woodbuck27
08-23-2006, 06:02 PM
New Commissioner Faces a Fiery Baptism
http://graphics10.nytimes.com/images/2006/08/22/sports/22commissioner_600x380.jpg
Roger Goodell at a news conference earlier this month. The first thing on his agenda as the N.F.L.’s new commissioner will be finding a compromise on revenue sharing.
By JUDY BATTISTA
Published: August 22, 2006
One by one, the owners of the National Football League trickled out of a ballroom two weeks ago, a new commissioner elected, and a new round of politicking about to begin. As their limousines idled outside, the owners sent a pointed message to one another and to the players union, and made clear that Roger Goodell’s honeymoon as commissioner might not last long.
They want a revenue-sharing solution, the owners said, and they are increasingly unhappy with the collective-bargaining agreement they negotiated five months ago, which they say gave too much revenue to players.
The owners were stating the obvious. The rest of Goodell’s agenda as commissioner  international growth, new media, a team in Los Angeles  can go nowhere until the complex money issues are resolved.
The conversations that will lead to a revenue-sharing resolution are likely to further irritate the already prickly relations between officials from the league’s high-revenue teams and its low-revenue teams, some of whom have been particularly vocal in their displeasure with the agreement.
“The very first resolution in Roger Goodell’s tenure will alienate him from everyone,†said an executive from one low-revenue team, who was granted anonymity because he was not authorized to speak publicly about his team’s position on the deal. “Nobody will express happiness with it.â€Â
In a gathering with reporters yesterday, the outgoing commissioner, Paul Tagliabue, said he had told Goodell, who was closely involved in the negotiations of the new contract, to learn as much as he could about how the new collective-bargaining agreement would work.
Tagliabue also sounded a warning for owners who have already started complaining that they cannot live with the deal.
“Anyone who thinks they understand the economics of the current labor deal is either uninformed or kidding you because until they get through the first year or the first two years, no one’s going to understand the economics of this deal because it’s a new deal,†Tagliabue said.
The arguments are not new. Several owners of high-revenue teams have said they should not be penalized for their ability to make money from local sources, and on occasion they have even referred to revenue sharing as writing “welfare checks†to owners who, in some cases, do not exhaust all means of increasing their own local revenue.
In addition, owners who have new stadiums  which are usually linked to explosive growth in revenue for franchises  point to the enormous debt they have taken on to build them.
But owners of low-revenue teams believe their very existence and certainly their competitiveness, will be threatened if they do not receive enough from the revenue-sharing pot.
As unhappiness festers, some owners and team executives have mentioned the possibility that owners could choose to exercise their right to opt out of the labor deal in November 2008. That would force the owners and the players union back to the bargaining table to avert a season played without a salary cap, and a potential work stoppage.
“The way things are now, it would be very difficult to continue this agreement,†said Robert K. Kraft, the owner of the New England Patriots. “Hopefully, we’re wise enough to tweak this arrangement. It’s like government. If you want to do Great Society programs, you have to have a great economy. If you want to have it be win-win, you have to grow the business.â€Â
The collective-bargaining agreement calls for players to receive 59.5 percent of total revenue, which many owners now say is too much. Some concede that the union was able to get that much because owners had not resolved their own divisions over revenue.
The agreement also included a new plan for the sharing of some locally generated revenue. That plan calls for the 15 teams with the highest revenue in the league to contribute money to a pool that would then be distributed to teams with lower revenue.
That pool would be about $100 million to $150 million each season, only about 2 percent of total revenue in a league that is generating more than $6 billion a year. For low-revenue teams, their portion of the revenue sharing pie is a critically important part of their budget planning. At issue is which teams will get how much money from the pool, and the criteria that a team must meet to get their revenue-sharing check.
Owners had hoped to have the matter settled by now. The league has hired the consulting firm McKinsey & Company to study revenue sharing and to analyze how each franchise exploits local revenue streams  like stadium-naming rights, luxury suites, in-stadium advertising  within the constraints of its community. That will help determine which teams deserve how much money. McKinsey was also hired to dial down the rancor between owners.
“There’s nobody that can’t field a competitive team now,†said the Jets’ owner, Woody Johnson. “There might be a time where teams should be helped. The whole success of the league depends on the 32nd team being able to win the Super Bowl. How do you encourage risk-taking? Because without risk-taking you have no growth. But if teams take risk, they have to have assurances that they’ll get their money back. How do you balance that in a way that is fair?â€Â
The salary cap is intended to keep teams competitive by offering some restraint on the spending for players. According to Forbes magazine, the Washington Redskins, the team with the highest value, made $120 million more in 2004 than the Minnesota Vikings, the team with the lowest value. That extra revenue becomes most apparent in other spending: upgraded training facilities or higher pay for assistant coaches. Those are the things that low-revenue teams fear will erode their ability to compete.
