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. #41
    Witness Protection Rat HOFer
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    Quote Originally Posted by Bossman641 View Post
    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?
    Yes you do.

  2. #42
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by Guiness View Post
    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.
    I asked a fairly simple question at that time: how many people worked for privately owned businesses, and if they new exactly how much the private owners made. But I don't see how that makes me defensive, or shows me to be struggling with this issue. In fact, I think I saw through the players position quite clearly.

    My point at the time was that the players were demanding detail that they weren't likely to get, nor did I think they were entitled to it. Some information, sure; but their own accountants auditing (for want of a better description) the teams' books? No way. If that had been a starting point, no problem. But, they never backed off it. Reportedly, they didn't even look at what WAS offered by the owners to see if it helped bridge the gap at all. Then they even seemed to up the demand at the last minute. All this leads me to believe they never had an interest in settling short of de-certification and the inevitable lawsuit.

    During a negotiation it is necessary to try and determine what the other side is really after if they won't tell you. The union wants something, but I'm not sure what it is. It's not the teams' books. That's the front. It's something more important to them than that. Perhaps getting rid of the various franchise tags and RFA designations for a true free agency after a brief rookie contract. Perhaps abolishing the salary cap. Perhaps all of the above. Those may have changed during a negotiated settlement, but would likely have continued in some form or another. The real threat of an antitrust lawsuit could hasten those changes.

    Somewhere in that hodgepodge is the real target of the NFLPA. Its not the teams books and the few million $/team that might be in dispute. It's power and control.

  3. #43
    Obscure Rat HOFer Lurker64's Avatar
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    Quote Originally Posted by rbaloha View Post
    Yes you do.
    No. you don't.

    You do not need to know what the actual profits are to estimate the dividing lines are between an insufficient profit, a sufficient profit, and an excessive profit (assuming there were such a thing). You do not need actual data to address hypothetical questions. To demand real data in order to address a hypothetical question means that you don't actually understand what "hypothetical" means.
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  4. #44
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    Quote Originally Posted by Lurker64 View Post
    No. you don't.

    You do not need to know what the actual profits are to estimate the dividing lines are between an insufficient profit, a sufficient profit, and an excessive profit (assuming there were such a thing). You do not need actual data to address hypothetical questions. To demand real data in order to address a hypothetical question means that you don't actually understand what "hypothetical" means.
    Its an impossible hypothetical. To simplify -- High profit margin -- players receive a bigger share than a small profit margin.

  5. #45
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by rbaloha View Post
    Its an impossible hypothetical. To simplify -- High profit margin -- players receive a bigger share than a small profit margin.
    Ah....we essentially know two of four basic variables, all of which are dependent. They tell us the overall pot is worth $9 billion. We know that the players pool is worth about 4.5 billion. The other two vary directly with one another. All I asked was what you thought was a fair amount for one remaining variable.

    It is really a very easy, very direct, very discussable question. I'm not asking you to verify the numbers.

    a+b+c=$9 billion

    a=player compensation=$4.5 billion
    b=owners "take"
    c=expenses

    I've asked you to tell me what $(b/32) you think is fair. It presupposes that everything else is properly part of c.
    If actual (b/32) > your acceptable (b/32), then perhaps "a" should be increased.
    If actual (b/32) < your acceptable (b/32), then perhaps "a" should be decreased.

  6. #46
    Roadkill Rat HOFer mraynrand's Avatar
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    Quote Originally Posted by MJZiggy View Post
    Actually Patler, I think they should divvy up 6 million and lower prices for the fans...
    Why should they? The fans have shown a willingness to pay even more. It wouldn't surprise me if the NFL in the very near future goes to a significantly expensive pay-per-view, especially if the players get a favorable decision in the current negotiations. That's where the technology is right now anyway.
    "Never, never ever support a punk like mraynrand. Rather be as I am and feel real sympathy for his sickness." - Woodbuck

  7. #47
    Senior Rat HOFer Bossman641's Avatar
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    Quote Originally Posted by rbaloha View Post
    Yes you do.
    Stubborn aren't you. Are you representing the players by any chance?
    Go PACK

  8. #48
    Fact Rat HOFer Patler's Avatar
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    Quote Originally Posted by mraynrand View Post
    Why should they? The fans have shown a willingness to pay even more. It wouldn't surprise me if the NFL in the very near future goes to a significantly expensive pay-per-view, especially if the players get a favorable decision in the current negotiations. That's where the technology is right now anyway.
    Agreed. I've believed that for several years, ever since an NFL marketing guy made the comment quite a few years ago already that it is fundamentally unfair for one fan to have to pay lots of money to attend a game in person, and for another fan to get it completely free at home. His conclusion was that something, just a small amount, would be "fair" to be able to watch from home.

    I think their plans may have been a bit delayed when the NFL Network wasn't greeted with open arms and open checkbooks by the cable companies/fans. But they have their inroad, and we are being indoctrinated.

