NFL Union Leader Paints Bleak Picture of Future

[BF4MVP]

http://sports.yahoo.com/nfl/news;_ylt=Ak7Q2UBZmfW7uesS7vU7gY85nYcB?slug=ap-superbowl-nflpa&prov=ap&type=lgns
Way to screw up the best thing we had going, idiots.

Now football is going to have all the problems baseball has. Not good news for Packer fans at all...Without a cap, the Packers will eventually become the Brewers...Yuck.

Lockout in 2011? That's freaking awesome too... :roll:

[channtheman]

If we experience a lock out then the NFL can count on having at least one less fan. I've got plenty of other things I could find to waste money on.

[Joemailman]

As long as TV revenues are shared, the Packers will be okay.

Don't get too carried away by the rhetoric right now. Posturing always goes on in situations like this.

[The Leaper]

The Packers won't be the Brewers. The Packers can charge $250 a ticket if they need to. Their fan base provides large TV ratings that belies the small market status of their home city. There are plenty of ways for Green Bay to survive...it just would be a little harder.

[Joemailman]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.

[ND72]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


Yeah..those $450,000 minimum contracts just SUCK! :lol:

[channtheman]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


Yeah..those $450,000 minimum contracts just SUCK! :lol:

Yeah man I don't know what I would do with myself if I had to take a year off with that kind of salary. I suppose I WOULDN'T buy a new car... damn. :lol:

[ICU81MI]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


Yeah..those $450,000 minimum contracts just SUCK! :lol:

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.

[packrulz]

The Packers won't be the Brewers. The Packers can charge $250 a ticket if they need to. Their fan base provides large TV ratings that belies the small market status of their home city. There are plenty of ways for Green Bay to survive...it just would be a little harder.

No way GB could charge $250 a ticket and still sell out every game, I know I couldn't afford that. I remember games being blacked out from TV in the 80's because they weren't sold out. Jerry Jones would love to do away with the salary cap and throw small market teams like GB under the bus. I hope that Goodell is smart enough to know that doing away with the salary cap would be harmful to the league. They need to base the cap more on incentives and cap the amounts the teams pay first round rookies who haven't proven they can play in the NFL and may or may not pan out, like Tony Mandarich or T-buck.

[Scott Campbell]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


With each player getting only one vote, the more mainline guys have the real voting power in the union.

[sheepshead]

This is very disturbing. The union is headed by an Obama (not to go all FYI on ya) supporter and the union is empowered by the administrations pro union stance on everything. I dont think sports leagues are going to see the days like they did in the 80s and 90s any time soon or maybe ever. There was a nostalgia from baby boomers that fueled the attendance and memorabilia craze for a long time, but that's over. The economy will not recover for years and the union could not have picked a worse time for this, but when has that ever stopped them? Just look at folding leagues. Less suitors for Super Bowl commercials this year lower ad revenue across the board. That trend will continue in my opinion. I heard the union wants the teams to open their books? Screw them. The league needs a rookie cap and more performance based contracts to SURVIVE.

[channtheman]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


Yeah..those $450,000 minimum contracts just SUCK! :lol:

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.'

Dude, someone who makes 225,000 dollars playing football is still making more than almost every working man in the country, save for those that went to school for 8 years to become doctors.

[swede]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


With each player getting only one vote, the more mainline guys have the real voting power in the union.

I wonder if the new union boss will be as successful as Gene Upshaw was with holding the union together during difficult negotiations. Is the union looking for something other than a bigger slice of the pie?

I think the owners need to play a little divide and conquer here. They should publically commit to a package that increases compensation considerably for the veterans, the regular guys, the players that give the league stability. I always appreciated the rule that gave teams cap consideration for hiring veterans. That kind of creative consideration for the average NFL player would help undercut the union leadership. Given the way that the money in the compensation pot has sloshed over to first round rooks and select free agents I would think that 60-70% of the players would respond favorably to a package that benefits them even as it allows owners to keep 50% of the gross.

