What is a fair profit for an NFL owner?

[Patler]

The players and those who side with them have argued that owners make too much money from the players work.

What is a fair profit for an average NFL owner?
Keep in mind the following:

The highest paid NFL players on a per-year-average are just under $20 M. It is expected that with the next round of QB contracts this will easily reach $20-$25 million.

It is expected that within three years the average NFL salary will be almost $3 M/year.

Owners building new stadiums are investing hundreds of millions on top of the hundreds of millions already invested in their teams.

[Lurker64]

Discussing the "fairness" of profit is inherently misguided. Profit is never fair, or always fair. It should be the goal of every business to make as much profit as possible while staying within the boundaries of propriety, legality, and basic ethics.

It's impossible for there to be such a thing as "too much profit."

[Patler]

Discussing the "fairness" of profit is inherently misguided. Profit is never fair, or always fair. It should be the goal of every business to make as much profit as possible while staying within the boundaries of propriety, legality, and basic ethics.

It's impossible for there to be such a thing as "too much profit."

Be that as it may, that's what this negotiation is founded on. What is "fair" for the owners and what is "fair" for the players. Of course every business should try to maximize profits.

[Guiness]

You really seem to struggle with this whole issue Patler, and seem a little defensive when others strongly take the side of the players?

You have tried to draw parallels to other types of businesses/companies being in similar (strike/lockout) situations, but I think what you have to remember is that the NFL operates outside the regular rules, and even laws of corporate america. Hence the anti-trust exemption. For example, what business other than pro sports could force all of their employees to stand in a line while the only employers available to them got to pick where they went?

I agree with Lurker's reply, that there is no 'fair' profit. It's not quantifiable, and while you are correct that all business should operate in a manner to maximize profits, that's just not necessarily how major leagues sports operate. There are no shortage of owners out there that care little or nothing of profits, as long as they get to sit in the owner's box, watch the games, and say 'mine.'

I recently read a book about hockey, and it's owners. It talked about how normally shrewd businessmen make ridiculous decisions when it comes to running their team.

[swede]

I wonder how a player such as Adrian Peterson is able to conjure up a very intense perception of being exploited by the man. I suppose it comes from the very real risk of injury, the long-term health implications, and the knowledge that a sweet-tempered mega-star such as LaDanian Tomlinson can finish his career being in about as much demand as Noah Herron.

But if twenty million dollars won't make that go away a bazillion won't either.

It's not profits...it's about perceptions.

[HowardRoark]

The process will determine what is "fair." The Invisible Hand will sort this thing out.

[Smidgeon]

I wonder how a player such as Adrian Peterson is able to conjure up a very intense perception of being exploited by the man. I suppose it comes from the very real risk of injury, the long-term health implications, and the knowledge that a sweet-tempered mega-star such as LaDanian Tomlinson can finish his career being in about as much demand as Noah Herron.

But if twenty million dollars won't make that go away a bazillion won't either.

It's not profits...it's about perceptions.

I would love to make $10 million for just one year. I wouldn't even care if my owners were making $400 billion per month. Say 75% of that $10 million went to taxes. I could still invest the $2.5 million and live off the interest for the rest of my life with no other paychecks. <sigh> To dream...

[Bossman641]

I think the players trying to decide what is fair for the owners is a load of crap. What is fair for the players? Should the nfl review the personal assets and tax returns of the players and determine whether it is fair for Player X to have a 12 million dollar house and ten sports cars.

[RashanGary]

What's fair for the players who go out there and risk their bodies and in extreme cases, lives? It's not an easy negotiation. There are billions of dollars every year. However it gets split, everyone is rich. Just how to split it is the tough part.

[Patler]

You really seem to struggle with this whole issue Patler, and seem a little defensive when others strongly take the side of the players?

Struggle with this? No way, not at all. I have a very clear understanding of the concepts and what I would do as an owner or as a player. How am I being defensive??? Just trying to discuss the exact issue that is the stumbling block in the negotiations, how much the owners make relative to the players.

When did I get defensive? I have refrained from comment about the strike/lockout for several days, for the most part. Posted some links to a few articles before that, and summarized some impressions I had gotten from reading a lot about it. I do think the players have wanted to decertify from the get-go, but so what? That has nothing to do with being pro-player or pro-owner. After all, the players are pro-player and they decertified.

I am just trying to do what one does in a negotiation like this. The players have suggested that the owners make too much. The owners have said they need more money. In the end, if the players get to see the owner's books, and I suspect they will, it will come down to discussions about how much Jerry Jones and everyone else did or didn't make from owning their teams. I'm just trying to open a discussion about what people think an owner should make relative to the players. From that, we can build a discussion. It's exactly the discussion that the players want.


You have tried to draw parallels to other types of businesses/companies being in similar (strike/lockout) situations, but I think what you have to remember is that the NFL operates outside the regular rules, and even laws of corporate america. Hence the anti-trust exemption. For example, what business other than pro sports could force all of their employees to stand in a line while the only employers available to them got to pick where they went?

I did??? When? Refresh my recollection please. I don't recall drawing any such parallels. If I did, it sure wasn't a major issue in my mind, because I don't recall doing it. Perhaps you are confusing me with someone else, or I have completely forgotten comments I may have made for the purposes of promoting a discussion.


I agree with Lurker's reply, that there is no 'fair' profit. It's not quantifiable, and while you are correct that all business should operate in a manner to maximize profits, that's just not necessarily how major leagues sports operate. There are no shortage of owners out there that care little or nothing of profits, as long as they get to sit in the owner's box, watch the games, and say 'mine.'

I recently read a book about hockey, and it's owners. It talked about how normally shrewd businessmen make ridiculous decisions when it comes to running their team.

Listen, I wasn't the one who raised this issue. The players are the ones who did. The owners said said they need more money. The players have suggested they make too much already. I am just trying to start a discussion about the issues raised by the parties.

If I were in the negotiating room (and I have been) I would be doing much the same thing. There is a point to all of this.

So what if some sports owners don't care if they make a profit? That has nothing to do with these negotiations. Should the players be getting a high enough % so that all owners are in that boat? If the players see the books and determine that the average owner makes $100M/year, should they ask for more, or should they say "That's fair."? If the average owner makes $5M, should the player capitulate?

I know very well this is not like a typical business, but so what?

[Patler]

What's fair for the players who go out there and risk their bodies and in extreme cases, lives? It's not an easy negotiation. There are billions of dollars every year. However it gets split, everyone is rich. Just how to split it is the tough part.

It is really no different than than thousands of other jobs with a much higher risk than an NFL player has. Miners, loggers, firemen, policemen, farmers have much greater risks of death, and many are physically as broken down in the end as are NFL players.

Generally, a worker is paid what is necessary to find qualified people to do the job. Even though it is really no different than other jobs, major pro-sports have gotten themselves in trouble by defining a sort of "partnership" where labor (players) are treated like a co-owner. Sometimes that works in the regular world too, and sometimes it breaks down.

[channtheman]

If an NFL team is worth 600 million (http://wiki.answers.com/Q/How_much_does_a_NFL_teams_cost - I know this isn't research, it was the first article I could find on a 5 second google search) and they make a yearly profit of just 5% that is about 30 million. I know absolutely nothing about what should be expected to be made in regards to percentages in businesses but I would think a profit of 5-10% of what it is worth yearly sounds about right. So a team like the Vikings worth 600 million should expect a yearly profit anywhere from 30 million to 60 million.

[packrat]

http://www.usatoday.com/sports/football/nfl/packers/2010-07-15-finances_N.htm Packer profits went from 34 million to 20.1 to 9.8 million. Someone with $600 million to invest would certainly target a 10% return and would be considered a lousy manager if they only got 5% so something in the $60-30 million range should be considered reasonable. If the owners were to increase their share by the $500 million that has been recently proposed, that would increase earnings per team by about $15 million a year and would get the Packers into the range that should be considered reasonable.

