NFL may void CBA this Tuesday

[pbmax]

The free riding problem has been with the NFL for four decades and other that a few questionable franchises, it wasn't much of a problem. Remember Art Modell said the owners were 28 Republicans who vote Socialist.

What has changed is the source of revenue growth. It used to be all in the national TV contract. But teams with a high debt load (and if you recall, the debt rules for teams was the opening salvo in this round o' CBA jawing) like the Redskins and Cowboys, needed to increase revenue to service that debt and that meant maximizing local revenues. More revenue is a good thing except....

Smaller market teams do not have the same growth potential (see MLB and NBA) on that front. And they don't share that revenue as evenly as the TV contacts. Still not a problem except....

Players are a large part of the reason that revenue is available. To me, it stands to reason that that revenue is not special or protected, it is generated partly because of the efforts of the players. And their pay should be reflective of that revenue. Argue all you wish to about what percentage.

So now you have a problem. Unequal, unequally shared revenue is now flowing to players. That does affect the bottom line of the smaller teams. If the owners cannot amend the sharing of the local revenue and seek to recover it from the players, it will be a more difficult negotiations than last time.

Just remember, when large corporations tell you they lost money last year, they are often referring to profits being lower this year than they were last year. Few NFL franchises likely operated in the red, and likely all increased in overall value.

[Patler]

The Packers throw a very interesting variable into this debate. A very successful franchise and a very popular one among all NFL fans. But their local fan base is not a wealthy one, and they are the smallest of small market franchises. To top it all off, they want to be profitable, but their is no owner interested in maximizing profit from operations or value for an eventual sale.

Some argue that GB should be the model for all NFL franchises, others argue that it should be virtually ignored in the analysis because it is truly unique in all of pro sports.

[pbmax]

I tend to think a compromise between both extremes is more in order. Share the national incomes, game incomes, etc. and gear the salary cap and other team expenses toward those incomes. However, if an owner buys a very valuable franchise and capitalizes more on its fan base through innovative marketing, I have no problem with that owner earning more profit than some other owner who doesn't actively market the product.

The Redskins are an example of a fly in the ointment. If you exclude local revenues from salaries to reward innovative teams, then the Redskins can continue to spend well above other teams in cash over the cap. That gives larger revenue teams an advantage.

This is not entirely a bad thing, as less efficient teams should have some incentive to improve and put a better product on the field. But as the Redskins have also proven, spending money poorly doesn't translate to wins. But it does raise the cost of players and creates additional obstacles for smaller revenue teams.

I would like a model that rewards wins, not just market size. But that is unlikely to be forthcoming. I am less interested in marketing than I am in better football teams.

[Patler]

There is a problem also with the changing nature of NFL franchises. Local communities are realizing that while a pro franchise in their area is a nice thing to have, it is not essential. Owners paying more and more for stadiums and other improvements have to compete with others who haven't yet had to make those investments. It is easy to understand why some teams see the need to maximize local incomes.

For a long time owning an NFL team was almost a hobby-like undertaking. It is becoming more and more of a pure business adventure. Even the Packers are branching out in acquiring land for future use. It will be very interesting to see what they have in mind for it.

[pbmax]

Agreed, the Packers and to a lesser degree the Steelers, have proven that market size is not determinative. As a model, the Packers ownership structure is probably not something that could be duplicated. But the success locally in Green Bay and Pittsburgh could probably be.

As long as the CBA enables smart teams to be successful without access to top dollars, then the NFL will be OK.

The Packers throw a very interesting variable into this debate. A very successful franchise and a very popular one among all NFL fans. But their local fan base is not a wealthy one, and they are the smallest of small market franchises. To top it all off, they want to be profitable, but their is no owner interested in maximizing profit from operations or value for an eventual sale.

Some argue that GB should be the model for all NFL franchises, others argue that it should be virtually ignored in the analysis because it is truly unique in all of pro sports.

