WP: NFL owners want guarantees no other business provides (by Sally Jenkins)

[Stadium-Armory]

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/16/AR2011021603846.html?hpid=topnews

NFL owners want guarantees no other business provides

I'm not sure why NFL players and fans should pay the estate taxes for Dan Snyder's children, along with the little Bidwills and Maras. That's one way to think of the current NFL labor dispute. The owners are worried that $9 billion isn't enough revenue growth, and their heirs might someday have to fly commercial. So they're demanding that everybody pony up.

That's really what this is all about. The owners are lucky that the collective bargaining process is so convoluted, and the language of their argument with the players is hard to understand. Because when you peel away the headachy legal terms and expose their real position, it can be summed up very simply: They believe they are entitled to make money every year, even in the midst of disastrous recessions. They think they are owed a living.

They also think your money is actually their money. Or at least, it used to be yours, before you paid it at the box office, paid it at the concessions, paid it in the parking lot, and paid it in countless other ways - from those deplorable "seat licenses" to tax breaks and public funds for new stadiums and renovations, where they can charge you even more.

What are owners really owed in return for their investments? That's what fans must decide, in weighing whose side to support in the impending lockout and labor impasse, which, judging by the belligerent maneuvering of the past week now, likely will last many months and disrupt next season. The core issue is this: Owners resent the fact that a lot of your money is going into the pockets of players, instead of into their own. They contend the players are overpaid, and they are threatening to lock them out as of March 4 if they don't agree to a cut. They say this is a necessary step to ensure future profitability.

But in what other industry do business owners act so entitled to make money every year into the limitless future? Since 1993, the NFL's revenue has grown from around $2 billion to an estimated $9 billion, and the value of every franchise has exploded. Under the current agreement, the first billion goes to the 32 owners right off the top, while players receive a 60 percent split of revenues after that. Now the owners are demanding another billion off the top.

Who exactly is more overpaid? To repeat, the argument is over money that comes out of the fans' pockets. The only question is who should get more of it, the owners or the players that the fans pay to see? After all, they don't pay to see Snyder smoke a cigar, or consult with media advisors.

The owners justify their position by decrying rising "player costs." Player compensation has doubled since 2003, but that's because the wealthiest owners have driven up the market for their stars. Pete Rozelle's wife once observed that, "every owner I ever met thinks he's just two players from winning the Super Bowl."

The cost argument really should be an internal quarrel between the owners. If some of them aren't making enough money,or are even losing money - if some of them built sports palaces and some didn't - whose fault is that? Maybe they don't need a better collective bargaining agreement. Maybe they need a budget.

Yet the owners quite clearly want the players to pick up the tab for some of their excesses - and the fans, too. On Tuesday, Commissioner Roger Goodell made it plain once again that the real driving force behind the owner demands is that they want to free up revenue for "innovation and growth," namely the "costs of financing, building, maintaining and operating stadiums." But bigger stadiums may well mean more expenses shifted to the fans.

What's more, they appear to be digging in, judging by their latest actions. Last week, they walked away from a bargaining session; this week, they filed a charge against the players' union with the National Labor Relations Board. One day, they refuse to talk; the next, they accuse the other side of not negotiating; and then, the next say that the season could be in jeopardy if a deal isn't reached soon.

What's really going on? The suspicion here is that the league owners are simply tempted to see if they can do as well in labor negotiations as the National Hockey League did in improving its financial condition with a lockout a few years ago. But there is a big difference between the NFL and the NHL: Hockey is not nearly so profitable, and the lockout and the accompanying risk of alienating their fans were therefore worth it.

As long the NFL is raking in $9 billion and so many owners are clearly making money, it's pretty difficult for them to claim to be on the high ground, or to cry poor. It's not like they're the airline industry, or even hockey.

So far they have utterly failed to make the case that they are so financially imperiled that players should make sacrifices for them, or fans either. For one thing, they continue to refuse to open their books, presumably because the results could be embarrassing. Disclosure of their real conditions might reveal just how ungenerous they are with the players they claim to care about. Or it might reveal just how mercilessly hard they are working to strip every dime out of the fans.

The next time a league official claims the players make "outrageous sums," as Goodell does, fans should ask themselves the following questions: How much are owners making? And how much of that is due to government subsidies?

Are teams really in danger of losing money - or do they merely crave unlimited "growth?" Would a new labor agreement work for or against the interest of the ticket-buyers? If the owners win a billion-dollar concession from players, what will they do with the money? Will prices go down?

Do they really need a new deal - or have they been getting a sweetheart one all along?