The Buffalo Bills’ owner, Ralph Wilson, one of only two owners who voted against the collective-bargaining agreement, has been one of the most outspoken critics of the deal and of the revenue-sharing plan. He has involved political leaders in his effort to draw attention to Buffalo’s situation.
In a letter obtained by The New York Times, Tagliabue sought to assure State Senator George D. Maziarz that the Bills could be successful under the new deal.
“In recent years, the Bills have had revenues at levels that have enabled them to avoid heavy dependence on special C.B.A.-related revenue sharing; the only distribution to the Bills in the current decade was $481,000 in 2003,†Tagliabue wrote in a letter dated Aug. 10.
For the sake of budget planning, the revenue sharing plan needs to be in place by the end of the regular season.
Goodell is likely to have support from a core group of moderate, in revenue and in temperament, owners, including the Giants’ John Mara and the Steelers’ Dan Rooney. Goodell’s task will be to persuade high-revenue owners like Kraft and Jerry Jones of the Dallas Cowboys to buy into a revenue-sharing plan, and then to draw a few of the low-revenue owners into the fold.
Twenty-four of the 32 owners must approve a revenue-sharing plan and if they do not, the commissioner can decide himself. And even then, the labor deal will almost certainly have to be tweaked, at least to avoid the owners’ opt-out.
“What the changes are, I don’t think you can sit here today and say what they’re going to be until you understand how the deal works,†Tagliabue said of the new deal. “So anyone’s who’s declaring it either dead or alive is, like I say, either uninformed or at best premature.â€Â
Carmen Policy, the former president of the Cleveland Browns, recalls negotiating with Goodell about the price that would be paid by Al Lerner for the expansion team. Lerner asked for a discount on the fee but Goodell told him no.
“He was merciless,†Policy said with a laugh. “Out of the left side of his mouth, he’s telling you he loves you and you’ll be the best owner. And out of the right side he’s saying, ‘All you have to do is pay the most money.’ â€Â
Goodell will need that guile now. Kraft said Goodell’s easy personal style was disarming but should not be mistaken for him being a pushover. Owners will test him soon.
“He’s put 25 years of sweat equity in to get there,†Kraft said. “Be careful what you wish for.â€Â
http://graphics10.nytimes.com/images/2006/08/22/sports/22commissioner_600x380.jpg
Roger Goodell at a news conference earlier this month. The first thing on his agenda as the N.F.L.’s new commissioner will be finding a compromise on revenue sharing.
By JUDY BATTISTA
Published: August 22, 2006
One by one, the owners of the National Football League trickled out of a ballroom two weeks ago, a new commissioner elected, and a new round of politicking about to begin. As their limousines idled outside, the owners sent a pointed message to one another and to the players union, and made clear that Roger Goodell’s honeymoon as commissioner might not last long.
They want a revenue-sharing solution, the owners said, and they are increasingly unhappy with the collective-bargaining agreement they negotiated five months ago, which they say gave too much revenue to players.
The owners were stating the obvious. The rest of Goodell’s agenda as commissioner  international growth, new media, a team in Los Angeles  can go nowhere until the complex money issues are resolved.
The conversations that will lead to a revenue-sharing resolution are likely to further irritate the already prickly relations between officials from the league’s high-revenue teams and its low-revenue teams, some of whom have been particularly vocal in their displeasure with the agreement.
“The very first resolution in Roger Goodell’s tenure will alienate him from everyone,†said an executive from one low-revenue team, who was granted anonymity because he was not authorized to speak publicly about his team’s position on the deal. “Nobody will express happiness with it.â€Â
In a gathering with reporters yesterday, the outgoing commissioner, Paul Tagliabue, said he had told Goodell, who was closely involved in the negotiations of the new contract, to learn as much as he could about how the new collective-bargaining agreement would work.
Tagliabue also sounded a warning for owners who have already started complaining that they cannot live with the deal.
“Anyone who thinks they understand the economics of the current labor deal is either uninformed or kidding you because until they get through the first year or the first two years, no one’s going to understand the economics of this deal because it’s a new deal,†Tagliabue said.
The arguments are not new. Several owners of high-revenue teams have said they should not be penalized for their ability to make money from local sources, and on occasion they have even referred to revenue sharing as writing “welfare checks†to owners who, in some cases, do not exhaust all means of increasing their own local revenue.
In addition, owners who have new stadiums  which are usually linked to explosive growth in revenue for franchises  point to the enormous debt they have taken on to build them.