[Tarlam!]

I used to tell my sales people what they are worth; their gross salary plus 82% costs (health care, unemployment insurance, pension, car & expenses). The average earned about €50K gross plus variable pay (bonus), so the company placed his/her worth at about 90 K. I would then tell them the interest rate at a bank for for 1 year term was around 3%, so if the owner of the company put his 90 K in the bank for a year he'd gross 2,7K per salesperson. Sounds easy, right?

The thing is, though, for every sales person, there were 3 non-sales people that also had to be paid, though the costs were reduced for non managerial staff to around 35%. So now, we realize that the salesperson needs to earn for 4. That means, every sales person now has to earn a gross profit of around 10k just to keep competitive with the bank.

But, the longer one is willing to put one's cash into a fixed term account, the higher the interest. Then, you talk about shareholder value etc. I think you get the idea of where my speeches went. The same goes for the owners of 31 NFL teams.

[Lurker64]

If an NFL team is worth 600 million (http://wiki.answers.com/Q/How_much_does_a_NFL_teams_cost - I know this isn't research, it was the first article I could find on a 5 second google search) and they make a yearly profit of just 5% that is about 30 million. I know absolutely nothing about what should be expected to be made in regards to percentages in businesses but I would think a profit of 5-10% of what it is worth yearly sounds about right. So a team like the Vikings worth 600 million should expect a yearly profit anywhere from 30 million to 60 million.

Here's a better source for the value of NFL teams. Forbes does this list yearly: http://www.forbes.com/lists/2010/30/football-valuations-10_NFL-Team-Valuations_Rank.html

The top 16 NFL teams are worth a billion or more. The least valuable team is $725 million. So your 600 million number is a significant underestimate.

[packerbacker1234]

The deal breaker here is that, bottom line, the players themselves are employees. Since when do employees have the right to dictate how much their Employer makies? They don't. Their employer pays players very well for what is what, an average life expectancy in the nfl of 8 seasons?

I mean, you get retirement money, help with some of the medical costs - oh and you make MILLIONS when you do play, usually far more money than the rest of the world is going to make in their lifetimes. Not only that, smart people reinvest a lot of their money and own a couple successful restaurants or whatever so they have continual income after they retire.

So, why do the players even have a say? Because it's an allowed Monopoly? They can ask for more of the pie all they want, but the owners own the team because it makes them money. A lot of money. If they weren't making a lot of money, why would they bother to keep the team?

Yes, Owners may make like 100+ million dollars in profit a year. What's the problem? The players aren't exactly poor. Even the bottom feeders on the roster nad practice squade are making what some DOCTORS make, and last I checked Doctors are considered a upper echelon income source in most communities.

What this is like is Microsoft staff revolting against Bill Gates because he makes a shit ton more money thatn they do. Guess what, he should. It's HIS business, not THERES. If players wnat to complain about money and getting paid more, they can go sit out. There are thousands of people who will step in and play in the nfl for 100k a year with full medical coverage. Players make millions, and then if they become stars even more from investors and companies like gatorade and nike.

The salary cap goes up every year, even if the income may not be rising. So, more money continually was going to payroll. What's the real issue in the end? Owners are going to make a lot of money. That is why they are the owners. Players ALREADY make a lo tof money. "they profit too much off our work". BS. You're paid very well so they can in turn make money from THEIR business. Your an employee - deal with it.

No idea how AP can bitch at all. He should be making a lot of money. I don't get how any of the star players complain.

[Smidgeon]

I used to tell my sales people what they are worth; their gross salary plus 82% costs (health care, unemployment insurance, pension, car & expenses). The average earned about €50K gross plus variable pay (bonus), so the company placed his/her worth at about 90 K. I would then tell them the interest rate at a bank for for 1 year term was around 3%, so if the owner of the company put his 90 K in the bank for a year he'd gross 2,7K per salesperson. Sounds easy, right?

The thing is, though, for every sales person, there were 3 non-sales people that also had to be paid, though the costs were reduced for non managerial staff to around 35%. So now, we realize that the salesperson needs to earn for 4. That means, every sales person now has to earn a gross profit of around 10k just to keep competitive with the bank.

But, the longer one is willing to put one's cash into a fixed term account, the higher the interest. Then, you talk about shareholder value etc. I think you get the idea of where my speeches went. The same goes for the owners of 31 NFL teams.

...so glad I don't work in sales.

[Scott Campbell]

...so glad I don't work in sales.


So glad I do.

[bobblehead]

You really seem to struggle with this whole issue Patler, and seem a little defensive when others strongly take the side of the players?

You have tried to draw parallels to other types of businesses/companies being in similar (strike/lockout) situations, but I think what you have to remember is that the NFL operates outside the regular rules, and even laws of corporate america. Hence the anti-trust exemption. For example, what business other than pro sports could force all of their employees to stand in a line while the only employers available to them got to pick where they went?

I agree with Lurker's reply, that there is no 'fair' profit. It's not quantifiable, and while you are correct that all business should operate in a manner to maximize profits, that's just not necessarily how major leagues sports operate. There are no shortage of owners out there that care little or nothing of profits, as long as they get to sit in the owner's box, watch the games, and say 'mine.'

I recently read a book about hockey, and it's owners. It talked about how normally shrewd businessmen make ridiculous decisions when it comes to running their team.

football doesn't have an anti trust exemption if I recall correctly....baseball does. Am I wrong on this. If so, how did the WFL and USFL ever form.

[bobblehead]

I would love to make $10 million for just one year. I wouldn't even care if my owners were making $400 billion per month. Say 75% of that $10 million went to taxes. I could still invest the $2.5 million and live off the interest for the rest of my life with no other paychecks. <sigh> To dream...

You say this...but how many players retire in their prime satisfied with the money they have earned. I back the players in their attempt to get every penny they can within the rules. I don't back them involving federal courts to help them. They can sit. They can form their own league. They can go sell real estate. What they can't do in my opinion is force an employer to pay more than the employer wishes to pay.

[bobblehead]

If an NFL team is worth 600 million (http://wiki.answers.com/Q/How_much_does_a_NFL_teams_cost - I know this isn't research, it was the first article I could find on a 5 second google search) and they make a yearly profit of just 5% that is about 30 million. I know absolutely nothing about what should be expected to be made in regards to percentages in businesses but I would think a profit of 5-10% of what it is worth yearly sounds about right. So a team like the Vikings worth 600 million should expect a yearly profit anywhere from 30 million to 60 million.

Why should I start a business, risk my capital, burn out my mind for 5% when I can invest in condos and make 7%? You have a skewed idea of what a business should make. In fairness to you, you admitted as much, right before imposing judgement on what sounds about right. Try 20% or more. Definately more if you incurred debt to build said business.

[bobblehead]

http://www.usatoday.com/sports/football/nfl/packers/2010-07-15-finances_N.htm Packer profits went from 34 million to 20.1 to 9.8 million. Someone with $600 million to invest would certainly target a 10% return and would be considered a lousy manager if they only got 5% so something in the $60-30 million range should be considered reasonable. If the owners were to increase their share by the $500 million that has been recently proposed, that would increase earnings per team by about $15 million a year and would get the Packers into the range that should be considered reasonable.

As I said above. 10% is not enough return to get me to put in the work. Reassess and try again.

[Smidgeon]

Why should I start a business, risk my capital, burn out my mind for 5% when I can invest in condos and make 7%? You have a skewed idea of what a business should make. In fairness to you, you admitted as much, right before imposing judgement on what sounds about right. Try 20% or more. Definately more if you incurred debt to build said business.