  9. #49
    Senior Rat HOFer Bossman641's Avatar
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    Quote Originally Posted by Patler View Post
    I asked a fairly simple question at that time: how many people worked for privately owned businesses, and if they new exactly how much the private owners made. But I don't see how that makes me defensive, or shows me to be struggling with this issue. In fact, I think I saw through the players position quite clearly.

    My point at the time was that the players were demanding detail that they weren't likely to get, nor did I think they were entitled to it. Some information, sure; but their own accountants auditing (for want of a better description) the teams' books? No way. If that had been a starting point, no problem. But, they never backed off it. Reportedly, they didn't even look at what WAS offered by the owners to see if it helped bridge the gap at all. Then they even seemed to up the demand at the last minute. All this leads me to believe they never had an interest in settling short of de-certification and the inevitable lawsuit.

    During a negotiation it is necessary to try and determine what the other side is really after if they won't tell you. The union wants something, but I'm not sure what it is. It's not the teams' books. That's the front. It's something more important to them than that. Perhaps getting rid of the various franchise tags and RFA designations for a true free agency after a brief rookie contract. Perhaps abolishing the salary cap. Perhaps all of the above. Those may have changed during a negotiated settlement, but would likely have continued in some form or another. The real threat of an antitrust lawsuit could hasten those changes.

    Somewhere in that hodgepodge is the real target of the NFLPA. Its not the teams books and the few million $/team that might be in dispute. It's power and control.
    Good point. My guess is that they are after the franchise tag and easier player movement in general.
    Go PACK

  10. #50
    Obscure Rat HOFer Lurker64's Avatar
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    Quote Originally Posted by rbaloha View Post
    Its an impossible hypothetical. To simplify -- High profit margin -- players receive a bigger share than a small profit margin.
    Players do not, have not, and will not receive a share of NFL profits. Players are paid for their services, and they are entitled to as much as they can convince any NFL team that they are worth. This is, of course subject to external considerations like "the salary cap" (when there is one) or "nobody can pay you more money than they actually have." Profits are simply the total revenue a team receives above all costs incurred; costs like paying players, stadium upkeep and renovation, paying staff, etc.

    The salary cap (and floor) are the determining factors in how much of the 9 billion and change goes to the players. The cap has been calculated on a formula based on total revenue minus offsets built into the CBA. So the total amount that the players receive has nothing to do with the profits that individual teams make, it is simply a function of the total revenue that the league brings in. Individual teams may reap large profits, or losses depending on things like unshared revenue, level of compensation to coaches and executives, miscellaneous market forces, etc.

    The point has been raised by the owners that their profits have been shrinking to the point that they feel uncertain about their ability to continue to grow the game. This is a statement essentially saying that "our profits are not big enough." The solutions examined include such things are "growing the total pot" (e.g. the proposed 18-game season) as well as "reducing the fraction that the players get" (which is the main point of contention in the labor strife.)

    The question at hand is not how should we split the total gross income of the league between the players and the owners in an equitable fashion. The question at hand is, at what level of profit should we consider a team's profits to be acceptable and any requests to increase those profits that come at the expense of others to be unreasonable.

    From the perspective of the union, the players do not ordinarily care whether teams make large profits or any profits at all. The amount of money they receive individually is determined by their negotiated contracts and the amount of money that they receive collectively is determined by the terms of a collective bargaining agreement that disregards the profitability of individual teams and only considers the total amount of money brought in by the league as a whole. The only reason that the players have to care about the owner's profits in this situation is that ownership is claiming "our profits are insufficient." So the question raised by Patler is "at what point would a reasonable person conclude that the owner's profits are sufficient."

    To answer this question, one does not need to know what the actual profits are. The actual profits are not relevant to questions of the form "If the profits were $X, instead of what they actually are, would that be sufficient? Would that be excessive?"

    If you think you need to know what the profits actually are to figure out what it would be reasonable/unreasonable for them to be, then you're simply wrong. I do not need to know the actual cost of a sandwich to know that $.25 is too little to charge for the sandwich and $250 is too much. The same is true of NFL team profits. If each team is losing $250 million dollars a year, then we can all agree that profits are too large. If each team is making $250 million in profit every then we can agree that profits do not actually need to be increased further (given that $250m x 32 teams is $8b, which would mean only around 11% of the gate is actually spent.) The actual profit number that around which "that's probably enough" occurs is somewhere between -$250,000,000 and $250,000,000. All anybody is asking here is "given the facts about the value of teams, and the total revenue of the league, where between -$250m and +$250m does the 'that's just about enough' line fall?"

    And giving an estimate to the answer to that question does not require any additional facts.
    Last edited by Lurker64; 03-16-2011 at 01:45 AM.
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  11. #51
    Quote Originally Posted by Patler View Post
    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?
    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.

  12. #52
    Quote Originally Posted by Patler View Post
    ....