[Fritz]

It's funny how we bitch about how much football players make, as if we have no control over it. They make the money they do because so many of us watch them and support them. We're complicit in this to some extent, people.

We live in a culture that nearly worships hyper-masculinity. We are encouraged to consume, to relax - we work so hard! We've earned it! - to praise the violence of the sport.

The money they make reflects the values of our culture. We love to talk about how policemen are underpaid - but in fact if our culture thought they were more important, then they'd make more. We pay lip service to all the right things but our actions speak the truth.

We're okay with guys maiming themselves long term for our entertainment. Just don't make us confront the reality of it.

[swede]

Well, it certainly is crazy money, Fritz.

That said, how could anyone argue that the players--who are little short of gladiators that risk their health to entertain us--do not deserve a big chunk of the cash they generate? Count me as someone who doesn't complain how much the players make. I complain how unfair the disparity is between some players and most players. That cannot be good for the long term helath of the league.

[Scott Campbell]

I wonder if the new union boss will be as successful as Gene Upshaw was with holding the union together during difficult negotiations. Is the union looking for something other than a bigger slice of the pie?


I think the size of the slice of the pie is the biggest negotiating point, but there are others. It won't be getting bigger. The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.

[pbmax]

The economy will not recover for years and the union could not have picked a worse time for this, but when has that ever stopped them?
Unfortunately, the Owners picked this moment, not the Players.

[swede]

I wonder if the new union boss will be as successful as Gene Upshaw was with holding the union together during difficult negotiations. Is the union looking for something other than a bigger slice of the pie?


I think the size of the slice of the pie is the biggest negotiating point, but there are others. It won't be getting bigger. The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.

If that is the case, that the owners are determined to shrink the slice in order to stay viable during a prolonged economic downturn, then we really are in for trouble. No one likes a pay cut. And it is hard for anyone to say if the the owners are taking a "pay cut" as much as the players are if they won't show us the books.

In a perfect world, the league/player negotiations are interrupted by an emissary from the Cardassians who have become addicted to NFL football broadcasts that have leaked out into open space and slipped through a wormhole. Looking at the business end of a Cardassian disrupter frightens both sides into an agreement brokered by the wisdom of an advanced--if somewhat ruthless--extraterrestrial civilization.

[Smidgeon]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.


Yeah..those $450,000 minimum contracts just SUCK! :lol:

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.

Let's not kid ourselves here. I live in the bay area. My sister lives in SF. We have both either survived before or are surviving currently on less than 45k. That's right. 10x less than the amount that "isn't a huge sum of money". While the value of 450k in SF doesn't go as far as the same value in Wisconsin or Tennessee, it is still a huge sum of money to be a yearly salary no matter where you live. Even assuming that half of that goes to taxes, 225k is still a lot of money. Is it a monstrous amount? No. But it isn't something to complain about.

Part of the problem is that people in general don't know how to be judicious with their finances. Players hit it rich and go nuts.

[Smidgeon]

It's funny how we bitch about how much football players make, as if we have no control over it. They make the money they do because so many of us watch them and support them. We're complicit in this to some extent, people.

We live in a culture that nearly worships hyper-masculinity. We are encouraged to consume, to relax - we work so hard! We've earned it! - to praise the violence of the sport.

The money they make reflects the values of our culture. We love to talk about how policemen are underpaid - but in fact if our culture thought they were more important, then they'd make more. We pay lip service to all the right things but our actions speak the truth.

We're okay with guys maiming themselves long term for our entertainment. Just don't make us confront the reality of it.

Well said.

[channtheman]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

[pbmax]

The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.
So are you saying the Union has lost Upshaw's mind control device? :lol:

Because the owners voted yes of their own volition once already. But with four years to prepare, believe they are in a position to drive a harder bargain. Rumblings that factions wanted to opt out preceded the recession and the credit market collapse (not saying those are not real issues, but they may be temporary). Its not as simple as win-win in this negotiation. Each faction (and there are different interests among the owners) wants its pound of flesh.

