Labor Agreement 2010: Uncapped Year/What Does This Do To GB?

[Waldo]

Seeing how we will probably have an uncapped 2010...a couple of interesting points came up...

1) Dumping. If all the teams who run a foolish cap like the Raiders, Redskins, Cowboys, etc...get their way and dump the bad contracts, this will help them reload immediately even if a cap comes into place 2011 or beyond. This is bad news for teams in smaller markets who run great cap schemes like the Packers, Ravens, Eagles, Titans, etc. as of late. What incentive did they have to keep all this in check when we they could have run roughshod like Crazy Al. There's more to this.

2) Once uncapped..hard to get back. This would be tough, as I'm sure the NFLPA would be fine to let the players suffer for a year or so of tags, etc. to open it up over the long haul for $25-$30 million annual contracts for QB's and the premium players. The minimum players won't suffer much in the long haul either as there won't be a minimum salary.

3) Tags become more plentiful. This sounds good in theory, but when the top owners start paying HUGE salaries, these tags go up so much it would be hard in 2014 to tag Barnett at $17 million a year when that is the top 5 MLB salary potentially. These tags will get insane and unused by smaller market teams. Yes, the Packers are #10 in revenue, but I disagree that we are better off than most every owner as Waldo stated. We have about $150-200 million in reserves, that could be depleted in a short period of time with a few uncapped seasons...turning the NFL into MLB by 2012 or so. That is scary as GB could not keep up in the long haul. There's no poor owners in the NFL as EVERY team has a payroll of $100 millon. Some teams would eventually fold in an uncapped league over time.

4) Loss of Draft. This is really bad as the top 5 owners can bid away in a mini-FA type of way to solidify their teams. Hard to blame a top RB out of college when he could get $12 million a year from Jerry Jones or $6 million from the Packers in a few years.

Bottom Line:

Not much scares Snake, as only one year of an uncapped league isn't too bad....but, a future like this will turn the NFL into MLB and the hell if I'll religiously follow a Packer team just hoping to get some retreads and young guys together to MAYBE make a run at 9-7 after several years of missing the playoffs to NY, Chicago, etc. like baseball. I'd give up sports as it's such a drain to see what happened to baseball. 2008 BrewCrew is a long memory now, as the Mets, Yanks, Cubs, etc. run baseball EVERY year. Let's just hope this doesn't happen to the NFL. But it may happen.

Everyone is afraid of the mythical "deep pocket owner" who is willing to blow hundreds of millions of dollars in order to win. What owners do you think are stupid enough and well off enough to do this. The point of a business is to earn a profit, not basically burn money. The Yankees and whatnot are still profitable in MLB.

[sharpe1027]

Everyone is afraid of the mythical "deep pocket owner" who is willing to blow hundreds of millions of dollars in order to win. What owners do you think are stupid enough and well off enough to do this. The point of a business is to earn a profit, not basically burn money. The Yankees and whatnot are still profitable in MLB.

I am afraid of small market teams running in deficits and still being 1/3 of the bigger market teams. Granted, baseball is currently setup with a larger gap between teams; however, isn't part of the reason for the gap that fans realize their small market teams are playing against a stacked deck? Look at the Brewers, their revenue was consistently bottom of the barrel and in deficits

I can see something similar happening in the NFL, the fans of small market teams see their team losing and, unlike today, feel that it is due to an unfair system. That turns off the fans and the losing team gets in a deeper and deeper hole.

[Zool]

Maybe I missed this somewhere, but does the lack of a cap have any effect on the profit sharing in the NFL?

[Waldo]

Everyone is afraid of the mythical "deep pocket owner" who is willing to blow hundreds of millions of dollars in order to win. What owners do you think are stupid enough and well off enough to do this. The point of a business is to earn a profit, not basically burn money. The Yankees and whatnot are still profitable in MLB.

I am afraid of small market teams running in deficits and still being 1/3 of the bigger market teams. Granted, baseball is currently setup with a larger gap between teams; however, isn't part of the reason for the gap that fans realize their small market teams are playing against a stacked deck? Look at the Brewers, their revenue was consistently bottom of the barrel and in deficits

I can see something similar happening in the NFL, the fans of small market teams see their team losing and, unlike today, feel that it is due to an unfair system. That turns off the fans and the losing team gets in a deeper and deeper hole.

