View Poll Results: What is a fair profit for an average NFL owner?

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  • $0 - They make their money when they sell the team.

    1 3.45%
  • $10 M max. Similar to players on their second contract

    0 0%
  • $10 - $20 M. Like a top line veteran player

    0 0%
  • $20 - 30 M. As much as the highest paid players

    2 6.90%
  • $30 - 40 M. A bit more than the top players

    2 6.90%
  • $40 M+. Its a huge investments in a wildly successful business. A solid return is deserved.

    24 82.76%
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Thread: What is a fair profit for an NFL owner?

  1. #21
    Indenial Rat HOFer bobblehead's Avatar
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    Quote Originally Posted by channtheman View Post
    If an NFL team is worth 600 million (http://wiki.answers.com/Q/How_much_d...NFL_teams_cost - I know this isn't research, it was the first article I could find on a 5 second google search) and they make a yearly profit of just 5% that is about 30 million. I know absolutely nothing about what should be expected to be made in regards to percentages in businesses but I would think a profit of 5-10% of what it is worth yearly sounds about right. So a team like the Vikings worth 600 million should expect a yearly profit anywhere from 30 million to 60 million.
    Why should I start a business, risk my capital, burn out my mind for 5% when I can invest in condos and make 7%? You have a skewed idea of what a business should make. In fairness to you, you admitted as much, right before imposing judgement on what sounds about right. Try 20% or more. Definately more if you incurred debt to build said business.
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  2. #22
    Indenial Rat HOFer bobblehead's Avatar
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    Quote Originally Posted by packrat View Post
    http://www.usatoday.com/sports/footb...finances_N.htm Packer profits went from 34 million to 20.1 to 9.8 million. Someone with $600 million to invest would certainly target a 10% return and would be considered a lousy manager if they only got 5% so something in the $60-30 million range should be considered reasonable. If the owners were to increase their share by the $500 million that has been recently proposed, that would increase earnings per team by about $15 million a year and would get the Packers into the range that should be considered reasonable.
    As I said above. 10% is not enough return to get me to put in the work. Reassess and try again.
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  3. #23
    Captain Rat HOFer Smidgeon's Avatar
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    Quote Originally Posted by bobblehead View Post
    Why should I start a business, risk my capital, burn out my mind for 5% when I can invest in condos and make 7%? You have a skewed idea of what a business should make. In fairness to you, you admitted as much, right before imposing judgement on what sounds about right. Try 20% or more. Definately more if you incurred debt to build said business.
    I think this is incredibly key. Too few people are pointing this out. The owners who have invested heavily in a team, I think, should be making way more than the top employees.
    No longer the member of any fan clubs. I'm tired of jinxing players out of the league and into obscurity.

  4. #24
    Hold the fort a second. Owners do not profit (in the loosest sense of the word - perhaps should say benefit) from yearly profits alone. So to judge yearly profit figures against a 5 or 10% yearly return is like saying you expect your equity holdings to pay dividends equivalent to 5 or 10% of your investment. Not likely to happen and you are forgetting a major point of investing. The asset that you own.

    You need to know the value of the asset over time to determine what kind of ROI you are getting. That plus profit figures (and the rest of the balance sheet) might get you to a fair number. You could also compare to other sports holdings and similarly sized businesses.

    A fair profit is difficult to peg from the outside, it is much harder if you do not know how much the entire business value has appreciated in the time it has been held.
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  5. #25
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    Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.

  6. #26
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by pbmax View Post
    Hold the fort a second. Owners do not profit (in the loosest sense of the word - perhaps should say benefit) from yearly profits alone. So to judge yearly profit figures against a 5 or 10% yearly return is like saying you expect your equity holdings to pay dividends equivalent to 5 or 10% of your investment. Not likely to happen and you are forgetting a major point of investing. The asset that you own.

    You need to know the value of the asset over time to determine what kind of ROI you are getting. That plus profit figures (and the rest of the balance sheet) might get you to a fair number. You could also compare to other sports holdings and similarly sized businesses.