The owners are already WAY below the 59.2% they COULD spend on players, They are at 52% or so for this year. This is about local revenue sharing and salary floor. And the only person who isn't admitting this is Goodell (publicly at least).

Talk about 59.2% being the issue is a red herring. The owners have never spent to the limit. That is also a reason the complaining about high first round draft pick contracts is half-baked. There is no mechanism (beside the soon to be departed salary floor) that will force teams to spend the savings on veteran players.

[Patler]

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.

1. Taxes? Federal tax bill on $450,000 of taxable income is $135,183. I believe the maximum marginal tax rate is 35%. State taxes vary, but does any state have more than a 6% marginal rate? Players with better salaries should have advisers who lessen their tax bills with investments and other programs for their money.

Insurance? What insurance? The player, his spouse, and his family get medical, dental and prescription benefits paid for by the league. If vested, the benefits continue for 5 years just as for active players, to allow the player to get established in a new career. Who of us gets 5 years benefits while pursuing a new career?

Car, homeowners, etc policies are no different for the player than for anyone else in the same home with the same vehicles.

2 & 3. Does the person in the military service get to pick where they will serve? They don't even have the right to "quit" at any time for any reason. He/She may have to serve in a combat zone, or not. No choice, different risks, minimally different pay. Some employers will "offer" transfers to other locations. Some are take it, or leave, just like the athlete.

Pro athletes have a GREAT thing going for them. I don't feel the least bit sorry for them, regardless of the "risks," the inconvenience and the lack of choices they may have for a few years.

[Maxie the Taxi]

The whole idea of a "union" for these guys is laughable. It's like George Clooney being a union member. I thought unions were for the little guys.

[Smidgeon]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

[ThunderDan]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

[Smidgeon]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

Your numbers are arbitrary. Also, they fail to take into account the comparative value in other fields when they sell their businesses.

[Patler]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.

[digitaldean]

This is the case of trying to kill the goose that's laying the golden eggs.

The players already make 50-53% of league revenues. Yes, they are the reason the game is what it is. But, you still have to have someone taking the financial risks to outlay this money.

Killing the salary cap, though not the end of everything, is a MAJOR step toward disaster.

It's this perfect storm of idiots (De Smith, and greedy owners like Jerry Jones) that may cause no football in 2011.

No regards for the fans, the local economies that depend on this (ESPECIALLY Green Bay!!!).

Goodell, the owners and the players union will torpedo this era of unprecedented wealth for the NFL.

They have a stranglehold for now on the sports entertainment industry. Leaving the door open for an alternative to come in to fill that void in 2011 is a monumentally stupid and dangerous approach.

[pbmax]

The whole idea of a "union" for these guys is laughable. It's like George Clooney being a union member. I thought unions were for the little guys.
Maxie, there is a book from the last 15 years or so called "Lords of the Realm". It is about the history of ownership in baseball and their relationships to their employees. It makes a compelling case that the owners could have avoided a strongly Unionized workforce at any number of critical junctures, and certainly could have limited the gains the Union made during the early years of Baseball's labor strife with a simple, logical evaluation of their position. But the owners willful disregard for treating players fairly and equally along with an iron clad belief in the very thin legal basis for the Reserve Clause caused them to overestimate their position. Their long-standing feelings of paternalism blinded them to the possibility that the players would act in concert for themselves.

It is one of the older stories of corporations in the 20th century. When a company gets a Union, it has usually been asking for one longer than it can imagine. It is much the same willful blindness that has caused the NFL and its Union to overlook its older veterans medical issues for too long and the same impulse that initially led the league to try to bury the concussion issue by wrapping its arms around the research and snuffing it out. The short-term fear of a new cost (disability payments and lawsuits) caused them both to ignore very real problems. In the case of the formation of a Union, both leagues waited until it was too late.

