What is a fair profit for an NFL owner?

[pbmax]

Didn't Jones end up paying almost three times as much as the taxpayers? I think Arlington paid $350 million, and Jones something like $900+ million.

I believe the Giants and Jets paid the entire cost, or at least most of it, with no taxpayer input.

A significant portion of that funding in each case comes from PSLs. Definitely a more targeted fund raiser than using government money, but not exactly the owner's pocket either. I think Richardson in Carolina did this for their expansion franchise stadium, didn't he? I am not sure this represents a recent change in stadium financing.

A PSL could represent a revenue source that could be tapped for other uses by the team, but I am unsure it would be as easy a sell if the funds did not go to stadium construction costs.

[Patler]

A significant portion of that funding in each case comes from PSLs. Definitely a more targeted fund raiser than using government money, but not exactly the owner's pocket either. I think Richardson in Carolina did this for their expansion franchise stadium, didn't he? I am not sure this represents a recent change in stadium financing.

A PSL could represent a revenue source that could be tapped for other uses by the team, but I am unsure it would be as easy a sell if the funds did not go to stadium construction costs.

PSLs have been around for 25 years, even when taxpayers were footing the bill for large portions of stadium construction costs. About half the NFL teams already have them in one form or another. Many Big 10 schools have them, but refer to them as a "priority seating surcharge" or other such nonsense. Wisconsin calls them priority seating "contributions" and they apply to only some seats, as I understand it. I don't see a PSL as any different than increasing the package prices for season tickets, its still the owner raising the money, and theoretically, in most cases, the owner is on the hook for the cost if the PSLs don't sell (although it is unlikely to happen).

Didn't the Packers have a one-time surcharge for season ticket holders as part of their renovation financing? Or did they just talk about it but never implement it?

[Joe]

PSLs have been around for 25 years, even when taxpayers were footing the bill for large portions of stadium construction costs. About half the NFL teams already have them in one form or another. Many Big 10 schools have them, but refer to them as a "priority seating surcharge" or other such nonsense. Wisconsin calls them priority seating "contributions" and they apply to only some seats, as I understand it. I don't see a PSL as any different than increasing the package prices for season tickets, its still the owner raising the money, and theoretically, in most cases, the owner is on the hook for the cost if the PSLs don't sell (although it is unlikely to happen).

Didn't the Packers have a one-time surcharge for season ticket holders as part of their renovation financing? Or did they just talk about it but never implement it?

It was $4k per seat, I believe, and yes, it was implemented at least partially. I have no idea if it was every ticket holder or not.

[SkinBasket]

I'm not exactly sure how much the owners are investing in those stadiums but I do know that the tax payers end up paying for the bulk of it.

Partial used to make entertaining statements like this. "Well, I don't know anything about what I'm going to tell you, but I'm going to go ahead and tell you with certainty that I am right."

Is it that you don't want to educate yourself before you form an opinion and argue it as fact, or that you're not capable?

[Tarlam!]

Thanks, RG.

[retailguy]

Reasonableness - "Is it really reasonable how "team X" is spending their money?" "Shouldn't the money be spent in an xx manner instead of how team x spent it?"


The majority of our expenses would not be any different than any other team, except possibly mgmt salaries. Are we structured differently? Don't know. we certainly don't have an "owner salary", but other than that, what's the difference? we don't have distributions, or anything close. Maybe a bit for sarbanes oxley? Not sure, but I'll bet it's negligible.

Also, we have "high" revenue compared to most teams (I think we're 9th). The union better damn well hope we aren't "representative". If we are, then the owners are probably not wrong.

[Guiness]

Reasonableness - "Is it really reasonable how "team X" is spending their money?" "Shouldn't the money be spent in an xx manner instead of how team x spent it?"


The majority of our expenses would not be any different than any other team, except possibly mgmt salaries. Are we structured differently? Don't know. we certainly don't have an "owner salary", but other than that, what's the difference? we don't have distributions, or anything close. Maybe a bit for sarbanes oxley? Not sure, but I'll bet it's negligible.

Also, we have "high" revenue compared to most teams (I think we're 9th). The union better damn well hope we aren't "representative". If we are, then the owners are probably not wrong.

