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?Originally Posted by rbaloha
$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.
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.
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.
</delurk>
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.
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.
</delurk>
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.
This tirade means nothing. Do you understand profit margin?
Lets look at numbers according to Murphy:
$9 billion in revenue. Owners want $1.32 billion credit. The remaining number to be split is $7.68 billion. A proposed split is 60% players, 40% owners. The players receive $4.6billion. This is 51% of $9 billion. According to Murphy this was not an actual proposal but numbers to keep the negotiating going.
IMO this is somewhat reasonable but it would nice to know other details.
I'm getting the feeling you're not functionally literate, or you're just not choosing to understand the question that is being asked.
Nobody in this thread, except possibly you, is asking "how should we split the money between the owners and players.
People are asking, if we take the owners at face value, that their profits are insufficient... what would be a sufficient profit.
Profit margin (defined as the net profits as a percentage of revenue) has absolutely nothing to do with the discussion. Nor does the actual split of money.
</delurk>
The teams set the players salaries. Sure there is a minimum amount that must go to the players, but most, if not all, teams exceed this minimum and many go right up to the maximum. If teams were worried about their bottom line, the could pay their players less. Why don't they? They think that the players are worth that much to them. The owners want to suppress the true value they themselves put on the players so they can make more money. Is that fair?
Stubborn aren't you. Are you representing the players by any chance?
Go PACK
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