    A fair profit is difficult to peg from the outside, it is much harder if you do not know how much the entire business value has appreciated in the time it has been held.
    Which is exactly why I threw in the first option in the poll. However, absent other sources, a person can't live on increased equity in a business. You have to take out some cash by way of a salary or something.

    Perhaps a better way to have phrased the poll would have been this - "What is a fair salary for an owner to pay himself, assuming the rest of profits are somehow tied up in or reinvested in the business?"

    One of the hangups in the "open your books discussion" is that the players will see how much money the owner pays to himself and his family. As one writer wrote, the amount is not significant in the overall scheme, but there will be some items that can be a PR embarrassment. Lumping these together as an owner's "take" avoids the touchy subjects of $250,000 salaries given to spoiled kids to do nothing, etc. Still, overall, what is an acceptable number for the owner's family if he is payig his average employee $3M/ year, and a bunch of his top employees are getting $10-25M?

  7. #27
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by rbaloha View Post
    Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.
    You can always talk about a fair profit. The fair profit we are talking about is the actual, accurate number, whether it is the owners number, the players number or more likely something in between.
    Last edited by Patler; 03-15-2011 at 06:46 PM.

  8. #28
    Fact Rat HOFer Patler's Avatar
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    If it is reasonable for Irsay to pay Peyton Manning $25 million/year, is it unreasonable for him to pay himself $40 million/year from the Colts? SHould he be satisfied with "only" $10 million?
    Last edited by Patler; 03-15-2011 at 06:47 PM.

  9. #29
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    Quote Originally Posted by Patler View Post
    You can always talk about a fair profit. The fair profit we are talking about is the actual, accurate number, whether it is the owners number, the players number or more likely something in between.
    Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.

  10. #30
    Obscure Rat HOFer Lurker64's Avatar
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    I suspect whoever voted for "$0 - They make their money when they sell the team." is not a Packers fan or has not actually thought about this very much. The Packers cannot be sold for profit, it's in the team charter that if the team is sold that all money goes to charity (I believe it was formerly a war memorial, but it was changed at some point). There is no rich owner to pay the bills when the Packers take a loss, they're only able to do that because they put their profits in a war chest/rainy day fund.

    If you believe that the fair amount of profit for an NFL team is $0, then you believe that the Packers should not exist.
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  11. #31
    Obscure Rat HOFer Lurker64's Avatar
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    Quote Originally Posted by rbaloha View Post
    Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.
    Why is disclosure of anything required for determining what a "fair" profit is? The question is merely "supposing that the books were exposed, what profits by the owners would lend you to conclude 'that's enough'." Saying "I can't answer" a question that presupposes "if the books were opened..." by saying "I can't answer unless they opened the books" is absolutely nonsensical.
    Last edited by Lurker64; 03-15-2011 at 07:09 PM.
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  12. #32
    Indenial Rat HOFer bobblehead's Avatar
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    Quote Originally Posted by rbaloha View Post
    Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.
    Actually its easy to figure. As much as the market will bear. What you think is fair can be voted on by you spending your money on the product. What the players think is fair will be determined by them choosing a different career.
    I don't hold Grudges. It's counterproductive.

  13. #33
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by rbaloha View Post
    Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.
    The reality of the situation is that the players have demanded, and likely will get significant access to their owners' books. They will be given a number or will calulate a number on their own that represents the owners annual cash take from the business. Some players have implied that the owners currently get too much, and more of the $9 billion should go to the players. That presupposes that there is an acceptable amount for an owner to "take". I am trying to get a feel for that number.

    If Peyton Manning is paid $25 million, if the players determine that Irsay paid himself and his family $40 million, will that be fair? Is it fair to him if all gets on a year to year basis is $5 million?