It is also no accident that what was an acceptable labor cost scenario in the first half of the century was made obsolete when National Television contracts brought wealth to all teams, far beyond the owner's previous ability to realize income mainly through the gate receipts. Had the owners opened the spigot when these contracts hit (or had the mechanism existed to channel that revenue in more or less automatically) then the push for strong Union action would have slackened.

[pbmax]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.
Those numbers are pretty arbitrary (not even Peyton is going to get 10 years at 26 million and see it all), but the QB guarantees in this range are only for a franchise QB and would only be for a portion of the overall contract.

But there is another point. That model only works if you pay cash. If you borrow money, you need cash to pay the amortization on your debt.

[ThunderDan]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

Your numbers are arbitrary. Also, they fail to take into account the comparative value in other fields when they sell their businesses.

Jerry Jones bought the Cowboys and the stadium for $140 M in 1989.
Z Wilf paid $600 million for the Vikings in 2005.

I would argue that the Cowboys team is worth more than the Vikings.

$140 M in 1989
$850 M in 2005?

That would be a $710 M appreciation in 16 years.

[Patler]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.
Those numbers are pretty arbitrary (not even Peyton is going to get 10 years at 26 million and see it all), but the QB guarantees in this range are only for a franchise QB and would only be for a portion of the overall contract.

But there is another point. That model only works if you pay cash. If you borrow money, you need cash to pay the amortization on your debt.

Mannings too old, but Favre got a $100 million contract 10 year ago and has collected every bit of its value, one way or another. I would not at all be surprised to see young QBs, like Rodgers or others, earn $250 million over the next 10 years.

But, lets look at the hypothetical investment another way:

$400 million invested at a 5% annual return, compounded annually, after 10 years would have a value of $651 milion. Not an outstanding investment by any means.

[Patler]

Many take the position that it is the players who made the league, almost as if the owners were just along for the ride. I disagree. The players also needed the rich owners who could risk financial losses without going bankrupt, etc. I seriously doubt that a league full of teams like the Packers would ever have grown the way it did. Owners took risks before the rewards were big, and it paid off.

The owners need the players, absolutely. But the players also need the league to be in the hands of the wealthier movers and shakers of society. They really need each other.

[ThunderDan]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.
Those numbers are pretty arbitrary (not even Peyton is going to get 10 years at 26 million and see it all), but the QB guarantees in this range are only for a franchise QB and would only be for a portion of the overall contract.

But there is another point. That model only works if you pay cash. If you borrow money, you need cash to pay the amortization on your debt.

Mannings too old, but Favre got a $100 million contract 10 year ago and has collected every bit of its value, one way or another. I would not at all be surprised to see young QBs, like Rodgers or others, earn $250 million over the next 10 years.

But, lets look at the hypothetical investment another way:

$400 million invested at a 5% annual return, compounded annually, after 10 years would have a value of $651 milion. Not an outstanding investment by any means.

If you could tell me how to make 5% a year for the last 10 years you should have been a financial planner.

Also you haven't figured in taxes or that the S&P over the last 10 years has given a negative return.

[Patler]

If you could tell me how to make 5% a year for the last 10 years you should have been a financial planner.

Also you haven't figured in taxes or that the S&P over the last 10 years has given a negative return.

So you have a lost decade to deal with right now, to emphasize a point about 0% returns. Had we had this conversation a few years ago, 5% would have looked paltry. Either is an oddity, not a "normal" 10 year period. Depending on whether you accept the geometric or arithmetic average calculations, the annual rate of return investing in stocks over the last 150 years or so is generally agreed to be between 7% and 8.5%. Buying a football team is a long term investment, more like a lifetime of investing. You can pick a small window to look much better or much worse if you want to.

We have also had unprecedented growth in the NFL revenues for the last 15-20 years or so. I suspect it will slow, and could even retrench a bit.

I wasn't proposing an equal investment return, just showing that your hypothetical growth of $400 million to $750 million in 10 years is not so great. Just a 5% return gets you to $650 million. 6% compounded monthly gets you to $730. If I had $400 million to invest, I would look for better potential returns than that.