I think this is incredibly key. Too few people are pointing this out. The owners who have invested heavily in a team, I think, should be making way more than the top employees.

[pbmax]

Hold the fort a second. Owners do not profit (in the loosest sense of the word - perhaps should say benefit) from yearly profits alone. So to judge yearly profit figures against a 5 or 10% yearly return is like saying you expect your equity holdings to pay dividends equivalent to 5 or 10% of your investment. Not likely to happen and you are forgetting a major point of investing. The asset that you own.

You need to know the value of the asset over time to determine what kind of ROI you are getting. That plus profit figures (and the rest of the balance sheet) might get you to a fair number. You could also compare to other sports holdings and similarly sized businesses.

A fair profit is difficult to peg from the outside, it is much harder if you do not know how much the entire business value has appreciated in the time it has been held.

[rbaloha1]

Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.

[Patler]

Hold the fort a second. Owners do not profit (in the loosest sense of the word - perhaps should say benefit) from yearly profits alone. So to judge yearly profit figures against a 5 or 10% yearly return is like saying you expect your equity holdings to pay dividends equivalent to 5 or 10% of your investment. Not likely to happen and you are forgetting a major point of investing. The asset that you own.

You need to know the value of the asset over time to determine what kind of ROI you are getting. That plus profit figures (and the rest of the balance sheet) might get you to a fair number. You could also compare to other sports holdings and similarly sized businesses.

A fair profit is difficult to peg from the outside, it is much harder if you do not know how much the entire business value has appreciated in the time it has been held.

Which is exactly why I threw in the first option in the poll. However, absent other sources, a person can't live on increased equity in a business. You have to take out some cash by way of a salary or something.

Perhaps a better way to have phrased the poll would have been this - "What is a fair salary for an owner to pay himself, assuming the rest of profits are somehow tied up in or reinvested in the business?"

One of the hangups in the "open your books discussion" is that the players will see how much money the owner pays to himself and his family. As one writer wrote, the amount is not significant in the overall scheme, but there will be some items that can be a PR embarrassment. Lumping these together as an owner's "take" avoids the touchy subjects of $250,000 salaries given to spoiled kids to do nothing, etc. Still, overall, what is an acceptable number for the owner's family if he is payig his average employee $3M/ year, and a bunch of his top employees are getting $10-25M?

[Patler]

Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.

You can always talk about a fair profit. The fair profit we are talking about is the actual, accurate number, whether it is the owners number, the players number or more likely something in between.

[Patler]

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?

[rbaloha1]

You can always talk about a fair profit. The fair profit we are talking about is the actual, accurate number, whether it is the owners number, the players number or more likely something in between.

Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.

[Lurker64]

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.

[Lurker64]

Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.

Why is disclosure of anything required for determining what a "fair" profit is? The question is merely "supposing that the books were exposed, what profits by the owners would lend you to conclude 'that's enough'." Saying "I can't answer" a question that presupposes "if the books were opened..." by saying "I can't answer unless they opened the books" is absolutely nonsensical.

[bobblehead]

Its impossible to determine a fair profit when the owners fail to properly document revenues and expenses.

Actually its easy to figure. As much as the market will bear. What you think is fair can be voted on by you spending your money on the product. What the players think is fair will be determined by them choosing a different career.

[Patler]

Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.

The reality of the situation is that the players have demanded, and likely will get significant access to their owners' books. They will be given a number or will calulate a number on their own that represents the owners annual cash take from the business. Some players have implied that the owners currently get too much, and more of the $9 billion should go to the players. That presupposes that there is an acceptable amount for an owner to "take". I am trying to get a feel for that number.

If Peyton Manning is paid $25 million, if the players determine that Irsay paid himself and his family $40 million, will that be fair? Is it fair to him if all gets on a year to year basis is $5 million?

[HowardRoark]

Can fans ask what is a "fair" amount for a player to make......and then demand lower ticket prices and less commercials about erection difficulties?

[Bretsky]

I think the players trying to decide what is fair for the owners is a load of crap. What is fair for the players? Should the nfl review the personal assets and tax returns of the players and determine whether it is fair for Player X to have a 12 million dollar house and ten sports cars.

TEN CLAP POST

[Bretsky]

What's fair for the players who go out there and risk their bodies and in extreme cases, lives? It's not an easy negotiation. There are billions of dollars every year. However it gets split, everyone is rich. Just how to split it is the tough part.


It's their choice; all of life is a choice for employees. If they don't want to make that risk for the absurd amount of money they get, then they can choose to get different jobs.

[Patler]

So far, the overwhelming consensus here seems to be that owners should be taking home a lot, $40 million or more.
Annually, that's approaching $1.5 billion for the 32 teams.
Annually, player salaries are in the neighborhood of $4.5 billion.
If the pie is $9 billion, that leaves $3 billion for everything else. Sounds like a lot, but it is only about $100 million per team, which has to pay for coaches salaries, GM, scouting staff, medical and training staff, office and field personnel, and all employees benefits like insurance, equipment costs, travel expenses, food, lodging, etc., etc.

Yes, there are other sources of income not part of the $9 billion, but there are also other expenses relating to stadium building, renovating and upkeep that I didn't include above.

My point is this, it doesn't seem that the amount of money that reasonably could go one direction or another is really all that much. A few million extra per owner on the one hand or a few thousand per player on the other shouldn't have stopped this from settling.

I think this is more about ego and "winning" than it is about the money.

The owners and players should have considered the saying,"Be careful what you wish for, because you might just get it."

[MJZiggy]

Actually Patler, I think they should divvy up 6 million and lower prices for the fans...

[Guiness]

Struggle with this? No way, not at all. I have a very clear understanding of the concepts and what I would do as an owner or as a player. How am I being defensive??? Just trying to discuss the exact issue that is the stumbling block in the negotiations, how much the owners make relative to the players.


When did I get defensive? I have refrained from comment about the strike/lockout for several days, for the most part. Posted some links to a few articles before that, and summarized some impressions I had gotten from reading a lot about it. I do think the players have wanted to decertify from the get-go, but so what? That has nothing to do with being pro-player or pro-owner. After all, the players are pro-player and they decertified.

I think these last couple of lines are defensive sounding, but maybe that's just me. If you say you aren't, I believe you. That's what makes these types of forums so prone to flame wars. I can't see your facial expressions, if you arched your eyebrows when you said that, hear your tone of voice or see any of your other body english. So it's easy for me to read a (wrong) impression.


I did??? When? Refresh my recollection please. I don't recall drawing any such parallels. If I did, it sure wasn't a major issue in my mind, because I don't recall doing it. Perhaps you are confusing me with someone else, or I have completely forgotten comments I may have made for the purposes of promoting a discussion.
[snip]
If I were in the negotiating room (and I have been) I would be doing much the same thing. There is a point to all of this.


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.

[Bossman641]

Again -- impossible to determine an actual number w/o full disclosure. Its moot since full disclosure shall not occur -- nor should it. Players are entertainers with a unique set of skills. The market determine the wage. However the market could be corrupted due to a blatant violation of anti trust laws.

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?

[rbaloha1]

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.

[Patler]

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.

[Lurker64]

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.

[rbaloha1]

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.

[Patler]

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.

[mraynrand]

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.

[Bossman641]

Yes you do.

Stubborn aren't you. Are you representing the players by any chance?

[Patler]

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.

[Bossman641]

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.

[Lurker64]

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.

[pbmax]

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.

[pbmax]

....

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.

[Tony Oday]

Cap pay at $1 million a year. If the players dont like it they can ALWAYS start their own league.

[pbmax]

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.

[pbmax]

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.

[pbmax]

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.

[Tony Oday]

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.