  14. #34
    Can fans ask what is a "fair" amount for a player to make......and then demand lower ticket prices and less commercials about erection difficulties?
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  15. #35
    Anti Homer Rat HOFer Bretsky's Avatar
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    Quote Originally Posted by Bossman641 View Post
    I think the players trying to decide what is fair for the owners is a load of crap. What is fair for the players? Should the nfl review the personal assets and tax returns of the players and determine whether it is fair for Player X to have a 12 million dollar house and ten sports cars.
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  16. #36
    Anti Homer Rat HOFer Bretsky's Avatar
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    Quote Originally Posted by JustinHarrell View Post
    What's fair for the players who go out there and risk their bodies and in extreme cases, lives? It's not an easy negotiation. There are billions of dollars every year. However it gets split, everyone is rich. Just how to split it is the tough part.

    It's their choice; all of life is a choice for employees. If they don't want to make that risk for the absurd amount of money they get, then they can choose to get different jobs.
    LIFE IS ABOUT CHAMPIONSHIPS; I JUST REALIZED THIS. The MILWAUKEE BUCKS have won the same number of championships over the past 50 years as the Green Bay Packers. Ten years from now, who will have more championships, and who will be the fart in the wind ?

  17. #37
    Fact Rat HOFer Patler's Avatar
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    So far, the overwhelming consensus here seems to be that owners should be taking home a lot, $40 million or more.
    Annually, that's approaching $1.5 billion for the 32 teams.
    Annually, player salaries are in the neighborhood of $4.5 billion.
    If the pie is $9 billion, that leaves $3 billion for everything else. Sounds like a lot, but it is only about $100 million per team, which has to pay for coaches salaries, GM, scouting staff, medical and training staff, office and field personnel, and all employees benefits like insurance, equipment costs, travel expenses, food, lodging, etc., etc.

    Yes, there are other sources of income not part of the $9 billion, but there are also other expenses relating to stadium building, renovating and upkeep that I didn't include above.

    My point is this, it doesn't seem that the amount of money that reasonably could go one direction or another is really all that much. A few million extra per owner on the one hand or a few thousand per player on the other shouldn't have stopped this from settling.

    I think this is more about ego and "winning" than it is about the money.

    The owners and players should have considered the saying,"Be careful what you wish for, because you might just get it."
    Last edited by Patler; 03-15-2011 at 09:49 PM.

  18. #38
    Actually Patler, I think they should divvy up 6 million and lower prices for the fans...
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  19. #39
    Stout Rat HOFer Guiness's Avatar
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    Quote Originally Posted by Patler View Post
    Struggle with this? No way, not at all. I have a very clear understanding of the concepts and what I would do as an owner or as a player. How am I being defensive??? Just trying to discuss the exact issue that is the stumbling block in the negotiations, how much the owners make relative to the players.

    When did I get defensive? I have refrained from comment about the strike/lockout for several days, for the most part. Posted some links to a few articles before that, and summarized some impressions I had gotten from reading a lot about it. I do think the players have wanted to decertify from the get-go, but so what? That has nothing to do with being pro-player or pro-owner. After all, the players are pro-player and they decertified.
    I think these last couple of lines are defensive sounding, but maybe that's just me. If you say you aren't, I believe you. That's what makes these types of forums so prone to flame wars. I can't see your facial expressions, if you arched your eyebrows when you said that, hear your tone of voice or see any of your other body english. So it's easy for me to read a (wrong) impression.

    I did??? When? Refresh my recollection please. I don't recall drawing any such parallels. If I did, it sure wasn't a major issue in my mind, because I don't recall doing it. Perhaps you are confusing me with someone else, or I have completely forgotten comments I may have made for the purposes of promoting a discussion.
    [snip]
    If I were in the negotiating room (and I have been) I would be doing much the same thing. There is a point to all of this.
    I'm pretty sure it was you, and your second statement makes me think so even more.

    The discussion was about how players wanted full disclosure, and you said you'd been involved in negotiations, and no one would ever think of asking a private business to reveal it's books.
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  20. #40
    Senior Rat HOFer Bossman641's Avatar
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    Quote Originally Posted by rbaloha View Post
    Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.
    Are you not understanding the question? You don't need actual numbers to determine what a fair rate of return is. Assuming the owner is not making distributions to himself, what is a fair percentage?
    Go PACK

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