$0 - They make their money when they sell the team.
$10 M max. Similar to players on their second contract
$10 - $20 M. Like a top line veteran player
$20 - 30 M. As much as the highest paid players
$30 - 40 M. A bit more than the top players
$40 M+. Its a huge investments in a wildly successful business. A solid return is deserved.
I agree with you that they could play for the CFL or the arena league, but honestly the difference in pay grade is astronomical. I can't think of another industry outside of professional sports where the pay difference is so large. I'm saying neither side is more wrong in my opinion. They are both trying to get as much as they can. Isn't that capitalism at its core?Originally Posted by Tony Oday
I used to tell my sales people what they are worth; their gross salary plus 82% costs (health care, unemployment insurance, pension, car & expenses). The average earned about €50K gross plus variable pay (bonus), so the company placed his/her worth at about 90 K. I would then tell them the interest rate at a bank for for 1 year term was around 3%, so if the owner of the company put his 90 K in the bank for a year he'd gross 2,7K per salesperson. Sounds easy, right?
The thing is, though, for every sales person, there were 3 non-sales people that also had to be paid, though the costs were reduced for non managerial staff to around 35%. So now, we realize that the salesperson needs to earn for 4. That means, every sales person now has to earn a gross profit of around 10k just to keep competitive with the bank.
But, the longer one is willing to put one's cash into a fixed term account, the higher the interest. Then, you talk about shareholder value etc. I think you get the idea of where my speeches went. The same goes for the owners of 31 NFL teams.
...so glad I don't work in sales.
No longer the member of any fan clubs. I'm tired of jinxing players out of the league and into obscurity.
So glad I do.
+1
$$$
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.
Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.
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?
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.
In many cases, it could be. I think the value owners place on their equity versus liquidity can be demonstrated by Ron Wolf. After he left the Packers, he would respond (publicly anyway, some have reported it was also his private answer intended to stop the overture) that he would consider another GM position if it came with a small owner/equity stake. Many teams would have opened the vault to hire a man with those pelts on the wall. No owners were willing to give an employee as important as Wolf a slice of the operation.
Cash on immediate hand is only one way to measure wealth or worth.
Chris Rock once made a joke that if Bill Gates woke up with Kobe Bryant's money, he would run to a window and throw himself out into his lake. Gates net worth is mostly tied (or perhaps was - its been a while since he left) to his equity in Microsoft, not simply his paychecks. And it is from that from which he has accumulated vast wealth. That is as it should be. He built and ran the company that generated that wealth. But that does not make Bryant worth less that his $25 million per year or so. Even if Bill is collecting "only" 1 or 2 million as a board member or CEO emeritus as a paycheck from Microsoft.
Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.
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.
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.
</delurk>
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?
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
Yes you do.
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.
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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That is really overstating it. The Packers are not required to pay dividends and they keep a tremendous amount of near cash on hand (rainy day fund is $127 million - contributions to that fund do not count as profit). The Packers could make zero profit for quite a while and do quite nicely with that reserve.
And Jason Wied has stated they shouldn't need to tap into that fund this year even if the labor issue continues into the fall.
Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.
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?
After lunch the players lounged about the hotel patio watching the surf fling white plumes high against the darkening sky. Clouds were piling up in the west… Vince Lombardi frowned.
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