[pbmax]

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.

[Tony Oday]

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.

[pbmax]

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?

[Zool]

I think the players trying to decide what is fair for the owners is a load of crap. What is fair for the players? Should the nfl review the personal assets and tax returns of the players and determine whether it is fair for Player X to have a 12 million dollar house and ten sports cars.

Its not like the players have another option other than playing in the NFL at the current rate of pay, so it's also a load of crap to say they shouldn't try to get as much money as possible. Next time you're up for a raise tell your boss you're not interested. You're paid fairly enough.

Both sides are greedy pricks, but everyone in here to the person would try to get as much as they can while they can if put in either side of this situation.

[Deputy Nutz]

I am going to chime in, in my opinion a fair profit for the owners is what ever they can get. This a capitalist economy the last time I checked, and if they can make a billion dollars a year so be it. Unfortunately for them they are in a way business partners with the players. If the players don't play then in theory they don't make jack shit. The owners will get paid their TV contracts regardless of a Strike or a Lock out, but that is it. Their profits won't be maximized without the players.

[Tony Oday]

Its not like the players have another option other than playing in the NFL at the current rate of pay, so it's also a load of crap to say they shouldn't try to get as much money as possible. Next time you're up for a raise tell your boss you're not interested. You're paid fairly enough.

Both sides are greedy pricks, but everyone in here to the person would try to get as much as they can while they can if put in either side of this situation.


They can get paid to play football at a lot of other places. the NFL is just the most lucrative. You can computer program at a bunch of places as well but I bet you get paid a hell of a lot more at Google than some start up.

I dont know why they locked out the players seems dumb to me. I would have locked out the UNION players but that union is gone so no reason to lock them out.

[Zool]

They can get paid to play football at a lot of other places. the NFL is just the most lucrative. You can computer program at a bunch of places as well but I bet you get paid a hell of a lot more at Google than some start up.

I dont know why they locked out the players seems dumb to me. I would have locked out the UNION players but that union is gone so no reason to lock them out.

I agree with you that they could play for the CFL or the arena league, but honestly the difference in pay grade is astronomical. I can't think of another industry outside of professional sports where the pay difference is so large. I'm saying neither side is more wrong in my opinion. They are both trying to get as much as they can. Isn't that capitalism at its core?

[Smeefers]

I've read all the posts, and I can honestly say that i agree with everyone here.

[Patler]

PB;

I agree with all your comments about company value, appreciation, etc. But in many ways that is irrelevant to a situation that will soon arise. At some point in the near future the players will be getting their noses into the teams finances, and will see what the owners have taken out for their own use on a yearly basis. How much the owners have paid themselves. The players should recognize that it is fair for the owners to take some money from ongoing operations. If the owners average $2 million/year, I doubt players will find fault in that. If they find the owners "take" is $100 M/year, I suspect they will scream long and loud that more of that should be given to the players.

It's a very practical issue that will surface soon. It doesn't have to be made more complicated than it is (or will be).

[rbaloha1]

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.

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.

[Lurker64]

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.

[sharpe1027]

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?

[Guiness]

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 where does the rest of the money go? If the total salary comes down to half of their current level, do you think the owners will drop prices?

I would guess you're purposely overstating the salaries as well in an attempt to make a point. They don't make $10 million - a select few do.

A ballpark average salary is pretty easy to figure out if you look at 2009. 59 players count against the cap of $130 million cap gives you $2.2 million/player. But that's too high, subtract the big hitters for 2009:
(source http://www.jsonline.com/sports/packers/62145597.html)


Aaron Rodgers, QB $9.653M
Greg Jennings, WR $8.149M
Chad Clifton, T $8.040M
Charles Woodson, CB $7.300M
Donald Driver, WR $6.400M
Aaron Kampman, OLB $6.005M
A.J. Hawk, ILB $5.902M
Al Harris, CB $4.775M
Nick Barnett, ILB $4.684M
Ryan Grant, RB $4.400M


So, top ten earners make $65.44M, leaving $64.6M for the remaining 49 players - or $1.3million per. So given that the average number of wins/year is 8, your plan would actually be a raise for a lot of players.

Still as astronomical sum of money for most of the rest of us, but certainly not $10million per season.

[Guiness]

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.


Damn the quoting system on this board.

I tried to answer both of your questions, but the reply about you being defensive got nested in the quote box. I'm usually pretty good about previewing my posts, but it was late and I was tired:oops:

Your comment about how many people knew exactly how much their private owners made was what I meant about you drawing parallels to 'regular' businesses. The answer is no, I haven't seen audited books of my employers, but that has nothing to do with what is going on here.

I actually have seen the 'full' books of a company (albeit not audited, AFAIK) when the company I was working for hit some dire straights, and asked everyone to take a pay cut, as well as soliciting loans from us.

[Smeefers]

I've read all the posts, and I can honestly say that i agree with everyone here.

Gee Smeefers, I really appreciate your attempt to inject a bit of humor into this heated debate. You sir, are a comedic Genius. Lol sir, lol.

[mngolf19]

I wouldn't have locked out if I was an owner. But now that this has happened, open up the draft to everyone (no age min) and add in more rounds. Tell each draftee that he has a max salary he can make per season, each contract is on a 1 year basis and that the owners as a group will not make any attempt to go after another teams FA's until given permission to by the releasing team. Within 5 years you are back to the a reasonable level of play again. And, to get the public on my side I immediately cut ticket prices drastically and renegotiate tv contracts.

I'm sure you'll tell me how this won't work but... works for me.

[sharpe1027]

Unless the salary cap is removed, arguments of "whatever money the players can get is fair" go out the window. If it was a free market, players could command whatever money owners thought they were worth and bad owners would lose money. The owners use the salary cap to protect themselves from their own stupidity. I see no reason for them to complain about the fairness when they are the source of the problem.

Therefore my answer to the question is: whatever profit the owners are able to make is fair and if they lose money they likely should be blaming themselves first.

[rbaloha1]

Unless the salary cap is removed, arguments of "whatever money the players can get is fair" go out the window. If it was a free market, players could command whatever money owners thought they were worth and bad owners would lose money. The owners use the salary cap to protect themselves from their own stupidity. I see no reason for them to complain about the fairness when they are the source of the problem.

Well said. Its the same in the NBA with the age limit. Its the owners that did not want to risk big money on high schoolers.

[Tony Oday]

And where does the rest of the money go? If the total salary comes down to half of their current level, do you think the owners will drop prices?

I would guess you're purposely overstating the salaries as well in an attempt to make a point. They don't make $10 million - a select few do.

A ballpark average salary is pretty easy to figure out if you look at 2009. 59 players count against the cap of $130 million cap gives you $2.2 million/player. But that's too high, subtract the big hitters for 2009:
(source http://www.jsonline.com/sports/packers/62145597.html)


Aaron Rodgers, QB $9.653M
Greg Jennings, WR $8.149M
Chad Clifton, T $8.040M
Charles Woodson, CB $7.300M
Donald Driver, WR $6.400M
Aaron Kampman, OLB $6.005M
A.J. Hawk, ILB $5.902M
Al Harris, CB $4.775M
Nick Barnett, ILB $4.684M
Ryan Grant, RB $4.400M


So, top ten earners make $65.44M, leaving $64.6M for the remaining 49 players - or $1.3million per. So given that the average number of wins/year is 8, your plan would actually be a raise for a lot of players.

Still as astronomical sum of money for most of the rest of us, but certainly not $10million per season.

Correct exaggerated for effect.