You think they don't just want to audit the books, but critic the spending habits as well? I'm not so sure about that. I think that the players want to see the books to make sure the owners aren't cooking them. I made another post earlier that talked about some of the expenses that were found when they opened the books in '82 - like owners taking large salaries, and declaring it an expense rather than profit.

[Patler]

You think they don't just want to audit the books, but critic the spending habits as well? I'm not so sure about that. I think that the players want to see the books to make sure the owners aren't cooking them. I made another post earlier that talked about some of the expenses that were found when they opened the books in '82 - like owners taking large salaries, and declaring it an expense rather than profit.

Those become interesting discussions. If the owner is an active participant in day to day operations (for example, he functions as the GM, and does not pay a true GM) is he entitled to be a paid employee as well as the owner, with at least some of his compensation considered an expense?

[Guiness]

Those become interesting discussions. If the owner is an active participant in day to day operations (for example, he functions as the GM, and does not pay a true GM) is he entitled to be a paid employee as well as the owner, with at least some of his compensation considered an expense?

lol - I guess the concept of 'fair' gets dragged back into things kicking and screaming!

In a corporation, an "owner's" salary would be considered an expense, if he's an employee of the company. The fact that that employee happens to own the majority of the company's shares doesn't change that.

However, when a certain employee receives a salary an order of magnitude larger than the next highest paid employee, and he happens to also have a controlling interest, it's pretty obvious things are being done that way to control the visible bottom line.

In 1982, the average NFL salary was $90K. One of the owners was shown to have taken a "salary" of $6million. He must've been doing some heavy lifting!

I make no judgment as to whether or not that was a 'fair' amount for the owner to take. He can take whatever he wants out of the company, its his. I take issue, however, with him using that salary to affect the perceived profit of the team, then point to the bottom line and say "we're barely treading water!"

[Patler]

lol - I guess the concept of 'fair' gets dragged back into things kicking and screaming!

In a corporation, an "owner's" salary would be considered an expense, if he's an employee of the company. The fact that that employee happens to own the majority of the company's shares doesn't change that.

However, when a certain employee receives a salary an order of magnitude larger than the next highest paid employee, and he happens to also have a controlling interest, it's pretty obvious things are being done that way to control the visible bottom line.

In 1982, the average NFL salary was $90K. One of the owners was shown to have taken a "salary" of $6million. He must've been doing some heavy lifting!

I make no judgment as to whether or not that was a 'fair' amount for the owner to take. He can take whatever he wants out of the company, its his. I take issue, however, with him using that salary to affect the perceived profit of the team, then point to the bottom line and say "we're barely treading water!"

I agree regarding your example from 1982, but that was in an entirely different era, with entirely different financial relationships between players and owners. But even if the $6 million was not justified, should $150 K (or some amount appropriate for the job he held) been rightly considered as an expense (assuming he held a legitimate position)?

[Guiness]

damn, just lost my post! Stupid auto-logout.

You're asking me to make a 'fairness' judgment again. It depends on the job - Jerry Jones once appointed himself assistant coach. What if he called himself head coach, and decided to pay himself like a top one, at $10mil/year? Al Davis could be called head of football operations, that worth a couple million. In today's salary structure, I don't think anyone would care about those numbers.

What would they care about? Using my 1982 example, $90K is 1.5% of 6 million. Today's annual NFL salary is hard to pin down, but I'm pretty sure it's over $1.5million. Let's use that number, it makes the math easy. $1.5 million is 1.5% of 100 million. If an owner was paying themselves that, it should rightly be considered profit, not an expense for the purpose of league calculations (even if Uncle Sam doesn't care).

IMO I'm not so sure that isn't happening. New England sells out their home games, and I think they have a pretty good stadium. However, their 09-10 cap number was relatively low at $97million. How much is Robert Kraft taking home? What about Clark Hunt in KC, with his league lowest cap number of $82million? (source: USA today, http://content.usatoday.com/sportsda.../salaries/team). You might think it's unlikely, but no one knows, do they?

[swede]

damn, just lost my post! Stupid auto-logout.

