Michael Sam became one of the national Football League’s most marketable players without playing a single down in a regular-season game. But the St. Louis Rams’ decision to cut the openly gay defensive end on Aug. 30 won’t necessarily impact the team’s financial outlook, nor will it necessarily benefit the Dallas Cowboys, who announced on Wednesday that they had signed Sam to their practice squad.
Sam’s fall to the seventh round of the 2014 NFL Draft made it clear that none of the league’s 32 teams expected him to be a major on-field contributor this season. However, the 24-year-old’s quest to become the first openly gay active player in NFL history instantaneously generated a large fan base. By July – just two months after he was drafted – copies of Sam’s jersey had sold better than all but five of the league’s players.
“Michael Sam has become symbolic of the broader gay rights movement in America,” Marc Edelman, an associate professor of law at Baruch College’s Zicklin School of business, told International Business Times. “There is certainly a segment of the NFL fan base that will root for Michael Sam and seek to purchase his jersey, based not only on what he does on the football field but also what he represents to American society at large.”
Given the popularity of Sam-related merchandise and his role as a symbol of equality and progress in the sports world, the Rams’ decision to release him seems bad for business. However, the NFL’s current collective-bargaining agreement protects St. Louis from any negative financial fallout, argues Bob Heere, an associate professor at the University of South Carolina’s Department of Sports and entertainment Management.
“The NFL is a pretty socialistic organization, which means that they share most of their revenue,” Heere told IBTimes. “They share almost all of their TV revenue, and they also share merchandise. If the Rams sell more jerseys, they don’t necessarily make more money.”
In essence, the NFL’s current collective-bargaining agreement stipulates that the league’s 32 teams evenly split national revenue generated by the league. The revenue-sharing agreement covers profits from television deals, collective sponsorships and, for the most part, merchandise sales. The NFL divided $6 billion in revenue among its 32 teams, according to ESPN’s Darren Rovell. Thus, each franchise received a $187.7 million share of the pot.
This pre-existing arrangement allowed the Rams to evaluate Sam solely from a football perspective while ignoring potential blows to jersey sales or television ratings. “I think that’s what allowed the Rams to take a risk on him, because they know that their revenue wouldn’t be impacted directly by it,” Heere said. “They could make this decision based truly on football.
“Because of the collective agreement, television ratings for the Rams game itself is secondary. Whether the Rams game is slightly less-watched, they make it up from the other teams.”
There is a caveat attached to Sam’s move to Dallas. The Cowboys are the only NFL team with the collectively bargained right to distribute their own merchandise — the result of years of legal wrangling between league officials and team owner Jerry Jones. Known as “America’s Team,” they are the fifth-most-valuable sports franchise in the world in 2014, with a valuation of $2.3 billion, according to Forbes.
Even if the Rams kept Sam and his jersey continued to increase in popularity, any profit would simply be added to the league’s revenue pool, to be equally divided among its teams. Conversely, the Cowboys can directly profit from him.
“For the Rams, Sam’s merchandise value has very little for them as an organization, because they have to split that extra money that they might make off of him. For the Cowboys, they get to keep that money,” Heere added. “So the commercial value for the Cowboys is much bigger than the commercial value for the Rams.”
However, even this aspect of Sam’s marketing value remains in question; Sam will wear No. 46 as a member of Dallas’ practice squad, but he won’t be able to wear that number if he becomes a member of the team’s active roster due to the league’s position-based number restrictions, ESPN notes.
From a financial standpoint, the only discernible loss that the Rams could experience without Sam is a loss of media exposure and, by proxy, the loss of an opportunity to expand their middling fan base. But Heere asserts that any benefit Sam could provide in that regard might be offset by fans who are morally opposed to his status as a gay man.
“Michael Sam might have attracted a slightly different demographic, so it might lead to an increase in fans, or at least an increase in the awareness among a certain population toward the team, but that might be offset by the some of the backlash that the more conservative fan base might have towards [Sam]. In terms of business, I’m not sure if it helps a lot,” he said.