I know it would be a big increase for most of the NFL. This is Obamanomics at its best! Redistribute the income from all the teams and the "extra" goes partly back into the pockets of owners, partly to the cities that were dumb enough to fund their stadiums and part to retired players. The extra to the owners to be used to loan money to teams to build new stadiums so they stop fleecing us :)

[Bossman641]

Well said. Its the same in the NBA with the age limit. Its the owners that did not want to risk big money on high schoolers.

god help us if the nfl follows the nba's lead

[Tony Oday]

god help us if the nfl follows the nba's lead

There are NO High Schoolers that can play in the NFL.

[Guiness]

PB;

I agree with all your comments about company value, appreciation, etc. But in many ways that is irrelevant to a situation that will soon arise. At some point in the near future the players will be getting their noses into the teams finances, and will see what the owners have taken out for their own use on a yearly basis. How much the owners have paid themselves. The players should recognize that it is fair for the owners to take some money from ongoing operations. If the owners average $2 million/year, I doubt players will find fault in that. If they find the owners "take" is $100 M/year, I suspect they will scream long and loud that more of that should be given to the players.

It's a very practical issue that will surface soon. It doesn't have to be made more complicated than it is (or will be).

See, that's where I disagree with you, and think that there is no 'magic' number that is acceptable for profit.

I don't think the trouble with opening the books will come from learning one of the owners makes $100million/year. I think it will come from questionable accounting practices, like the ones pbmax and myself brought up earlier...i.e. an owner taking a $100million dollar salary, and putting it in the expense column, instead of the profit column.

I think at much as issue as the division of the revenue/profits is how that number is arrived at.

You could be correct in your other post, of course, that this is all a red hearing, and the players actually want something totally different, like getting rid of the tags, or wholesale changes to FA. I, personally don't think so. I think the root issue is the one stated up front, that the owners are saying the profit margin is too low, and the players don't believe them. After that, it's all egos and grandstanding.

[rbaloha1]

See, that's where I disagree with you, and think that there is no 'magic' number that is acceptable for profit.

I don't think the trouble with opening the books will come from learning one of the owners makes $100million/year. I think it will come from questionable accounting practices, like the ones pbmax and myself brought up earlier...i.e. an owner taking a $100million dollar salary, and putting it in the expense column, instead of the profit column.

I think at much as issue as the division of the revenue/profits is how that number is arrived at.

You could be correct in your other post, of course, that this is all a red hearing, and the players actually want something totally different, like getting rid of the tags, or wholesale changes to FA. I, personally don't think so. I think the root issue is the one stated up front, that the owners are saying the profit margin is too low, and the players don't believe them. After that, it's all egos and grandstanding.

Yea -- lets see the books with General Accounting Principals and not books that hide revenues from Uncle Sam.

[Tony Oday]

Yea -- lets see the books with General Accounting Principals and not books that hide revenues from Uncle Sam.

Why? No shareholders they can run the damn thing the way they want. I have made banks millions of dollars in my career so now I own my own brokerage so I can capture more of the money that was making others rich. These are employees and that is it.

[rbaloha1]

Why? No shareholders they can run the damn thing the way they want. I have made banks millions of dollars in my career so now I own my own brokerage so I can capture more of the money that was making others rich. These are employees and that is it.

If you are hiding revenue you are breaking federal law.

[packerbacker1234]

If you are hiding revenue you are breaking federal law.

Yes, if you are hiding revenue from the Government you are breaking federal law. There is no law stating that employees are entitled to know the finances of the company they work for. The company may choose to share those finances, or in the case of the Packers be required too because they are owned by the fans, but the bottom line is, as an employee, I have no right to go to the top of the chain in my business and ask for their revenue and proft margins, and where all the money goes. That is for the government to know, not the employee.

Do I know they can afford to pay me more? Sure. And you know what happens if I demand more money? I'm fired with 100's of other people waiting to take my job. That's the same way the NFL is. IF players want to "hold out" or whatever, there are THOUSANDS of people who didn't make in the NFL that would gladly take their place for a FRACTION of the cost of a normal NFL player. Point here is that while the Owners are significant;y richer than any player, that doesn't mean the players really have it so bad. I understand footing more support for retired players, but hte players of today make significantly more money than the ones of the old days. Thi smeans that if they end up broke, like Russel is right now, why should the NFL be supporting them after they stop playing? In today's NFL a player makes plenty of money in 4 to 8 seasons to support himself and his family for the rest of his life. If the rest of us can survive on an average of 40k a year, no reason an NFL player that banks maybe 60 million in a career can't better manage it to either turn it into more money (reinvesting, starting a business, etc). You hand me 60 million dollars and I am set for life. I don't need 12 sports cards, 7 SuVS, and 3 houses. It's just a waste of money. Sure, I'll have a damn nice car, maybe 2 or 3 per family needs, and yes one really nice house. But I wont be blowing the wad out the gate. Conserve and invest. Make some returns.

[rbaloha1]

Yes, if you are hiding revenue from the Government you are breaking federal law. There is no law stating that employees are entitled to know the finances of the company they work for. The company may choose to share those finances, or in the case of the Packers be required too because they are owned by the fans, but the bottom line is, as an employee, I have no right to go to the top of the chain in my business and ask for their revenue and proft margins, and where all the money goes. That is for the government to know, not the employee.

Do I know they can afford to pay me more? Sure. And you know what happens if I demand more money? I'm fired with 100's of other people waiting to take my job. That's the same way the NFL is. IF players want to "hold out" or whatever, there are THOUSANDS of people who didn't make in the NFL that would gladly take their place for a FRACTION of the cost of a normal NFL player. Point here is that while the Owners are significant;y richer than any player, that doesn't mean the players really have it so bad. I understand footing more support for retired players, but hte players of today make significantly more money than the ones of the old days. Thi smeans that if they end up broke, like Russel is right now, why should the NFL be supporting them after they stop playing? In today's NFL a player makes plenty of money in 4 to 8 seasons to support himself and his family for the rest of his life. If the rest of us can survive on an average of 40k a year, no reason an NFL player that banks maybe 60 million in a career can't better manage it to either turn it into more money (reinvesting, starting a business, etc). You hand me 60 million dollars and I am set for life. I don't need 12 sports cards, 7 SuVS, and 3 houses. It's just a waste of money. Sure, I'll have a damn nice car, maybe 2 or 3 per family needs, and yes one really nice house. But I wont be blowing the wad out the gate. Conserve and invest. Make some returns.

Senator Rockefeller disagrees with you:

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/24/AR2011022406519.html

[rbaloha1]

More to ponder...

http://www.time.com/time/nation/article/0,8599,2043784,00.html

[Lurker64]

Keep in mind that Rockefeller suggested that the league opened up their books in the sense that they gave them to a mutually agreed upon third party who will redact any sensitive information. The Owners actually offered the players this for the last five years, and the NFLPA turned down that offer. They didn't say "we'd like more but we'll take that and look at it" they just turned it down.

But again this has nothing to do with the actual topic of the thread, which is "what is a reasonable profit for an NFL team to make."

[rbaloha1]

Keep in mind that Rockefeller suggested that the league opened up their books in the sense that they gave them to a mutually agreed upon third party who will redact any sensitive information. The Owners actually offered the players this for the last five years, and the NFLPA turned down that offer. They didn't say "we'd like more but we'll take that and look at it" they just turned it down.

But again this has nothing to do with the actual topic of the thread, which is "what is a reasonable profit for an NFL team to make."

Okay what should a new thread be titled?

[Lurker64]

Okay what should a new thread be titled?

A new thread about what?

[mission]

So glad I do.

+1

$$$

[pbmax]

PB;

I agree with all your comments about company value, appreciation, etc. But in many ways that is irrelevant to a situation that will soon arise. At some point in the near future the players will be getting their noses into the teams finances, and will see what the owners have taken out for their own use on a yearly basis. How much the owners have paid themselves. The players should recognize that it is fair for the owners to take some money from ongoing operations. If the owners average $2 million/year, I doubt players will find fault in that. If they find the owners "take" is $100 M/year, I suspect they will scream long and loud that more of that should be given to the players.