The Packers may be in a small market but they are not the Bills or Vikings that need handouts from the other NFL teams to stay afloat. The Packers are consistently one of the highest revenue teams, we pay into the pot that keeps the Bills and Vikings and whatnot (the low revenue teams) afloat. Aside from city size, GB has very little in common with other small market teams, in terms of revenue, GB competes with teams like the Giants and Steelers, not with the Vikings and Bills, and is more of a big market team when looking at popularity and revenue.

You also have to remember, GB has no owner to skim profits off the top. Other owners want some sort of return for their billion dollar investment. GB's only profits required are enough to keep the reserve growing at the rate of revenue inflation. Aside from that they can go closer to the revenue line than an average team can.

[Patler]

The Packers may be in a small market but they are not the Bills or Vikings that need handouts from the other NFL teams to stay afloat. The Packers are consistently one of the highest revenue teams, we pay into the pot that keeps the Bills and Vikings and whatnot (the low revenue teams) afloat. Aside from city size, GB has very little in common with other small market teams, in terms of revenue, GB competes with teams like the Giants and Steelers, not with the Vikings and Bills, and is more of a big market team when looking at popularity and revenue.

You also have to remember, GB has no owner to skim profits off the top. Other owners want some sort of return for their billion dollar investment. GB's only profits required are enough to keep the reserve growing at the rate of revenue inflation. Aside from that they can go closer to the revenue line than an average team can.

The questions will be if and how long the Packers can stay among the leaders in revenue. Before the stadium renovation, they were dropping quickly, and I believe had descended to near the middle of the pack, or slightly below. As more teams build destination type venues, the Packers will continue to fall. It is doubtful that the Packers will be able to compete in development, they simply will not have the financial backing to do so.

While the Packers do not have an owner, that is both good and bad. There is no owner taking profits from the operation, but they also do not have an owner that can supply financial backing to development projects. The Packers will always be coming to local governments, hat in hand, when a new project is needed. A true owner with other businesses can finance a project like the new Cowboys stadium, the Packers could not to the same extent that Jones did. The future will be more and more of those types of developments. Lambeau Field will be antiquated before we know it, and the Packers will be a middle of the group team financially.

As some have suggested, the more important issue is revenue-sharing, particularly broadcast income. While the Packers have a solid fan base, it is doubtful that local TV or radio broadcasts will ever be able to compete with those in the major markets. That is the problem faced by MLB right now. The Brewers TV and radio income is but a small fraction of that received by the Yankees. Some of that has to do with fan base, some just the realities of the economic communities in which they operate. The same with ticket prices. Waiting list or no waiting list, the Packers have to be somewhat careful with ticket prices. For other teams that is not as sensitive of an issue.

In a lot of ways, the salary cap and revenue-sharing are intertwined. If the salary cap disappears, owners like Jerry Jones and others will not want to share their income. The more they can keep for themselves in an uncapped environment the easier it will be to build a roster of talented players.

[mraynrand]

The Packers could also drop dramatically in draw should they not continue to win, and win regularly. Even with winning, they will struggle if they don't find a marquee player to replace Favre. Maybe Rodgers is that guy, maybe not (I'm not talking strictly ability here - I'm talking a combination of ability and charisma that draws fans in). There are guys who have talent all over the place, but don't draw as well because of lack of personality. This is a bit of a side note, but it's a factor. The loss of Favre and the full effects on the draw of the franchise isn't yet known. A good first indication might be how many prime time/national games they get this year.

[red]

yup, right now we lack a star player that can sell all over the world like favre did

the team made a lot of money off that guy

[sharpe1027]

The Packers may be in a small market but they are not the Bills or Vikings that need handouts from the other NFL teams to stay afloat. The Packers are consistently one of the highest revenue teams, we pay into the pot that keeps the Bills and Vikings and whatnot (the low revenue teams) afloat. Aside from city size, GB has very little in common with other small market teams, in terms of revenue, GB competes with teams like the Giants and Steelers, not with the Vikings and Bills, and is more of a big market team when looking at popularity and revenue.

You also have to remember, GB has no owner to skim profits off the top. Other owners want some sort of return for their billion dollar investment. GB's only profits required are enough to keep the reserve growing at the rate of revenue inflation. Aside from that they can go closer to the revenue line than an average team can.

The problem still exists regardless of which camp you think GB might fall into. Also remember that GB has not always been among the highest income teams. Their revenue goes up and down with their product. Large market teams, however, can survive many years of an inferior product due to their large population centers.

