent former players a letter dated April 4, 2011 saying they would like to establish a new pension supplement for retired players aged 55 or above which would give an immediate increase in pension payments averaging almost 60 percent. They also told us they would like to institute a new rookie pay system that would re-allocate more than $300 Million per draft class to fund benefits for current and retired players.
On April 12, 2011, just one week after receiving the Richardson/Murphy letter, Joe DeLamielleure posted a letter on the Fourth and Goal website responding to their proposals and recommending that they split the $300 million down the middle.
DeLamielleure said “In their last proposal to the active players, the owners put $300 million on the table – money that would come from a new rookie pay system that would re-allocate more than $300 million per draft class to fund benefits for current and retired players. Me and 80 other Hall of Fame players have called for a Rookie Wage Scale, but Mr. Smith would not go for that. Nonetheless, it appears that he may be open to some type of cap on the overall amount of money paid to rookies. Let’s split that right down the middle and put $150 million annually into the pension plan to help all pre-1993 vested players. The NFL and the NFLPA could do that deal tomorrow – even without a new CBA. That would be a small drop in the 9 Billion dollar bucket. After they finish that small bit of business, they can go back to the table and figure out how to split up the rest of the Golden Goose eggs.”
As you all know, we did not get a $150 million annual increase in the pension plan for pre-1993 players – we got a $62 million annual increase. Not even half of what we were hoping to receive.
So what happened to the $300 million in annual savings that would accrue from the estabishment of the Rookie Salary Scale? Almost all of it is going right back into active player salaries and benefits. A small portion went toward the "Joint Contribution" - a $242 million amount (over the 10 year term of the CBA) to fund retired player programs, services and/or benefits, as determined by the NFLPA. That's less than one year of annual savings under the Rookie Salary Scale. And what has the NFLPA spent that money on? All we know for sure (based on the NFLPA's own website) is that they increased pensions for 1,722 former players that had credited seasons from 1993 to 1996. The increase cost $35.4 million dollars - spread out over 3 years.
What people say, and what people actually do, are two different things. Here's what NFLPA and the active players said about increasing pensions for former players when they were trying to woo us to their side during the last CBA negotiations.
At the 2010 NFL Players Association Convention in Maui, a resolution entitled Former Player Members Expression of Support was approved. The resolution stated the following: [RESOLVED, that the NFLPA Former Player membership expresses its full support for the active NFLPA membership in their demand during their CBA negotiations that the NFL and its member Clubs establish a Legacy Fund for Former Players to be funded by 2% of the profits generated by the NFL and its member clubs each year; and that the Legacy Fund be used to increase the pensions of all Former Players who have a credited season before 1993 and who are currently receiving a pension by an additional $2,000 per month.]
As most of you know, we did not get an additional $2,000 per month. The average increase for most players was around $600. Nonetheless, I believe the Hall of Famer’s did a pretty good job advocating on behalf of the pre-1993 players. We got an increase, but let's face it, the Legacy benefit did not nearly go far enough in helping the pioneer players of the NFL.
So now the wives of Hall Fame players have decided to push the issue of increasing pensions for the older generation of players - and they are a force to be reckoned with! The old saying is true: "Hell hath no fury like a woman scorned" and although that quote is usually reserved for unrequited love, isn't that exactly what has happened here? The NFL and NFLPA need to recipricate and show the older generation of player some love and they can do that best if they show us the money!
It's good that the wives have started carrying the water on this issue, because proud men don't like to beg. In many cases, the wives are now the sole supporters and caregivers for their husbands. They have been dealing with all the problems that are now affecting the body, mind and spirit of thousands of former NFL players.
Look, I'm glad we got the Legacy benefit, and I realize - as most former players do - that there is no legal obligation for the owners and the active players to increase our pensions. But I do believe they have a moral and fiduciary obligation - considering what we had to deal with when we played the game. The Executive Director of the NFLPA, DeMaurice Smith acknowledged this when he first took office and said "...they [Former Players] grew this game. And you think about the history of that game and people like Sammy Baugh, a game where people made $6,000 during a season and sold cars during the offseason to make ends meet, they grew this game into one of the most tremendous businesses in America--in the world. Are there opportunities to do things better? Absolutely. It seems to be that--I've told the [active] players this; I don't have any problem telling you this--I think they have a moral obligation to the retired players. Are there opportunities to do things better? Absolutely. I think the good news is that while there is a moral obligation, I also believe that there is a business obligation, or business justification, to the retired players as well."
Former players couldn't agree with him more!
Part of the moral and business obligation comes out of the fact that we went on strike on several occassions to improve conditions for today's players. No NFL player has had to go on strike since 1987 - almost 30 years. The pioneer players also had some really poor working conditions – ie. full-contact two a day practices for two months, no concussion protocols, lousy helmets and inferior equipment, astroturf, primitive surgical procedures and bad surgeons (remember, we couldn’t get a second opinion before 1982 and we had to use the team doctor). We played under rules that allowed horse collaring, crack backs, spearing, the wedge, head slapping, chop blocking etc. I could go on and on, but you get the picture.
We paid the price - both physically and mentally. Ultimately we made the game safer for today’s players. Let’s hope they remember that when the CBA is getting ready to expire and they start talking about increasing player salaries and benefits.
The fight for better pensions and benefits has been going on for a long time, but the one thing that the NFL and the NFL Players Association cannot tell former players - when they do eventually go back to the bargaining table - is that they just don't have the money to help the older generation of players. That myth has been destroyed forever. The NFL is projecting revenues to increase from 10 billion to 27 billion annually by the year 2027 and former players have a vested interest in helping them succeed in reaching that goal.
We have been good ambassadors of the game and if the NFL prospers, then the former players that are part of the Legends Community should prosper too!