It's a very practical issue that will surface soon. It doesn't have to be made more complicated than it is (or will be).

It is a very practical question, and I hope the players react with maturity should they actually see the numbers and especially if they can link them to a specific owner. In fact, if I was advising the negotiating players, I would advise them to ask for codes for franchises, so the numbers cannot be tied to an individual. I am sure one or two will say something regrettable, but most will stay silent on specifics. Mostly I think they will do this because they will spend large sums of money in a similar manner and no one looks good when the the wealthy bemoan the habits of other wealthy people.

But I suspect that the real debate, once it is settled on how much profits have declined, is how to restrain player costs without dropping their total percentage to below 2006 levels. Because the owners have talked about that as a bench mark but the players seem convinced the owners last ten year proposal drops them well below that level.

[pbmax]

Keep in mind that Rockefeller suggested that the league opened up their books in the sense that they gave them to a mutually agreed upon third party who will redact any sensitive information. The Owners actually offered the players this for the last five years, and the NFLPA turned down that offer. They didn't say "we'd like more but we'll take that and look at it" they just turned it down.

But again this has nothing to do with the actual topic of the thread, which is "what is a reasonable profit for an NFL team to make."

I don't think they are that close yet. Yes, the owners are at 5 years of data, but they were there a week ago or more. There is no single authoritative account that I have seen yet of exactly what the owners offered, but its is clear that it lays somewhere between profit numbers for each franchise (their previous offer) and the complete audited financial statements. PFT threw up its hands this week and said it was hard to nail down the disconnect beyond the time frame.

Their current offer seems to be audited figures used to calculate the profit numbers. Since its selective, any third party (I have trouble seeing the players objecting to blind numbers if they can agree on a firm and then hand those numbers to their own accountants) would have trouble doing anything other than verifying the math.

[Patler]

It is a very practical question, and I hope the players react with maturity should they actually see the numbers and especially if they can link them to a specific owner. In fact, if I was advising the negotiating players, I would advise them to ask for codes for franchises, so the numbers cannot be tied to an individual. I am sure one or two will say something regrettable, but most will stay silent on specifics. Mostly I think they will do this because they will spend large sums of money in a similar manner and no one looks good when the the wealthy bemoan the habits of other wealthy people.

But I suspect that the real debate, once it is settled on how much profits have declined, is how to restrain player costs without dropping their total percentage to below 2006 levels. Because the owners have talked about that as a bench mark but the players seem convinced the owners last ten year proposal drops them well below that level.

I hope the negotiators and advisers look beyond the bare percentage going to the players, and also look at the income sources that make up the calculation, what the owners do with their shares of the income etc. A slightly lower percentage of a much larger pot can make the players even more wealthy. The owners have claimed that they need a higher percentage to fund stadium improvements and other things that improve the overall business. I understand that some but not all of those things go to players, but some clearly do with bigger better stadiums.

The players may be faced with a decision about trust in the owners ability to continually increase the overall business, and would they rather have 59% of $9 billion or 57% of $10 billion. Taking a lower percentage might result in more money in their pockets, if the owner really can use the extra money to increase overall income as they have suggested they have and can.

[Lurker64]

The players may be faced with a decision about trust in the owners ability to continually increase the overall business, and would they rather have 59% of $9 billion or 57% of $10 billion. Taking a lower percentage might result in more money in their pockets, if the owner really can use the extra money to increase overall income as they have suggested they have and can.

Wouldn't a reasonable way to go about this be, instead of having a fixed offset in the CBA given to the owners, have variable offsets available to the owners allocated specifically for well-defined things that will actually increase the league's revenue (stadium renovations, etc.)? This will probably end up being intensely political if there's a finite amount of money available for this, similar to applying for grants, but it seems to be a way to make sure that the extra money for owners goes towards growing the league rather than wallpapering the bathroom with $50 bills.

[mraynrand]

... rather than wallpapering the bathroom with $50 bills.
Adam Jones approves this move. He would also like three bathrooms - Men, Women, and Minxx.

[Brandon494]

The players and those who side with them have argued that owners make too much money from the players work.

What is a fair profit for an average NFL owner?
Keep in mind the following:

The highest paid NFL players on a per-year-average are just under $20 M. It is expected that with the next round of QB contracts this will easily reach $20-$25 million.

It is expected that within three years the average NFL salary will be almost $3 M/year.

Owners building new stadiums are investing hundreds of millions on top of the hundreds of millions already invested in their teams.

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.

And while owners invest millions in the team these players shorter and risk their lives every time they step on the field for our entertainment and now the owners want to take 1 billion away from the players when the NFL is at its highest? Its a fucking joke.

[Tarlam!]

Its a fucking joke.

Yeah, you're right, it is a joke. People like you need to get some type of business school education, because you obviously have no idea of ROI. The greedy owners made this game and if you can't accept that, well, it's a joke. They make millionaires out of slum thugs in many cases. Poor slaves.

[Patler]

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.

And while owners invest millions in the team these players shorter and risk their lives every time they step on the field for our entertainment and now the owners want to take 1 billion away from the players when the NFL is at its highest? Its a fucking joke.

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.

[BobDobbs]

I think the lack of available taxpayer money is a big reason the owners want a larger cut off the top. Can you imagine trying to get a municipality to build you a new stadium now or in the next few years? It might not be impossible, but it's definitely not a job I'd want. So, if you can't get it from the tax payers get it from the players.

I think much of the talk of the players getting other jobs or the owners going for the throat is more emotional than pragmatic. You could not replace the players with any where near the same quality of men, despite the fact that others would jump at the chance to play for less. If I watch soccer I watch Champions League because by watching a team like Barcelona play I see soccer played at the highest level. I couldn't even name the teams in the MLS. I mean you could also argue that if an owner doesn't like the deal they can sell the team and put their money into other business ventures. But that is not going to happen.

Remember, this is a highly successful overall business and ultimately they both need one another to make as much money as they do. And both the parties involved in this struggle are getting very rich. So, they each have strong impetus to work this out before they stifle the passion for the league.

The issue of fairness is tough to answer, because it is subjective. I mean is it fair that there are children born HIV positive in war zones while other children get to grow up and inherit the Yankees? I would say no. I'm being glib though, I know the question was posed within the scope of the negotiations.

On the players side I understand them rankling at the fact that the owners are asking them to play two more games, and give up a billion dollars when fan interest and TV dollars are as high as they have ever been.

I understand the owners making the point that if you want to be business partners than you should chip in on some of the capital costs that it takes to grow the business.

As far as what the owners make, they're going to maximize their profits within legally conscripted boundaries. They can't, for instance, sell cocaine at the concession stands. That seems fair. However, the players have much more leverage than any other pool of employees that I can think of and that's why metaphors relating to any other business I can think of aren't applicable.

I don't think anything about this is about fairness. It is about leverage. As an example, a friend of mine worked at a bond trading company in Chicago as their network administrator. He quit to move to Milwaukee with his family. They immediately had major system failures. This is obviously a huge problem if you're trying to trade in bonds. They called him and said, 'what's it going to take for you to come back?'. He told them he'd do it as a contractor for $100/hr. They agreed, things got back to running smoothly. Within a month his boss sat him down and said,'listen, I want you here, but I can't pay you as a contractor. What are we going to do about that?'. He asked for his old salary, but instead of five days a week he'd take the train down two days and be available to fix things remotely for the equivalent of one day a week. Could he have asked for this before he quit as an ultimatum? No way. Did they agree? Yup. This is leverage not fairness that is in play.

