[UPDATED 18 April]
We all know some athletes are paid a lot of money. But how much do professional sports administrators earn? As many sports bodies are privately owned concrete information is hard to come by. Where its published, as in the case of Premiership football CEOs, numbers are usually restricted to highest paid directors (a standard, mandatory, reporting metric for companies filing accounts in the UK) usually meaning CEOs or equivalent.
Intriguingly three major US sports organisations, the National Hockey League, the Professional Golfers Association and the, biggest of them all, the National Football League all enjoy tax-exemptions as “501(c)” category non-profit organisations, the equivalent of registered charities in the UK.
In 2008 the Internal Revenue Service (the US equivalent to HMRC) determined that 501cs should declare the pay of top executives in their annual returns. The NFL’s tax benefits from non-profit status is laid bare in this excoriating article by Greg Easterbrook in October’s Atlantic magazine. The article reveals that NFL Commissioner Roger Goodell is the best paid man in sport and makes $30 million a year. It’s a great read:
“The reason NFL executives’ pay is known is that in 2008, the IRS moved to strengthen the requirement that 501(c)6 organizations disclose payments to top officers. The NFL asked Congress to grant pro football a waiver from the disclosure rule. During the lobbying battle, Joe Browne, then the league’s vice president for public affairs, told The New York Times, “I finally get to the point where I’m making 150 grand, and they want to put my name and address on the [disclosure] form so the lawyer next door who makes a million dollars a year can laugh at me.” Browne added that $150,000 does not buy in the New York area what it would in “Dubuque, Iowa.” The waiver was denied. Left no option, the NFL revealed that at the time, Browne made about $2 million annually.”
The IRS makes returns available online so it’s very easy to look up all the latest IRS returns for free using site like Guidestar (choose non-profits from the dropdown and look for the “Forms 990 and Docs” tab)
The 2012 returns (for financial year 2011) show the following compensation packages (this is only a small selection of those on offer)
- Roger Goodell, Commissioner, $29.5m
- Jeff Pashl, General Counsel, $8.8m
- Steve Bornstein EVP media, $6.6m
- Paul Hicks, EVP Pr and Govt Relations, $1.5m
- Paul Tagliabue (former commissioner, now retired) still being paid: $8.6m
Update: The New York Times has accessed 2013 filings and has Goodell at $44.2m for 2012, Steve Bornstein at $26m and Pash at $7.86m. It estimates that David Stern, former commissioned of the NBA and Bud Selig, commissioned of MLB are also paid in excess of $20m.
- Gary Bettman, Commissioner, $8.3m
- William Daly, Deputy Commissioner, $3.26
- John Collins, COO, $2.9m
- Colin Campbell, SVP Hockey Ops, $1.68m
PGA (2010 figures from 2011 return)
- Timothy Finchem, Commissioner, $7.38m
- Thomas Wade, CMO, $2.4m (he has since moved to be chief commercial officer)
- Ty Votaw, EVP Communciations, $1.2m
Unsurprisingly measured against salaries in the non-profit sector these packages look very generous. Only 11 other non-proft CEOs earned more than $1 million in 2013 according to Charity Navigator , presumably by pulling those same IRS 990 returns, starting with the CEO of the Boys and Girls Club of America at $1.85 million. They also bear up very well compared with EPL CEO salaries. But they are dwarfed by the compensation packages of America’s top CEOs with whom these guys regularly rub shoulders (yes, they are all guys).
While some of the individual packages are very large, considered as a proportion of revenue salary and compensation expenditure of these organisations is pretty reasonable. The PGA generated $973m of revenue of which only 7.4% was salaries and compensation. The NHL generated 109m revenue of which 49% was salaries and compensation, the NFL 255m of which 42% was salaries and compensation, but in both cases Its safe to assume the bulk of revenue was almost certainly distributed to/collected by franchises so the actual overall figures may be closer to the PGA number. This looks even more reasonable when you consider that many EPL clubs have (athlete) wage bills way in excess of their business revenue, which has prompted the introduction of financial fair play rules (pdf) by UEFA. This interesting article argues that the NFL’s losses (NHL is also loss making) may indicate that the mothership is carrying loss on behalf of the (highly profitable) teams – which may explain why the teams are more than happy for executives at the centre to be well paid.
If your jaw is dropping, consider this. Sport isn’t the only sector where the lucky few can make money in the right job. $422,599 a year plus $107,445 in benefits and deferred compensation for shifting stage scenery thanks to New York’s unions anyone?