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.
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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...022406519.html
More to ponder...
http://www.time.com/time/nation/arti...043784,00.html
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."
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 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.
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.
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.
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.
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.
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.
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.
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?
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?
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.
Thanks, RG.
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.Quote:
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%
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)
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.
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.
And the players are trying to force the owners into a reasonableness discussion. Not much difference.
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.
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.
A reasonablness discussion? I'm not sure what that means (seriously)
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.Quote:
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.
If this is about egos and power....ouch.
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.Quote:
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.
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.
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!"
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)?
damn, just lost my post! Stupid auto-logout.
You're asking me to make a 'fairness' judgment again. It depends on the job - Jerry Jones once appointed himself assistant coach. What if he called himself head coach, and decided to pay himself like a top one, at $10mil/year? Al Davis could be called head of football operations, that worth a couple million. In today's salary structure, I don't think anyone would care about those numbers.
What would they care about? Using my 1982 example, $90K is 1.5% of 6 million. Today's annual NFL salary is hard to pin down, but I'm pretty sure it's over $1.5million. Let's use that number, it makes the math easy. $1.5 million is 1.5% of 100 million. If an owner was paying themselves that, it should rightly be considered profit, not an expense for the purpose of league calculations (even if Uncle Sam doesn't care).
IMO I'm not so sure that isn't happening. New England sells out their home games, and I think they have a pretty good stadium. However, their 09-10 cap number was relatively low at $97million. How much is Robert Kraft taking home? What about Clark Hunt in KC, with his league lowest cap number of $82million? (source: USA today, http://content.usatoday.com/sportsda.../salaries/team). You might think it's unlikely, but no one knows, do they?