As far as what the union really wants, which Patler raised earlier, I think secondarily they want to get all the owners financials so that they can see if there are some profits being hidden as costs. But, I think the primary reason is their hope that they can cause dissension within the ranks of the owners. If every owner gets to see how much the richest teams are making that isn't subject to revenue sharing they are liable to try to get a piece of it. The Ralph Wilson's of the league can make the argument that, hey we've been saying that shared revenue drives competitive parity, which drives viewership and attendance, which drives profits. And that's a reasonably strong argument because it correlates to the most profitable period of growth in league history.

At that point, the players weaken the ownership because of division and if more revenue goes into the shared pool that would presumably raise the amount that goes toward player salaries. Which is obviously a major focus of the union short and long term.

[ThunderDan]

Yeah, you're right, it is a joke. People like you need to get some type of business school education, because you obviously have no idea of ROI. The greedy owners made this game and if you can't accept that, well, it's a joke. They make millionaires out of slum thugs in many cases. Poor slaves.

And how can you make this statement? How can you use all of that wonderful business school education and determine ROI in the NFL? The owners have not once stated a number for their profits. That seems to be a critical number to calculate ROI. In fact, gross income numbers aren't used to calculate ROI so the one number we know for sure isn't useful to determine ROI. Just looking at the values of the franchises you can see how much owners will make on the sale of their teams without looking at yearly profit/loss.

I am a CPA and I can't tell you the ROI for the owners without looking at the books.

[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?

[bobblehead]

And how can you make this statement? How can you use all of that wonderful business school education and determine ROI in the NFL? The owners have not once stated a number for their profits. That seems to be a critical number to calculate ROI. In fact, gross income numbers aren't used to calculate ROI so the one number we know for sure isn't useful to determine ROI. Just looking at the values of the franchises you can see how much owners will make on the sale of their teams without looking at yearly profit/loss.

I am a CPA and I can't tell you the ROI for the owners without looking at the books.

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

[pbmax]

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

The owners have probably offered to let a 3rd party look at some numbers, not the actual numbers behind the summaries. No one seems to know which numbers they were, but its clear it wasn't the full picture.

[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?

[Guiness]

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

About 0%. I expect if the owner's opened up their books to the NFLPA itself, I would fully expect to see the Dallas Cowboy's general ledger being tweeted, one entry at a time, from the bathroom in the hallway outside the meeting room.

[retailguy]

And how can you make this statement? How can you use all of that wonderful business school education and determine ROI in the NFL? The owners have not once stated a number for their profits. That seems to be a critical number to calculate ROI. In fact, gross income numbers aren't used to calculate ROI so the one number we know for sure isn't useful to determine ROI. Just looking at the values of the franchises you can see how much owners will make on the sale of their teams without looking at yearly profit/loss.

I am a CPA and I can't tell you the ROI for the owners without looking at the books.

Me neither, and like you Dan, I've also done this for a living. But, you can look at one parallel related to ROI. I've done literally tens of thousands of tax returns, and virtually NONE had a great ROI when payroll was above 50%, much less 60%. I recognize that the NFL is not a "typical" business, but, realistically, their other expenses are also high. Everything they do is 1st class. Charter flights, the best weight rooms, the best medical care, the best facilities, the best of everything.

Something has to give somewhere, and ultimately, it's got to trickle down to the ROI. How can it not?

Keep in mind that the 59.6% salaries are really just player salaries. It doesn't include any other team salary. Even backing it back down to 50% of total revenue, which is what we are told it approximates, what about coaches, admin staff, finance, IT, grounds maintenance, training staff, building personnel, and the list goes on....

It would not surprise me if some of the lower market teams have a total loaded payroll approaching 65%. That'll put a strain on any ROI analysis and you don't really need financials to figure that part out.

[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.

[Tarlam!]

Thanks, RG.

[Guiness]

Me neither, and like you Dan, I've also done this for a living. But, you can look at one parallel related to ROI. I've done literally tens of thousands of tax returns, and virtually NONE had a great ROI when payroll was above 50%, much less 60%. I recognize that the NFL is not a "typical" business, but, realistically, their other expenses are also high. Everything they do is 1st class. Charter flights, the best weight rooms, the best medical care, the best facilities, the best of everything.

Something has to give somewhere, and ultimately, it's got to trickle down to the ROI. How can it not?

Keep in mind that the 59.6% salaries are really just player salaries. It doesn't include any other team salary. Even backing it back down to 50% of total revenue, which is what we are told it approximates, what about coaches, admin staff, finance, IT, grounds maintenance, training staff, building personnel, and the list goes on....

It would not surprise me if some of the lower market teams have a total loaded payroll approaching 65%. That'll put a strain on any ROI analysis and you don't really need financials to figure that part out.

a counterpoint to that would be that 59.6% is the cap. Last several years, a lot of teams were well under the cap. There's also the billion or so off the top to account for. Look at the 'A CBA Math Problem' thread.


From PFT via the NFLPA, the percent of player costs versus all revenue:

2002: 51.87%
2003: 50.23%
2004: 52.18%
2005: 50.52%
2006: 52.74%
2007: 51.84%
2008: 50.96%
2009: 50.06%

According to that, player salaries are a lot closer to 50% than 60% of Total Revenue.

[Smidgeon]

According to that, player salaries are a lot closer to 50% than 60% of Total Revenue.

Isn't the players cut 59.something percent after $1 billion taken off the top? That would lead to the flowing proportion that hovers around 50%.

[retailguy]

a counterpoint to that would be that 59.6% is the cap. Last several years, a lot of teams were well under the cap. There's also the billion or so off the top to account for. Look at the 'A CBA Math Problem' thread.



According to that, player salaries are a lot closer to 50% than 60% of Total Revenue.

Yes, that's true, I stated the 50% of total revenue figure in my post. I get the difference, but personally, I believe this debate is 90% political, and 10% financial.

Honestly, I think the NFLPA* only wants to see six or seven teams financials. I don't believe they care about the rest. Hell, the union has financial people. They understand the numbers, much better than we do, even without "looking" at the numbers. It really isn't about that.

The Packers numbers are published. I think it was reported that we rank somewhere around 9th in the league in total revenue. By any standard we're one of the healthiest teams in the league. On that basis, you know that 2/3rd's of the league has (on average) less robust financials than we do. You can see from the Packers numbers, good evidence that what the owners are maintaining is true. But, there will be exceptions. If the NFLPA* can find even one example, then, that'll be all the financial details that we will see, because the real battle is not about money.

Regarding the cap, I don't believe that some of the lower market teams can afford to spend all the money that the cap affords them. They are doing the best that they can, in the environment that they have. The NFL is really becoming the "have's" and the "have nots", in a matter of speaking. Mike Brown's world is much different than Jerry Jones' world. It's just true. The single biggest thing that most of the worlds business can control is payroll. The CBA limits that control to a certain extent. The NFL reality limits the rest. You have some flexibility in the cap, and you can cut back, some years. Not all. Eventually, you won't be competitive.

Finally, I wasn't talking about player salaries. I started there. I was talking about total salaries. That boosts the number for the team. Player salaries are the biggest component of that, but only one. Coaches salaries have skyrocketed in the past 10 years, as have GM's and scouts also to an extent. It used to be that a coach getting $2m was a big salary, now, it's $8m. At the end of the day, all I was maintaining is that there must be downward pressure on ROI, and that a reasonable person could come to that conclusion without seeing the financials. (I do believe that the very top tier of revenue teams are not experiencing this to the level of most of the teams, but they are probably the exception, and not the rule).