[pbmax]

I know we have covered this before, but who has shelled out large team dollars for their new stadiums? How much has been public recently for Seattle, Dallas and Washington?

Much of the current debt being serviced though, is debt acquired when they bought the team. Most recent franchise purchases have been heavily leveraged

There is a problem also with the changing nature of NFL franchises. Local communities are realizing that while a pro franchise in their area is a nice thing to have, it is not essential. Owners paying more and more for stadiums and other improvements have to compete with others who haven't yet had to make those investments. It is easy to understand why some teams see the need to maximize local incomes.

For a long time owning an NFL team was almost a hobby-like undertaking. It is becoming more and more of a pure business adventure. Even the Packers are branching out in acquiring land for future use. It will be very interesting to see what they have in mind for it.

[Patler]

The Redskins are an example of a fly in the ointment. If you exclude local revenues from salaries to reward innovative teams, then the Redskins can continue to spend well above other teams in cash over the cap. That gives larger revenue teams an advantage.

If you have a relatively stable salary cap, with only moderate increases, the extra cash some teams have won't matter as much. The 'Skins have been bailed out by the huge cap increases in recent years, as have a few other teams. Eventually that won't be the case and the extra cash spent on deferred player compensations like signing bonuses will catch up to them in later seasons.

[Patler]

I know we have covered this before, but who has shelled out large team dollars for their new stadiums? How much has been public recently for Seattle, Dallas and Washington?

I really hadn't looked at it in great detail, but it was my impression that the Cowboys were paying a very large portion of their new stadium. I just looked it up, and a report in February listed the city's investment at $475 million and Jones investment at $725 million.

The best I can tell, Seattle seems to have gone this way, Allen bought the team for $200 million and contributed $160 million of his own cash toward the new stadium. Something like $300 million for the stadium was financed by a combination of ticket holder "seat licenses", income from ongoing operations and local government contributions.

[bobblehead]

I would just like to point out that the NFL "broke" the union once before only to have the courts step in later. Being that all the information is on the table now (unlike the past) I think they will come to a fair and reasonable solution. If there is NO cap and NO rules the packers could simply sign 54 idiots to 5k a year salaries for sundays only and ruin the league. I don't think the players or owners really want that.

The owners understand the value to everyone of having every team have a shot at being competitive even if the TO's and Moss's of the world aren't smart enough to see past the next check. (Ok, most of the owners).

If the players aren't reasonable I see the union being "broken" again and this time they may never get back what they lost.

[Patler]

I would just like to point out that the NFL "broke" the union once before only to have the courts step in later. Being that all the information is on the table now (unlike the past) I think they will come to a fair and reasonable solution. If there is NO cap and NO rules the packers could simply sign 54 idiots to 5k a year salaries for sundays only and ruin the league. I don't think the players or owners really want that.

The owners understand the value to everyone of having every team have a shot at being competitive even if the TO's and Moss's of the world aren't smart enough to see past the next check. (Ok, most of the owners).

If the players aren't reasonable I see the union being "broken" again and this time they may never get back what they lost.

I don't see this as an attempt to break the union at all. Nor do I think that will ever happen.

This is just some owners pushing the other owners to exercise a clause in the agreement that allows them to force early renegotiation.

[BF4MVP]

PLEASE keep the salary cap...

The lack of a salary cap is what really pisses me off about baseball..

Not being allowed to be a free agent until you've had 6 years of experience sounds a lot like baseball too..

[GBRulz]

Even the Packers are branching out in acquiring land for future use. It will be very interesting to see what they have in mind for it.

one word. parking.

[MJZiggy]

Wonderful thread.

[Patler]

Even the Packers are branching out in acquiring land for future use. It will be very interesting to see what they have in mind for it.

one word. parking.

Short term, but don't you think they also have some other schemes in mind??

[Patler]

Wonderful thread.

Maybe we should be the "Packernerds" instead of the "Packerrats"?