Pay for Playoffs? Not Much
Business of Football

Pay for Playoffs? Not Much

Despite the importance of postseason games, players earn an absurdly small fraction of what they make during the regular season. It’s the opposite of how almost every other business is run. And it’s also part of the motivation behind the owners’ push for expanded playoffs

When discussing the business of the NFL with those involved in businesses other than football, there are contradictions that outsiders do not easily understand. On one hand, the NFL stresses equality, with a tinge of socialism, as its largest league-wide revenue source—broadcast income—is split equally among teams. Conversely, as we witnessed last week with the decision to relocate the Rams to Los Angeles, NFL owners are bold capitalists who impose their leverage on cities, sponsors, networks, vendors and, most importantly, players.

NFL players are the least secure group of athletes—in terms of overall and guaranteed compensation—among the four major sports leagues, despite playing for the league with the most revenues and highest franchise values. Although NFL owners could certainly pay players more in both total and guaranteed player compensation, even with the Cap system, they negotiate, both collectively and individually, not to.

Now deep into the NFL postseason, players’ playoff compensation truly illustrates both the inequity of player pay and a compensation model that makes no sense in other businesses. Let’s examine.

League pay, not team pay (and not much of it)

NFL player contracts are irrelevant in the playoffs, as postseason pay comes from the league, not the team. Pay is identical—and relatively small—for every player, regardless of impact on team performance. These are the (cumulative) per-player payouts this year.

Wild-Card Round—Division Winner: $25,000
Wild-Card Team: $23,000
Divisional Round: $25,000
Conference Championship: $46,000
Super Bowl Winner: $102,000
Super Bowl Loser: $51,000

Note that teams earning a bye week for the first round—Panthers, Cardinals, Broncos and Patriots—were not paid for that week of practice. Let’s now compare that to a couple of examples of regular-season pay.

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If not for postseason incentives in his contract (a rarity), Manning would earn only $173,000 for the entire playoffs if he leads the Broncos to a Super Bowl title, less than 20% of what he made for a single regular-season game.

Stark differences

Peyton Manning is actually one of the few players in the NFL with postseason incentives in his contract—a $2 million incentive for both winning this weekend’s AFC Championship and for winning the Super Bowl. Manning only has those incentives due to the fact that replaced a secure $4 million his scheduled $19 million salary in a negotiated pay cut. Taking his revised salary of $15 million, here is his pay for the last four weeks, the final three weeks of the regular season and the first three weeks of the postseason:

Week 15: $882,000
Week 16: $882,000
Week 17: $882,000
Wild-Card Weekend: $0
Divisional Playoff Weekend: $25,000
Conference Championship: $46,000

Thus, Manning made $2.646 million for the last three regular-season games and 2.7% of that ($71,000) for his current playoff run, for which the most he can make (minus incentives) is $173,000.

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Going beyond a franchise quarterback, here are the four-week earnings of Richard Sherman, top cornerback and fellow columnist at The MMQB, whose 2015 salary was $10 million:

Week 16: $588,000
Week 17: $588,000
Wild-Card Weekend: $23,000
Divisional Playoff Weekend: $25,000

Thus, Sherman made $1.178 million for the last two regular-season games and 4% of that, $48,000, for his two playoff games.

Even a player making the lowest salary allowed, the NFL minimum of $435,000, made almost $26,000 per week this season, still more than any player in the postseason made in the Wild-Card or Divisional playoff round.

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In a “normal” business, employees are often financially rewarded—whether as part of an outlined incentive program or as a discretionary reward—for superior performance. That reward, usually as part of a division (team) of a company, can often be significantly higher than the employee’s weekly paycheck.

In the NFL, 12 of its 32 divisions of employees distinguish themselves from their competition by reaching the postseason, with tiers of that 12 advancing further. Compared to normal business models, however, their financial thank you is relatively inconsequential. The way the players are paid for the most important competitions of the year pales in comparison to the way they are paid for, say, a game against the Jacksonville Jaguars in October. It is an unusual compensation model for the highest team achievers in the profession.

I know what some of you are thinking: The playoffs are about much more than money—they’re about creating a legacy and riding off into the sunset with a championship (which only one of the twelve teams does every year). I appreciate the romance, and yes, players are truly playing for more than the money at this time of year. However, we would be naïve to believe that most players would rather choose a chance for glory over being paid—at least—to their contract level during the playoffs.

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Leverage plays

During the 2011 CBA negotiations, when NFL owners proposed expanding the regular season to 18 games, the players’ association strongly resisted and the issue was shelved. In my opinion, though, the issue was never a real priority for owners; they could not justify that initiative while having the emphasis on player safety that they do. Thus, it always appeared to be a strategy by owners to leverage that negative emotional response to gain the economic concessions they wanted.

Now, rather than revisiting the 18-game season, NFL owners appear to have strategically prioritized expanding the playoffs, giving them significant added revenues while paying players relatively nominal additional income. From the league perspective, it makes obvious economic sense: Why pay regular-season prices for extra games when they can pay discounted postseason prices? And while it’s true that those additional revenues from added playoff games would be shared through Salary Cap accounting, that incremental gain pales to even a marginal increase in regular-season player earnings.

Speaking of leverage plays, imagine if a star player or group of players were to withhold services for a playoff game? Besides upsetting fans and management, their only economic risk would be a fraction of their normal weekly pay. Of course, for those reasons of the “glory” of playoff football, this is highly unlikely. However, this is perhaps the only time of year when NFL players would have leverage to threaten this type of boycott.

The incongruity of regular-season pay compared with postseason pay has always been one of those well that’s how it’s always been done aspects of NFL player finance. For any other business, it is illogical to better compensate the most mundane achievements compared to the most important ones. But, as with much about the business of the NFL, this postseason advantage of owners over players continues to exist with no end in sight.