You can look to Miami as a great example of this. Ross is selling off little bits and pieces of the team. Why? I think he needs the cash, and it's the only way you can tap into the equity besides borrowing the money. I think there is a small bit of marketing going on in Miami as well, but I think those funds are being invested into the team to try and make it grow. It would be illogical to sell off part of your team if you didn't have a financial reason to do so. (in most cases)

[Guiness]

I agree with your numbers, to a point. I just thought your previous post used the wrong starting point, which makes the 65% number unlikely, IMO.

You could be right, you could be wrong. I've stated before that I think the owners are trying to force the players into a game of blind baseball.

If it isn't necessarily about the money (and I think Patler tends to share your view) I'm not sure what it's about.

You use Miami as an example - but all we can do is divinate the reason for selling of pieces of the team. If the NFL has a problem, why don't they offer to open up ONE team's books - a sacrificial lamb, Mike Brown would be a good choice, he's a notorious cheapskate. Ralph Wilson perhaps, he's so old he doesn't care. Open up the one set of books, and show us that someone is in trouble.

[retailguy]

I agree with your numbers, to a point. I just thought your previous post used the wrong starting point, which makes the 65% number unlikely, IMO.

If you look back at my original post, you'll see that I said "some of the lower market teams approaching 65%". Like any business, some of the teams aren't run as well as they could be run. I think you'd find some candidates in the lower quartile of teams organized by revenue. I was thinking Jacksonville and Buffalo, but I'm certain there are others.

If you divide 9 bln by 32, you get just south of $300 million for the "average team". If you assume that "non player salaries" are 10% of revenue (that may be high, but maybe not depending on the structure). You could also assume that teams operate with significant contractor personnel, which always boosts payroll costs, as the firms have markup for expenses and profit. Anyhow, if you apply this to the Packers, it's easy to get the 1st 10 million in non player salaries - McCarthy, Thompson, and Capers probably cover most of that 1st 10 mil. Salaries drop precipitously after you get through the top level staff and the coaching staff, but, it's in the realm of possibility that costs could be in that area, depending on bonuses, benefits, incentive packages, training programs, travel, etc...

But again, my main point wasn't a monetary analysis, rather it was to point out the downward pressure of ROI in this situation, and pointing out that it may not be so unreasonable, even without looking at the owners books.



You could be right, you could be wrong. I've stated before that I think the owners are trying to force the players into a game of blind baseball.

And the players are trying to force the owners into a reasonableness discussion. Not much difference.



If it isn't necessarily about the money (and I think Patler tends to share your view) I'm not sure what it's about.

The most likely guess is something that we are missing or are unaware of as Patler has stated. Obvious choice is always increasing power, which we've seen evidence of from both sides. I am certain that the main issue is NOT money, if it were, that's simple to fix, with or without numbers. Again, both sides have qualified financial people with access to plenty of data, certainly enough to bridge that gap.



You use Miami as an example - but all we can do is divinate the reason for selling of pieces of the team. If the NFL has a problem, why don't they offer to open up ONE team's books - a sacrificial lamb, Mike Brown would be a good choice, he's a notorious cheapskate. Ralph Wilson perhaps, he's so old he doesn't care. Open up the one set of books, and show us that someone is in trouble.

All we can do is speculate all of the issues. We have access to very limited data of any type.

Almost all of these owners are very successful businessmen in areas other than the NFL. They understand the risks and pitfalls of taking on partners. Ross is being very careful with his "partners" I am sure, but there is still a rationale. If it were one or two high profile folks, I'd say it's marketing, but it's more than that.

He needs (maybe a bad word) the money for some reason. Equity capital can be a way to raise capital without affecting existing debt ratios, or mortgaging the future with another payment. If there are no profits, there is no distribution. Agreements can be written limiting distribution of earnings, raising one time cash, with no near term future payments. Could be effective for certain expansion plans. Sheer speculation on my part, but not unreasonable either.

There already are one teams financials out there - OURS. It isn't good enough for the NFLPA*. Those numbers give some credence to what the owners are claiming. Again, glossed over by the union. My guess is that it's a game of "all or nothing" for the Union. That's why I think there is more to this than money. Hell of a gamble for that.

[Guiness]

And the players are trying to force the owners into a reasonableness discussion. Not much difference.A reasonablness discussion? I'm not sure what that means (seriously)




The most likely guess is something that we are missing or are unaware of as Patler has stated. Obvious choice is always increasing power, which we've seen evidence of from both sides. I am certain that the main issue is NOT money, if it were, that's simple to fix, with or without numbers. Again, both sides have qualified financial people with access to plenty of data, certainly enough to bridge that gap.That's a scary thought, and I hope you're wrong. Because you are correct, if it's about money, it's just a matter of dividing it up one way or the other. Then neither side will want to throw away a season, because they'll never earn that money back.

If this is about egos and power....ouch.



There already are one teams financials out there - OURS. It isn't good enough for the NFLPA*. Those numbers give some credence to what the owners are claiming. Again, glossed over by the union. My guess is that it's a game of "all or nothing" for the Union. That's why I think there is more to this than money. Hell of a gamble for that.I know, but it's admittedly a small sample size, and I don't think the Pack is representative of the league as a whole. We're a unique situation in all of pro sports, being a public company, and likely the smallest city with a franchise in all of pro sports. You can hardly point at us and claim we're the status quo.

[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/sportsdata/football/nfl/salaries/team). You might think it's unlikely, but no one knows, do they?

[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.

[Guiness]

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.

*sigh*

Been there, done that. This discussion has been had many times, some of them in this thread, I believe. The NFL is not a 'normal' business, and the rules governing business practices don't apply to it. Hence the anti-trust exemption, among other legal oddities. So no, the owners can not say 'go F*ck yourself' and be done with it. Or they would have already.

[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]

*sigh*

Been there, done that. This discussion has been had many times, some of them in this thread, I believe. The NFL is not a 'normal' business, and the rules governing business practices don't apply to it. Hence the anti-trust exemption, among other legal oddities. So no, the owners can not say 'go F*ck yourself' and be done with it. Or they would have already.

But again I disagree with that assertion. The NFL is a corporation with franchises. The "anti trust" exemption is bullshit as anyone can start a league. Not just anyone can open a franchise, which is consistent with any other business. and yes, the master corporation CAN dictate wages to the franchises (although usually minimums, not maximums)

[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.

[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.

[Guiness]

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.

It happens. I was going post my own experiences in my previous post - decided not to, but I think it relates.

Company I work for ran into some tough times a few years ago. Contracts dried up (not the company's fault - industry pretty much shut down) and things were tight. The employees kicked in some funds to keep it afloat, and took voluntary pay cuts. I took a voluntary lay-off.

Owners (there are two of them) were very open about the finances, the company's position, and how we were progressing. Frequent updates showing profits and losses. We're back on our feet now, actually doing very well, and we still have meeting quartely or so showing a lot of financial information. I work as a contractor now, and I am generally shown a copy of the PO from the company my services are for, so I know what percentage of the day rate I'm taking home.

[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...

[bobblehead]

It happens. I was going post my own experiences in my previous post - decided not to, but I think it relates.

Company I work for ran into some tough times a few years ago. Contracts dried up (not the company's fault - industry pretty much shut down) and things were tight. The employees kicked in some funds to keep it afloat, and took voluntary pay cuts. I took a voluntary lay-off.

Owners (there are two of them) were very open about the finances, the company's position, and how we were progressing. Frequent updates showing profits and losses. We're back on our feet now, actually doing very well, and we still have meeting quartely or so showing a lot of financial information. I work as a contractor now, and I am generally shown a copy of the PO from the company my services are for, so I know what percentage of the day rate I'm taking home.

Well, this and RG's post reaffirms my position that individual owners (small business) make better bosses than corporate people. Individuals tend to view the people that help them get rich in a more favorable light than corporate lackeys do.