That's happened to me at least 5 times after drafting mega-posts. I am wiser now in that I save longer posts before submitting...but it is annoying.

I can bring myself to read the spirited exchanges on this dry topic, but I sure can't imagine being interested enough to do the math with numbers that won't stand still.

[Tony Oday]

Ok so under these examples how are the people in the front office that actually PRODUCE something, aka the business development people that sell to the corporations and season ticket holders luxury boxes and group packages, not making a hell of a lot more money?

[Guiness]

Ok so under these examples how are the people in the front office that actually PRODUCE something, aka the business development people that sell to the corporations and season ticket holders luxury boxes and group packages, not making a hell of a lot more money?

replaceable. relatively easily...at least compared to the ease of replacing, say Peyton Manning.

Brett Favre, of course, proved easy to replace so maybe we should pay Rodgers a lot less? (could NOT resist that one!)

[Tony Oday]

It is EASY to replace the current players, there are thousands every year that dont get drafted and are working at grocery stores and fast food chains. The NFL would suffer 2 years until all the players would fall into line.

I have a homework assignment for everyone that works for a privately owned company. Go to your owner and ask to see their books. They will say "go F*ck yourself" in a more polite way. I would say that to my employees it doesn't matter how much I make because I took the risk and opened my own business.

[ThunderDan]

It is EASY to replace the current players, there are thousands every year that dont get drafted and are working at grocery stores and fast food chains. The NFL would suffer 2 years until all the players would fall into line.

I have a homework assignment for everyone that works for a privately owned company. Go to your owner and ask to see their books. They will say "go F*ck yourself" in a more polite way. I would say that to my employees it doesn't matter how much I make because I took the risk and opened my own business.

The last 2 companies that I have worked for have all had an open books policy. Not only would the owner say please go ahead and look, they would be happy to review the numbers with you.

Now you tie the employees performance and bonuses to the open books policy and you have a hell of a lot of motivated employees who drive the bottom line of your company. We have continuously had 15-20% annual growth. We probably will hit 30% this year.

[retailguy]

The last 2 companies that I have worked for have all had an open books policy. Not only would the owner say please go ahead and look, they would be happy to review the numbers with you.

Now you tie the employees performance and bonuses to the open books policy and you have a hell of a lot of motivated employees who drive the bottom line of your company. We have continuously had 15-20% annual growth. We probably will hit 30% this year.

Are you represented by a union?

[bobblehead]

The last 2 companies that I have worked for have all had an open books policy. Not only would the owner say please go ahead and look, they would be happy to review the numbers with you.

Now you tie the employees performance and bonuses to the open books policy and you have a hell of a lot of motivated employees who drive the bottom line of your company. We have continuously had 15-20% annual growth. We probably will hit 30% this year.

Although my work in the private sector is limited, I have NEVER heard of any privatly held company doing this. Not doubting you, just saying you have been very lucky if such is the case.

[retailguy]

Although my work in the private sector is limited, I have NEVER heard of any privatly held company doing this. Not doubting you, just saying you have been very lucky if such is the case.

Actually, it happens occasionally in certain situations. Typically, it's very small single owner firms where there is a culture of trust as a part of the firm. Dan's right, it can be a great motivator in the right situation. I've never seen nor heard of this in a union shop, and certainly not to the scale of the NFL. Unions naturally breed distrust (IMO), and gain leverage by pitting one group against the other by focusing on differences. Honestly, if everyone lives in happy trusting harmony where everyone treats everyone else with respect and fairness, there is no reason for a union! It would be unnecessary.

[Guiness]

Actually, it happens occasionally in certain situations. Typically, it's very small single owner firms where there is a culture of trust as a part of the firm. Dan's right, it can be a great motivator in the right situation. I've never seen nor heard of this in a union shop, and certainly not to the scale of the NFL. Unions naturally breed distrust (IMO), and gain leverage by pitting one group against the other by focusing on differences. Honestly, if everyone lives in happy trusting harmony where everyone treats everyone else with respect and fairness, there is no reason for a union! It would be unnecessary.

Yes, that's been my experience as well, but with a partnership. I think that has something to do with it, because you're already sharing the data with someone.

Can't see that happening with a union...