But owners of low-revenue teams believe their very existence and certainly their competitiveness, will be threatened if they do not receive enough from the revenue-sharing pot.
As unhappiness festers, some owners and team executives have mentioned the possibility that owners could choose to exercise their right to opt out of the labor deal in November 2008. That would force the owners and the players union back to the bargaining table to avert a season played without a salary cap, and a potential work stoppage.
“The way things are now, it would be very difficult to continue this agreement,†said Robert K. Kraft, the owner of the New England Patriots. “Hopefully, we’re wise enough to tweak this arrangement. It’s like government. If you want to do Great Society programs, you have to have a great economy. If you want to have it be win-win, you have to grow the business.â€Â
The collective-bargaining agreement calls for players to receive 59.5 percent of total revenue, which many owners now say is too much. Some concede that the union was able to get that much because owners had not resolved their own divisions over revenue.
The agreement also included a new plan for the sharing of some locally generated revenue. That plan calls for the 15 teams with the highest revenue in the league to contribute money to a pool that would then be distributed to teams with lower revenue.
That pool would be about $100 million to $150 million each season, only about 2 percent of total revenue in a league that is generating more than $6 billion a year. For low-revenue teams, their portion of the revenue sharing pie is a critically important part of their budget planning. At issue is which teams will get how much money from the pool, and the criteria that a team must meet to get their revenue-sharing check.
Owners had hoped to have the matter settled by now. The league has hired the consulting firm McKinsey & Company to study revenue sharing and to analyze how each franchise exploits local revenue streams  like stadium-naming rights, luxury suites, in-stadium advertising  within the constraints of its community. That will help determine which teams deserve how much money. McKinsey was also hired to dial down the rancor between owners.
“There’s nobody that can’t field a competitive team now,†said the Jets’ owner, Woody Johnson. “There might be a time where teams should be helped. The whole success of the league depends on the 32nd team being able to win the Super Bowl. How do you encourage risk-taking? Because without risk-taking you have no growth. But if teams take risk, they have to have assurances that they’ll get their money back. How do you balance that in a way that is fair?â€Â
The salary cap is intended to keep teams competitive by offering some restraint on the spending for players. According to Forbes magazine, the Washington Redskins, the team with the highest value, made $120 million more in 2004 than the Minnesota Vikings, the team with the lowest value. That extra revenue becomes most apparent in other spending: upgraded training facilities or higher pay for assistant coaches. Those are the things that low-revenue teams fear will erode their ability to compete.
The Buffalo Bills’ owner, Ralph Wilson, one of only two owners who voted against the collective-bargaining agreement, has been one of the most outspoken critics of the deal and of the revenue-sharing plan. He has involved political leaders in his effort to draw attention to Buffalo’s situation.
In a letter obtained by The New York Times, Tagliabue sought to assure State Senator George D. Maziarz that the Bills could be successful under the new deal.
“In recent years, the Bills have had revenues at levels that have enabled them to avoid heavy dependence on special C.B.A.-related revenue sharing; the only distribution to the Bills in the current decade was $481,000 in 2003,†Tagliabue wrote in a letter dated Aug. 10.
For the sake of budget planning, the revenue sharing plan needs to be in place by the end of the regular season.
Goodell is likely to have support from a core group of moderate, in revenue and in temperament, owners, including the Giants’ John Mara and the Steelers’ Dan Rooney. Goodell’s task will be to persuade high-revenue owners like Kraft and Jerry Jones of the Dallas Cowboys to buy into a revenue-sharing plan, and then to draw a few of the low-revenue owners into the fold.
Twenty-four of the 32 owners must approve a revenue-sharing plan and if they do not, the commissioner can decide himself. And even then, the labor deal will almost certainly have to be tweaked, at least to avoid the owners’ opt-out.
“What the changes are, I don’t think you can sit here today and say what they’re going to be until you understand how the deal works,†Tagliabue said of the new deal. “So anyone’s who’s declaring it either dead or alive is, like I say, either uninformed or at best premature.â€Â
Carmen Policy, the former president of the Cleveland Browns, recalls negotiating with Goodell about the price that would be paid by Al Lerner for the expansion team. Lerner asked for a discount on the fee but Goodell told him no.
“He was merciless,†Policy said with a laugh. “Out of the left side of his mouth, he’s telling you he loves you and you’ll be the best owner. And out of the right side he’s saying, ‘All you have to do is pay the most money.’ â€Â
Goodell will need that guile now. Kraft said Goodell’s easy personal style was disarming but should not be mistaken for him being a pushover. Owners will test him soon.
“He’s put 25 years of sweat equity in to get there,†Kraft said. “Be careful what you wish for.â€Â