[hitmandm]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

[PortisBetts]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

Before the owners even start paying the players, they have $31,250,000 in their pocket. They START with 31 million dollars. After the split, each owner walks away with another $100,000,000. I dont want to hear them wine. $131,250,000 just to start? and they each want another 31 million? For what? Cry me a river. lets just get the nfl back and stop whining about 131 million dollars isnt enough.

[skull1669]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

Well if the players go elsewhere there would be no NFL.

[Devastate]

Before the owners even start paying the players, they have $31,250,000 in their pocket. They START with 31 million dollars. After the split, each owner walks away with another $100,000,000. I dont want to hear them wine. $131,250,000 just to start? and they each want another 31 million? For what? Cry me a river. lets just get the nfl back and stop whining about 131 million dollars isnt enough.

Don't forgot consessions/parking/stadium endorsments and advertising.. Someone with more knowledge than I can correct me if I'm wrong, but I don't believe that stuff doesn't get shared..

---------- Post added February-16th-2011 at 04:25 PM ----------

Well if the players go elsewhere there would be no NFL.

There will always be an NFL.. the quality of the play/players would suffer for 10 years and then we'd finally be back where we are now talent wise..

However the upside is, we'd probably have more appreciative harder working players, if the current guys bolted.. I know I'm painting with a wide brush and not everyone is slack, but this generation of players has gotten lazy and soft.. I'd give anything to see real men out on a football field again.

[JPCreativelab]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

maybe you should of phrased that "current players" cause where i work, i know its pushed down our throats that "without the stores, we have no business" (i work at the home office) so i think the same applies to the NFL, without players, there is no NFL...

[RiggosMohawk]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

Unfortunately I think you are missing a big point of her story. The Players and the NFL need the Fans more than the Fans need them. All revenue into the NFL comes from the Fans, and we are not watching football/playing FF/buying jerseys/tailgating to see Dan Snyder.

To clarify your first point, and I could be wrong about the newest owner of the Rams, but no owner has ever paid more than 1 billion dollars for an NFL franchise. Not even the Texans paid that much to come into the league as an expansion team, so there are not owners "ponying up" billions for teams. And what financial turmoil would they run into? The salary cap is dictated by the TV contract, which means the owners are *GUARANTEED* to be supplied with revenue sufficient to cover player salary costs. Oh, you built a shiny new stadium? Nobody made you do that. And if you did, and now you can't afford it, don't make the fans pay for your capital investment (which they probably did thru some level of public funding) which helps make the value of your asset skyrocket. Are the fans getting any of that money when an owner sells? Maybe the owners need to tighten their belts and face a "reality every one else has in their life"

Until the owners open their books and show why they are in such dire financial shape, this is unmatched GREED.

[PortisBetts]

Don't forgot consessions/parking/stadium endorsments and advertising.. Someone with more knowledge than I can correct me if I'm wrong, but I don't believe that stuff doesn't get shared..

---------- Post added February-16th-2011 at 04:25 PM ----------

Yeah, i wasnt sure how that worked. That is just the basic numbers based off of the 9 billion with the 1 billion off the top to the owners and then the 60 40 split for the players. I dont know how all of the other stuff works, and obviously since the owners arent opening their books, we wouldnt have access to any of that information anyway.

[AKM311]

That $131M is revenue. There are no figures regarding profit.

What is lost in all this is the players want a share of revenue and not profit. Doing that is a large expense for the owners. It doesn't allow them to balance there sheets correctly, because they have to forfit a large portion of revenue without even knowing if they will even MAKE a profit.

Snyder spent $800M with a large portion on a loan that goes against the books every month. He and every other owner (lots of them brand new) have large expenses on the books for the purchase. The Rooney's and long time owners have no expense for that because they bought the teams for close to nothing.

There is a lot more to this than many realize. Us fans don't care to understand because we don't see anything out of it.

But...the reallll fishy thing to me is how the owners will not share the balance sheets. To me, if they can show them, it changes everything.

[RiggosMohawk]

Before the owners even start paying the players, they have $31,250,000 in their pocket. They START with 31 million dollars. After the split, each owner walks away with another $100,000,000. I dont want to hear them wine. $131,250,000 just to start? and they each want another 31 million? For what? Cry me a river. lets just get the nfl back and stop whining about 131 million dollars isnt enough.

Dude I think this is the best way I have ever seen this put.

Right now each owner gets $131,250,000... GUARANTEED EACH YEAR... to do with however they want, and they are asking for $100,000,000 more on top of that. Unbelievable.

[SWFLSkins]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

Without NFL players the ticket prices would plummet along with the quality of games. There is a reason some guys don't make it to the NFL. Oh and the players shelf life is 3-4 years on average and some don't ever see the big bucks and have health issues that last a lifetime. But go ahead and side with the 32 guys who reap the benefits in a highly slanted system. How many side deals and how many other related companies they own or OTHER perks do the owners get?