[Smidgeon]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.
Those numbers are pretty arbitrary (not even Peyton is going to get 10 years at 26 million and see it all), but the QB guarantees in this range are only for a franchise QB and would only be for a portion of the overall contract.

But there is another point. That model only works if you pay cash. If you borrow money, you need cash to pay the amortization on your debt.

Mannings too old, but Favre got a $100 million contract 10 year ago and has collected every bit of its value, one way or another. I would not at all be surprised to see young QBs, like Rodgers or others, earn $250 million over the next 10 years.

But, lets look at the hypothetical investment another way:

$400 million invested at a 5% annual return, compounded annually, after 10 years would have a value of $651 milion. Not an outstanding investment by any means.

If you could tell me how to make 5% a year for the last 10 years you should have been a financial planner.

Also you haven't figured in taxes or that the S&P over the last 10 years has given a negative return.

5% a year is nothing. Especially when you consider that in the last 50 years, T-rates have been above 4% in 535 of the 600 months and above 5% in 417 of the 600 months. Those are federally guaranteed rates. Even taking the common floor of a 4% rate and the poor floor of about 2.5-3% during 2009, it doesn't take anything special to pull in 5% a year. You weight your portfolio towards T-stocks and pull in an almost risk free consistent investment. On the other hand, the higher your target rate, the more risky it gets. But 5% is not hard at all, and it isn't that risky.

[Scott Campbell]

If you could tell me how to make 5% a year for the last 10 years you should have been a financial planner.

Also you haven't figured in taxes or that the S&P over the last 10 years has given a negative return.

So you have a lost decade to deal with right now, to emphasize a point about 0% returns. Had we had this conversation a few years ago, 5% would have looked paltry. Either is an oddity, not a "normal" 10 year period. Depending on whether you accept the geometric or arithmetic average calculations, the annual rate of return investing in stocks over the last 150 years or so is generally agreed to be between 7% and 8.5%. Buying a football team is a long term investment, more like a lifetime of investing. You can pick a small window to look much better or much worse if you want to.

We have also had unprecedented growth in the NFL revenues for the last 15-20 years or so. I suspect it will slow, and could even retrench a bit.

I wasn't proposing an equal investment return, just showing that your hypothetical growth of $400 million to $750 million in 10 years is not so great. Just a 5% return gets you to $650 million. 6% compounded monthly gets you to $730. If I had $400 million to invest, I would look for better potential returns than that.


Not only that, but the owner's equity position is constantly at risk. Yes, they've appreciated nicely over the life of the league. But so did housing. Until it didn't.

Players put no capital at risk.

[packrulz]

As NFL free agency begins, owners have edge over players

By Pete Dougherty • pdougher@greenbaypressgazette.com • February 7, 2010

The NFL Players Association’s otherwise favorable contract with the NFL from 2006 contained one hidden but major pitfall for the union.
The poison pill that was supposed to impose huge incentives on both sides to keep extending the collective-bargaining agreement turned out to be hemlock for the players only.

That’s why NFL owners exercised their right to opt out of the agreement last year, and why the league will operate under new rules when the free-agent market opens March 5 — rules that favor owners far more than players.

For one, players aren’t eligible for unrestricted free agency until they’ve been in the league for six years rather than the previous four years. That’s a big loss for performers in a young man’s game and takes 212 players off the open market this offseason.

Then there’s the loss of the salary cap, which was supposed to be poison for the owners. Teams can spend as much money as they want on players, which should drive up salaries.

But there’s also no salary floor, unlike past years, which means teams can spend as little as they want as well. In today’s weak financial climate, some clubs will be looking to cut costs drastically for the short term, and their biggest expense by far is players.

So that supposed poison pill looks pretty good to many owners now.

“In theory, the lack of a cap was as harsh a pill as anything the players have, creating a market for teams to buy up all the best players at any price,” said Andrew Brandt, the former Green Bay Packers vice president who blogs about the business side of the NFL for www.NationalFootballPost.com.

