The sports organization I chose is the San Francisco 49ers of the
National Football League. In this paper I will talk about How San
Francisco handles their budget, and how it will affect future season financials. The size of the market the 49ers play in, and the adjustments they must make to operate within their budget.
Each NFL team is issued 120.6 million dollar salary budget every year. If the total budget is not used any team can carry the reining balance over to the next season. If needed a team can use 1.5 million dollars from the next season that will be deducted if used. The San
Francisco 49ers salary for 2012 thus far is $106,148,952. A salary cap was put in place so that teams with more money couldn’t purchase the contracts of all the best players. The salary has been great for creating parity in the NFL. Over the course of time the salary cap will rise, but with a set cap the San Francisco 49ers will not be able to outspend their budget. Over the course of the season teams have to deal with holdouts, injuries, and the need to get help at a position. If the San Francisco
49ers needed to pick a player up, and needed to free up salary space they could restructure another player’s contract or just release a player.
Unlike the other 3 major sports in the U.S. (NHL, MLB, NBA) the NFL does not have guaranteed contracts. The only money that is guaranteed is the signing bonus, and a team can release a player at anytime without having to pay the remainder of the contract from the released player. The San Francisco 49ers are ranked sixth in the NFL in market size, so I would say that is large. The 49ers existing in a large market use almost all of their120.6 million dollar budget. Putting the best product on the field, and winning will make the team the most profit.
Winning will help the team sell more tickets, merchandise, and keep the whole community of fans buzzing. The San Francisco 49ers are building a new stadium in Santa Clara, California and the construction will be done in 2015.
The cost of the stadium that also has a stadium mall that will be open all year around will cost $987 million dollars. This will bring in
6,500 new jobs, and about 3,000 new seasonal jobs. By putting a great product on the field the San Francisco 49ers were able to win a vote to have tax payers pay $330 million dollars of the $987 million.