    My point at the time was that the players were demanding detail that they weren't likely to get, nor did I think they were entitled to it. Some information, sure; but their own accountants auditing (for want of a better description) the teams' books? No way. If that had been a starting point, no problem. But, they never backed off it. Reportedly, they didn't even look at what WAS offered by the owners to see if it helped bridge the gap at all. Then they even seemed to up the demand at the last minute. All this leads me to believe they never had an interest in settling short of de-certification and the inevitable lawsuit....

    Somewhere in that hodgepodge is the real target of the NFLPA. Its not the teams books and the few million $/team that might be in dispute. It's power and control.
    They did receive the complete set of books in the last go around with this lawsuit, in 1992. So to say asking for them again is simply a stalling technique makes an assumption that the players don't agree with. Should the books be opened, their auditors will get to comb through them, whether the owners were willing or not. You think the lawsuit is the goal, but I think the lawsuit is simply the means. Its the point of greatest leverage.

    The owners are making a similar calculation. They believe that they can withstand the request in court (or NLRB) this time.

    But I would love to read what you read about the owner's increased financial information offer and the change in the player's demand. I have not found it yet.
    Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.

  13. #53
    CutlerquitRat HOFer
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    Cap pay at $1 million a year. If the players dont like it they can ALWAYS start their own league.
    Swede: My expertise in this area is extensive. The essential difference between a "battleship" and an "aircraft carrier" is that an aircraft carrier requires five direct hits to sink, but it takes only four direct hits to sink a battleship.

  14. #54
    You could answer Patler's question with the available facts. But the number would be virtually meaningless, unless you know how much the asset has appreciated over the purchase price, you know nothing about the value of the operation.

    And without the books, the numbers can be easily manipulated. And they have been before.

    To answer again Patler's much older question about whether I have ever known how much the owner's of a company make, the answer is yes, twice. Once with a large company and again with a small privately owned outfit. In both instances, the financial statements were gone over for every unit each quarter. It very much puts the employees in a position to think about the health of the company in decisions they make.
    Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.

  15. #55
    Quote Originally Posted by Tony Oday View Post
    Cap pay at $1 million a year. If the players dont like it they can ALWAYS start their own league.
    They wouldn't, but someone could at those prices. The only roadblock would be stadiums. See AFL, 1960-1969.

    ABC (though the ESPN contract would complicate it) might televise it. And if they didn't, TNT or Versus would.
    Last edited by pbmax; 03-16-2011 at 08:37 AM.
    Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.

  16. #56
    Quote Originally Posted by Lurker64 View Post
    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.
    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.

  17. #57
    CutlerquitRat HOFer
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    Quote Originally Posted by pbmax View Post
    They wouldn't, but someone could at those prices. The only roadblock would be stadiums. See AFL, 1960-1969.

    ABC (though the ESPN contract would complicate it) might televise it. And if they didn't, TNT or Versus would.

    Thats what I mean. If they dont like making 10's of millions then f them and now you are capped EVERYONE makes $1 Million a year base salary and $100,000 per win for every player. Dont like it? Want to see the books? Start your own damn league and look all you want.
    Swede: My expertise in this area is extensive. The essential difference between a "battleship" and an "aircraft carrier" is that an aircraft carrier requires five direct hits to sink, but it takes only four direct hits to sink a battleship.

  18. #58
    Quote Originally Posted by Tony Oday View Post
    Thats what I mean. If they dont like making 10's of millions then f them and now you are capped EVERYONE makes $1 Million a year base salary and $100,000 per win for every player. Dont like it? Want to see the books? Start your own damn league and look all you want.
    And my point is that the league will not do it because it needs THESE players. At least in the short term.
    Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.

  19. #59
    CutlerquitRat HOFer
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    No what they need are teams, the union is gone and I am sure in most states there is no collective bargaining with non union employees so start the season. If the players want to play they show up, rookies from college more than likely NEED the cash so they would work for that and in the end actually get MORE money than if they graduated and took a job at say Google. The current players have the choice to not play for sure but then they have to pay off their debts with a job that their semi complete degrees will get them.
    Swede: My expertise in this area is extensive. The essential difference between a "battleship" and an "aircraft carrier" is that an aircraft carrier requires five direct hits to sink, but it takes only four direct hits to sink a battleship.

  20. #60
    Quote Originally Posted by Tony Oday View Post
    No what they need are teams, the union is gone and I am sure in most states there is no collective bargaining with non union employees so start the season. If the players want to play they show up, rookies from college more than likely NEED the cash so they would work for that and in the end actually get MORE money than if they graduated and took a job at say Google. The current players have the choice to not play for sure but then they have to pay off their debts with a job that their semi complete degrees will get them.
    Then in your view, if to abrogate current player contracts all that was needed was decertification, then why are the owner's locking out the players?
    Bud Adams told me the franchise he admired the most was the Kansas City Chiefs. Then he asked for more hookers and blow.

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