---------- Post added February-16th-2011 at 04:36 PM ----------

Dude I think this is the best way I have ever seen this put.

Right now each owner gets $131,250,000... GUARANTEED EACH YEAR... to do with however they want, and they are asking for $100,000,000 more on top of that. Unbelievable.

Aw c'mon they can hardly get by on that.

[skull1669]

There will always be an NFL.. the quality of the play/players would suffer for 10 years and then we'd finally be back where we are now talent wise..

However the upside is, we'd probably have more appreciative harder working players, if the current guys bolted.. I know I'm painting with a wide brush and not everyone is slack, but this generation of players has gotten lazy and soft.. I'd give anything to see real men out on a football field again.

So you saying the guys who play the game now are not hard workers, lazy, and soft?

[Popeman38]

$9.3B total revenue for 2010

$1.0B -> owners

$8.3B to be split b/w players and teams

$4.98B -> players pool

$3.32B -> owners pool

Players total = $4.98B (this is on top of salaries)

Owners total = $4.32B

4.32B/32=135

Each team gets $135M from the revenue sharing system. For a team like Buffalo, they might be turning a couple Mill in profit each year. Ralph Wilson is not making as much from football as his star players. Think about that.....

[SirClintonPortis]

Net income = Sales revenues - cost of selling goods or services - operating expenses.

[Rufus T Firefly]

Sally Jenkins is an idiot.

Owners pony up billions (PV) to buy their teams. If they run into financial turmoil, like in baseball and the NBA, they lose their investment. They deserve to get compensation due their risk. If players don't like it, they can go somewhere else. They don't HAVE to play in the NFL. Its the reality every one else has in their life; the players are whining about it. The Players need the NFL more than the NFL needs the players. The owners should bust this fake union, offer a fair wage, and I'm sure all these college players whose choice is a 40k job or making millions in the NFL will still populate the ranks on the NFL in a few years and the game will be just as good as ever. And perhaps ticket prices will come down.

People get oh, so upset that people who damage their bodies week in and week out to entertain them actually reap some of the financial rewards of said experience.

Life would be so much better if we could just keep them poor and further enrich the billionaire owners who contribute nothing at all to the game.

And people who use the "ticket prices are high becuase of salary" need to take a basic economics class.

[RiggosMohawk]

That $131M is revenue. There are no figures regarding profit.

What is lost in all this is the players want a share of revenue and not profit. Doing that is a large expense for the owners. .

And this is a large expense incurred by every employer in America! How is employee cost not an accountable expense taken out of revenue to determine profits?

It doesn't allow them to balance there sheets correctly, because they have to forfit a large portion of revenue without even knowing if they will even MAKE a profit..

The $131,250,000 is revenue given to the owners. The players cut is the revenue pool used to pay their salaries, so the owners are not forfeiting revenue from their "cut" to pay the players salaries.

Snyder spent $800M with a large portion on a loan that goes against the books every month. He and every other owner (lots of them brand new) have large expenses on the books for the purchase. The Rooney's and long time owners have no expense for that because they bought the teams for close to nothing.

Like many have said about the players, the owners need a dose of financial responsibility then. They were well aware of these costs if they borrowed funds to buy a team. Nobody FORCED them to buy a team. They should be ex-*******-static that their business grows at an incredible rate then, which should make it easier for them to pay off these purchase loans, no?

There is a lot more to this than many realize. Us fans don't care to understand because we don't see anything out of it.

But...the reallll fishy thing to me is how the owners will not share the balance sheets. To me, if they can show them, it changes everything

[SirClintonPortis]

But...the reallll fishy thing to me is how the owners will not share the balance sheets. To me, if they can show them, it changes everything

Sadly, accounting is not something the average fan is going to know much about.

[RiggosMohawk]

$9.3B total revenue for 2010

$1.0B -> owners

$8.3B to be split b/w players and teams

$4.98B -> players pool

$3.32B -> owners pool

Players total = $4.98B (this is on top of salaries)

Owners total = $4.32B

4.32B/32=135

Each team gets $135M from the revenue sharing system. For a team like Buffalo, they might be turning a couple Mill in profit each year. Ralph Wilson is not making as much from football as his star players. Think about that.....

The player pool is used to cover their salaries bro. Otherwise you'd be right on.

"Under that CBA the players got 58% of what is called Total Revenue. This is revenue, minus certain expensese. Last year the league revenue was $8.9 billion. Owners got to take $1 billion off the top of that for expenses, and then 58% of what was left was allocated towards player salaries. 60% of a 7.9 billion pie comes to about $4.75 billion, or just under $150 million per team"

[jnhay]

Don't forgot consessions/parking/stadium endorsments and advertising.. Someone with more knowledge than I can correct me if I'm wrong, but I don't believe that stuff doesn't get shared..