“However, the world has changed since 2006, both in the financial markets and the public appetite for financing stadiums.”

Though the sides have until the start of the new league year on March 5 to reach agreement on a new CBA, they’re so far apart that the uncapped rules almost certainly will be in place. Commissioner Roger Goodell admitted that publicly last week.

The true zero hour, then, won’t come until March 2011, when the CBA runs out. Negotiations often need a fast-approaching, hard deadline to produce a deal, but if that doesn’t happen in the next year, the league and its players will have three options in 2011: They can operate under the same rules as 2010; the players can strike; or the owners can lock out the players.

Judging by several steps the league and teams have taken, it’s all but certain the owners will lock out the players if it comes to that.

Over the past year, many teams have included clauses in their coaches’ contracts that include pay cuts of up to 50 percent and the right to terminate the deals with 60 days notice if there’s no football in 2011.

Also, recently extended TV deals mandate payment to the NFL regardless of whether there’s football. Brandt said the networks will get credits in return if that’s the case, but teams nevertheless will have a steady stream of income even if there are no gate receipts.

Finally, the owners have hired the attorney who was point man for the NHL’s lockout in 2004-05.

DeMaurice Smith, the NFLPA’s new executive director, said Thursday it’s a certainty there won’t be football in 2011 because of a lockout.

“On a scale of 1 to 10,” Smith said, “it’s a 14.”

The major issue is how much of gross revenues the players should be paid. Under the previous agreement, they received about 59 percent, but the owners want to reduce that significantly. They say the NFL’s profit on the approximately $8 billion-a-year business dropped by $220 million from 2005, mostly because of payments for new stadiums, while players’ salaries continued to rise.

Smith wants the owners to open their books to prove the financial hardship. The owners say that’s useless because other leagues that have done so endured work stoppages anyway. And around it goes.

Both sides have amped up their public-relations campaigns this week at the Super Bowl to sway public opinion and posture for negotiations. Goodell and Smith held separate press conferences, and Smith made the boldest declaration of the week when he said it will be “virtually impossible” for the players to bring back a salary cap now that there won’t be one in 2010.

Those are strong words meant to improve Smith’s leverage — aside from withholding the players’ services, an uncapped system is the players’ most valuable negotiating chip.

But public comments early in negotiations will mean little when talks get serious, and it’s still hard to imagine the owners agreeing to any system that doesn’t include some kind of salary restriction, whether it’s a salary cap or some sort of luxury tax.

“Every sport has some kind of limitations,” Brandt said, “and each team — even in baseball — has their own ‘cap,’ which is really a budget. Smith has drawn from the old Gene Upshaw line that, once a cap is gone ,it is virtually certain not to return, but he needs to be careful not to engage in ultimatums.”

For this offseason, conventional wisdom says the free-agent market will be even more overpriced than usual because of a diluted market. All the four- and five-year players who would have been unrestricted free agents in years past are restricted and in effect can be removed from the open market with a high restricted free-agent tender.

That lowers the already small odds that Packers general manager Ted Thompson — who disdains the high cost of signing other teams’ players — will be active in the open market. He figures, as usual, to sit out the bidding for the most coveted players and sift through the rest for relative bargains.

“It will be interesting to see what kind of market will develop,” Brandt said. “In theory, the scarcity of talent in the (unrestricted free-agent) pool will drive up prices. However, the talent pool in the (restricted free-agent) pool will be greater, and the unknown is how active teams will be in the RFA market.”

[Joemailman]

The economy will not recover for years and the union could not have picked a worse time for this, but when has that ever stopped them?
Unfortunately, the Owners picked this moment, not the Players.

Details, details. :lol: :lol: Indeed, if there is no football in 2011, it will be due to a lockout, not a strike. My biggest concern right now is that perhaps neither Goodell nor the NFLPA President are as competent as their predecessors. Upshaw and Tagliabue knew how to get things done.