The Digital Skeptic: NFL Referees Prove Better Pay Is Better for Investors
No model could account for the utter contempt players showed for the new zebras or the nuances old refs such as Ed Hochuli had for keeping the game interesting for television. It took three weeks -- and the so-called Worst Call Ever on last Monday's Packers-Seahawks debacle -- for the league's owners to realize how wrong their models were.
But realize it they did. And the owners had no choice but to take a couple for the company.
A company that pays employees more is -- guess what? -- worth more.
Now here is the interesting part: Imagine for a second if the NFL were a publicly traded stock. What would have happened to this poor ticker when the blown endzone call ended Packers/Seahawks on Monday Night Football? At least a 99-yard loss, as investors cared not that the league watched its bottom line. The league's biggest properties, including the Super Bowl, would be worth super little with these cheapie refs. And later in the week, when an agreement was finally reached -- and costs went up -- investors would have sent the stock on a victory run.In other words, NFL stock would have behaved the exact opposite to most stocks: Enterprise value would have risen as costs rose. Better-paid employees make for better investors
This all means investors are now taking the snap in a new valuation offense. Considering the skills needed to make modern companies worth something in the modern age, more money spent on more skilled employees is what makes enterprises more valuable. And markets more valuable. Think about it: By pumping real cash into refs' pockets, the NFL has created a nice piece of business for financial services pros looking for that next client. What would happen if investors rewarded every other Fortune 1,000 manager with an NFL-like stock run when skilled labor got paid more? That's a lot of pieces of business looking for a lot of return -- and the beginning of a long Dow offensive our economy so desperately needs.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV