The NFL is Actually Donating a Fair Amount to the American Cancer Society, Despite What Lousy Philly.com Writers Might Tell You

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Since we’re talking about charities and scams this week, let’s talk a little bit about the NFL and their whole Pink thing during the month of October to help Save the Ta-tas.

I’ve long been skeptical about how much money from the sale of licensed pink products goes towards charity– in this case, the American Cancer Society. But it turns out, according to a report from corporate shill Darren Rovell and some math by Business Insider, it’s not as bad as you may think.

Rovell:

Cork Gaines of Business Insider teased that out:

In other words, for every $100 in pink merchandise sold, $12.50 goes to the NFL. Of that, $11.25 goes to the American Cancer Society (ACS) and the NFL keeps the rest. The remaining money is then divided up by the company that makes the merchandise (37.5%) and the company that sells the merchandise (50.0%), which is often the NFL and the individual teams.

Then consider that only 71.2% of money the ACS receives goes towards research and cancer programs.

In the end, after everybody has taken their cut, only 8.01% of money spent on pink NFL merchandise is actually going towards cancer research.

He even put together this handy little chart:

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11% might not sound like a lot, but it’s actually a reasonable amount. Many feared it was more like 1-2%. And if 71% of that 11% is going toward actual research, that’s not too shabby. In other words– $8 out of every $100.

But some uninformed critics and bad-at-math 22-year-olds hired by 25-year-old media nepotists might disagree.

Gaines:

Still, there are unanswered questions about where the money is going and who is profiting.

The most popular place to purchase pink merchandise is at the NFL’s online shop, official team stores, and at the stadiums. In these cases, the NFL and the individual teams are acting as the retailer.

It is unclear how much of the 50% markup for items being sold directly by the NFL and the teams is going to the ACS, if any at all.

And here is the completely off-base, mathematically challenged take by a junior web producer at Philly.com. I’m not even going to mention his name, because it’s not his fault that he’s in way over his head at a major media company:

Therefore, for any pink merchandise purchased from the NFL’s official site, the league gets 12.5 percent for royalties (11.25 percent of which they donate to the ACS), but the league then receives an additional 50 percent by being the vendor of the merchandise. So in actuality, the NFL is not donating 11.25 percent of their 12.5 percent, but rather 11.25 percent from their 62.5 percent (slightly less if the gear is bought from a sporting goods store like Sports Authority or Dick’s Sporting Goods, who would divvy up the 50 percent with the league).

So while the NFL is parading out players with pink towels, cleats, armbands and tape onto a field emblazoned with pink ribbons and field goal post padding, know that the league is benefitting almost 500 percent as much from the merchandise fans buy than the ACS’s institute for cancer research.

NO. NO. NO. First: The league doesn’t donate 11.25% of their 12.5%– they donate 90% of their (12.5%) royalties. This is simple math, and logic. And though it’s obviously just awkward wording, he really spirals wildly down a rabbit hole that doesn’t exist with the next sentence: So in actuality, the NFL is not donating 11.25 percent of their 12.5 percent, but rather 11.25 percent from their 62.5 percent (slightly less if the gear is bought from a sporting goods store like Sports Authority or Dick’s Sporting Goods, who would divvy up the 50 percent with the league).

Nope.

He’s insinuating that donating 11.25% of 12.5% is better than donating 11.25% of 62.5%, when they’re not doing either– they’re donating 11.25% of 100%. And no, it wouldn’t be slightly less if the retailer wasn’t the NFL. If Rovell’s report is to be believed (wholesale prices generally fluctuate a little, it’s not always half), the NFL is donating 11.25% of every sale, regardless of whether they made the sale, a team made the sale, or another retailer made the sale. Their royalty remains 12.5%, 90% of which goes to the ACS. The 50% given to the retailer, as far as I know, doesn’t get split with the league. That line seems to have been pulled out of thin, misinformed air.

But then what about if the league or teams sell the items directly? Should they donate a portion their profit as a retailer? Probably. But here, again, is where Gaines and our Philly.com kid miss the mark.

I used to work at GSI Commerce (now eBay), a local company that ran the online stores for all of the major sports leagues. I worked specifically on MLB, but all the licensed sports people sat near each other and there was plenty of overlap between the leagues. So, I have a pretty good idea of the price breakdowns on licensed sports gear.

That 50% the retailer gets isn’t just instant profit. There’s cost of doing business well beyond just the actual price of the product. Plus there may be advertising, affiliate or search costs if the item was bought online. If I linked to an item from this site, me, CB, as the affiliate, would receive 8% of the total pie, as an example. If you clicked on an item through search or a price comparison engine, there may be paid search or other affiliate fees to be considered. In the end, the actual profit for online retailers is more like 20-30%, not 50%. Could some of that money be going to the ACS if the NFL made the sale on its website? Sure. But the NFL and its teams are a business– you can’t expect them to forgo an entire revenue stream for a full month. That’s nuts. Are they making money on the pink gear? ABSOLUTELY. But I see no harm in making money if you’re literally creating money that goes to charity. It’s a win-win. Where there might be a problem doing that is if you’re a local sportscaster making money off a charity and then ripping off its donors, Don Tollefson.

I’m not entirely defending the NFL here. They certainly have as much of a business and publicity interest in this as they do a philanthropic interest. And, as I wrote here, there are better ways to heal the world. But if 11.25% of every sale on those pink items is going to charity, I’m down with that.

Couple more examples of Philly.com-related ineptitude.

Justin Klugh writes today that Andrew Bynum’s press conference was at Independence Hall. It was not. It was at the Constitution Center:

Andrew Bynum sat down at the table next to Jason Richardson, in front of a crowd that included Batman and a raucously booed Mike Missanelli. Bynum had to say very little to coax noise out of fans who were so excited they’d scream if a bird flew by the Independence Hall window.

The challenge now is even greater for the Sixers’ sales and public relations staff: This year, Independence Hall was vacant of deafening optimism. Now it’s all about hurrying up and getting the season behind them so Nerlens Noel, Michael Carter-Williams and everyone else can have a year of development under their belt and the team can be bad enough to grab that draft pick and get better.

Are there not people editing this stuff?

And then there’s the Daily News paying to promote this Tweet, today, about an Eagles win from six weeks ago:

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via reader Chris

Yeah, they really get this social media thing.

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13 Comments

  • Lumpy7 October 18, 2013 at 3:36 pm

    Total bullshit. Most misleading headline ever. Several different investigations indicate a $100 jersey nets a contri of far less than ten bucks. There’s NO WAY a $100 jersey costs more than 5 bucks to make in China. So with all the scummy middlemen (including NFL, who wears the hat here), do the fucking math.

    Reply
    • Kyle Scott October 18, 2013 at 3:49 pm

      Wrong. Manufacturers don’t charge $5 for a $100 jersey. They, too, have to make a profit.

      Reply
      • Miles Scott October 18, 2013 at 3:56 pm

        You’re the man

        Reply
      • Lumpy7 October 19, 2013 at 9:35 pm

        Kyle I got the most awesome Dawkins jersey ever made for 45 bucks from a joint that speaks only Chinese. Every # and emblem stitched, still wear it. And they were likely 3 companies down the line. $100 jerseys in an Eagles store cost $5 to make, maybe less.

        Reply
  • Jripper October 18, 2013 at 3:54 pm

    Also, philly.com is still running an article saying that the Phils re-signed Michael Martinez to a minor league contract– even though there is no MLB transaction saying so and also the Phils have said this is false.

    Reply
  • woahneelie October 18, 2013 at 4:05 pm

    Kyle I respectfully disagree with your opinion here. Your math may be correct but you say – ” But the NFL and its teams are a business– you can’t expect them to forgo an entire revenue stream for a full month. That’s nuts.”

    Why can’t we expect them to give up all of their proceeds for “pink” gear only. I’m not talking normal jerseys or merchandise but the pink branded gear. They found another revenue stream by giving all 32 NFL teams another color and claiming its for breast cancer awareness. That’s ludicrous. (just imagine trying to brand Eagles gear in burgundy and gold – wouldn’t happen. So they found a loophole) If this was truly a charitable deed (as they promote it) they would donate all of their profits for this gear. Still pay off retailers, etc, etc…but their share should all be going to cancer research. They would still clear millions in other sales/revenue streams…

    …its greed Kyle, nothing more.

    Reply
    • Kyle Scott October 18, 2013 at 4:09 pm

      Because a lot of the sales are pink gear, meaning it replaces other sales during that time. They shouldn’t have to donate all of their profits from it. More? Maybe. But in cases where they aren’t the retailer, they’re donating 90% of their cut. That’s not bad. In total, 11% isn’t bad, at all.

      Reply
      • woahneelie October 18, 2013 at 4:47 pm

        Exactly – if a lot of their sales are pink gear then do the charitable thing. It’s not like they’re hurting for money. I understand your point of “they shouldn’t have to” – they have the right not to do this at all – but don’t you find wrong that they keep these profits? Either make everything pink and donate their profits because they should, or drop the program altogether. OR put on every tag exactly the percentage going to benefit the research. They make it seem like they are donating all of it.

        Reply
  • Jimmy Russell October 18, 2013 at 4:35 pm

    Philly.com is a liberal cesspool of sensationalist headlines. Seriously, dems have had 60+ years, and slowly turned the city into complete shit.

    Reply
  • Scott October 18, 2013 at 4:47 pm

    If you get a chance watch a documentary on Netflix call Pink Ribbon Inc.

    Reply
    • Kyle Scott October 18, 2013 at 5:02 pm

      Actually planning on it. Keep seeing it pop up.

      Reply
  • Bernard Garrett October 18, 2013 at 9:46 pm

    1) You aren’t factoring in that the pink merchandise and pink gear that the players wear is advertising in itself. The program gets media publicity, attention, etc that promotes NFL football, not just the pink merchandise.

    2) Adam, I agree with you that like any other business, the NFL’s goal is to make money and no business is required to live up to an ethical standard of philanthropy. But that doesn’t mean that as consumers, we have to like that that the NFL is basically misleading us into thinking that our purchases are solely (or at least mostly) going to cancer research. Sure, the end result is good — the NFL donates a decent amount of money to cancer research. But the action holds no ethical value in my opinion, because the NFL’s intentions are not to help raise awareness for breast cancer or to help breast cancer research. The NFL’s intentions are to make money. If the program weren’t economically successful, they would cancel it. Like another commenter mentioned, if the NFL were more forthright in explaining where the money from purchases go, that would leave less of a sour taste in my mouth.

    Reply
  • Bernard Garrett October 18, 2013 at 9:51 pm

    Sorry meant to say Kyle* haha #parksandrec

    Reply
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