---------- Post added February-16th-2011 at 04:25 PM ----------

There will always be an NFL.. the quality of the play/players would suffer for 10 years and then we'd finally be back where we are now talent wise..

However the upside is, we'd probably have more appreciative harder working players, if the current guys bolted.. I know I'm painting with a wide brush and not everyone is slack, but this generation of players has gotten lazy and soft.. I'd give anything to see real men out on a football field again.

I don't think your argument doesn't make sense for the short or long runs. In the short run, a ton of money will be lost from fans not wanting to watch scrubs. In the long run, what would stop another league from being created that is willing to pay its players? Considering how fans prefer to see talent, why wouldn't they watch that?

[MWLthe1st]

Net income = Sales revenues - cost of selling goods or services - operating expenses.

*Net Income = Sales revenues - COGS - expenses X Tax Rate

[Fred Jones]

If you can't afford to own a team, don't buy it.

If you can't afford to build a stadium without tax payer money, don't build it. Sell the team to someone who can.

If you can't afford to go to the game because of the cost, don't go.

[grantarchy]

$9.3B total revenue for 2010

$1.0B -> owners

$8.3B to be split b/w players and teams

$4.98B -> players pool

$3.32B -> owners pool

Players total = $4.98B (this is on top of salaries)

Owners total = $4.32B

4.32B/32=135

Each team gets $135M from the revenue sharing system. For a team like Buffalo, they might be turning a couple Mill in profit each year. Ralph Wilson is not making as much from football as his star players. Think about that.....

Do you have any evidence of what revenue the Buffalo Bills take in or are you just guessing?

According to Forbes, the team value is $708 million. It was purchased by Ralph Wilson in 1959 for $25,000. That is a $707,999,975 million dollar profit. It also says the team takes in $173 million in revenue.

http://www.forbes.com/lists/2005/30/301765.html

[hitmandm]

Don't forgot consessions/parking/stadium endorsments and advertising.. Someone with more knowledge than I can correct me if I'm wrong, but I don't believe that stuff doesn't get shared..

---------- Post added February-16th-2011 at 04:25 PM ----------

There will always be an NFL.. the quality of the play/players would suffer for 10 years and then we'd finally be back where we are now talent wise..

However the upside is, we'd probably have more appreciative harder working players, if the current guys bolted.. I know I'm painting with a wide brush and not everyone is slack, but this generation of players has gotten lazy and soft.. I'd give anything to see real men out on a football field again.

You may be right but I don't think it would take 10 years.

---------- Post added February-16th-2011 at 08:18 PM ----------

Well if the players go elsewhere there would be no NFL.

Yeah there would.

[Riggo-toni]

The owners have one very justifiable complaint - the need for a rookie slotting scale. Put that in there and meet the players in the middle.

[hitmandm]

Unfortunately I think you are missing a big point of her story. The Players and the NFL need the Fans more than the Fans need them. All revenue into the NFL comes from the Fans, and we are not watching football/playing FF/buying jerseys/tailgating to see Dan Snyder.

To clarify your first point, and I could be wrong about the newest owner of the Rams, but no owner has ever paid more than 1 billion dollars for an NFL franchise. Not even the Texans paid that much to come into the league as an expansion team, so there are not owners "ponying up" billions for teams. And what financial turmoil would they run into? The salary cap is dictated by the TV contract, which means the owners are *GUARANTEED* to be supplied with revenue sufficient to cover player salary costs. Oh, you built a shiny new stadium? Nobody made you do that. And if you did, and now you can't afford it, don't make the fans pay for your capital investment (which they probably did thru some level of public funding) which helps make the value of your asset skyrocket. Are the fans getting any of that money when an owner sells? Maybe the owners need to tighten their belts and face a "reality every one else has in their life"

Until the owners open their books and show why they are in such dire financial shape, this is unmatched GREED.

Unfortunately that is only a philospohical truth. The power lies in the NFL because the desire for the sport is greater than the ability of the fans to replace it. The NFL dervives its reveune from the fans but the fans get an excursion that can hardly be replaced with substitues products elsewhere.

The average value of a team is 1.02 billion dollars. The average owner can sell or maintain ownership. If they maintain ownership they risk an average of a billion dollars. The PV beside the billion dollar figure in my original post means Present Value. In 2011 terms, teams have paid a PV of a billion dollars. Look at baseball, NHL, NBA and those are examples of leagues with teams with TV contracts, Stadiums or arenas and great topline, and they have teams that fail.

Bust this fake union and see if the players play for less. In a free market I think they will. If they don't like it, they can take a BATNA and see if they are better off.