Another factor is that owners of smaller sports teams often take a tax-write off for losses rather than skim off the top. What they are really in it for is to grow the value of the team and eventually sell them for a profit. Look at Herb Kohl, he has often run the Bucks with a negative cash flow, but the value of the team is probably triple what he originally bought them at. The Packers do not have that option.

[Waldo]

It isn't the population, it is the revenue generating ability of the stadium. Lambeau is in the top 10 in that ability, plus things like the HOF and pro shop allow it to have a year round mecca-like appeal that many teams don't have.

[Patler]

I'm not that worried about the "Favre effect". The games will sell out without Favre. The games will sell out even if the Packers are not as successful. They did in the '70s and '80s. For the vast majority of Packer fans, the loyalty and dedication runs much deeper than just one player, and it runs much deeper than just success in the short term. The fans will buy every ticket available, they will come to the games and spend there money on concessions. The Packer HOF will have just as many visitors, and parents will buy memorabilia for their kids (and themselves) even if it isn't Favre stuff.

There may be no one player who sells as much as Favre, but purchases are likely to be spread over other players. What they will miss out on are the sales to non-Packer fans who have bought Favre stuff, "just because". But in the long run, that is a minor (although not totally insignificant) factor.

[Patler]

It isn't the population, it is the revenue generating ability of the stadium. Lambeau is in the top 10 in that ability, plus things like the HOF and pro shop allow it to have a year round mecca-like appeal that many teams don't have.

But other teams are catching up and surpassing the Packers in that regard, and comparably equipped the Packers will not generate as much revenue from Lambeau as a similar stadium in Dallas or NY, for example. The Packer will not be able to charge as much to rent the stadium for events, because the local economy will not pay as much. The Packers luxury box prices will not keep up, nor may ticket prices generally. They won't be at the bottom of the league, but not the top either.

Of more concern are the plans for weekend destination packages that some are proposing. A complex with the stadium, adjacent hotels, shopping malls, other entertainment, even other sports facilities. The revenue potential of these types of things are enormous, and some have suggested the team itself could be a loss-leader. Jones has some of that in mind in Dallas I believe, as does the developer for the proposed stadium in L.A. The Packers/G.B./Wisconsin would be hard pressed to compete with that.

[texaspackerbacker]

I'm not that worried about the "Favre effect". The games will sell out without Favre. The games will sell out even if the Packers are not as successful. They did in the '70s and '80s. For the vast majority of Packer fans, the loyalty and dedication runs much deeper than just one player, and it runs much deeper than just success in the short term. The fans will buy every ticket available, they will come to the games and spend there money on concessions. The Packer HOF will have just as many visitors, and parents will buy memorabilia for their kids (and themselves) even if it isn't Favre stuff.

There may be no one player who sells as much as Favre, but purchases are likely to be spread over other players. What they will miss out on are the sales to non-Packer fans who have bought Favre stuff, "just because". But in the long run, that is a minor (although not totally insignificant) factor.

This is pretty much what i was gonna say.

Mega-dittos.

[sharpe1027]

It isn't the population, it is the revenue generating ability of the stadium. Lambeau is in the top 10 in that ability, plus things like the HOF and pro shop allow it to have a year round mecca-like appeal that many teams don't have.

It is about the revenue generating ability of the team, which the stadium is a significant part of, but not all of. The population does matter. For example, outside of stadium revenue the other significant portion of the revenue is advertising. When a team is not doing well, they get less National games and have to rely upon the local advertising more heavily. A locally covered game that has the potential to reach 30 million is going to generate a hell of a lot more than one that has the potential of reaching 4 million.

Besides, the Packers were only 13th in revenue last year, not exactly leading the pack (no pun intended). They had an operating cost of less than 22 million (bottom half of the league), whereas the Redskins had operating costs over 58 million, and that is with a salary cap and heavy revenue sharing.

http://www.forbes.com/lists/2008/30/sportsmoney_nfl08_NFL-Team-Valuations_Revenue.html

[SnakeLH2006]

It isn't the population, it is the revenue generating ability of the stadium. Lambeau is in the top 10 in that ability, plus things like the HOF and pro shop allow it to have a year round mecca-like appeal that many teams don't have.

It is about the revenue generating ability of the team, which the stadium is a significant part of, but not all of. The population does matter. For example, outside of stadium revenue the other significant portion of the revenue is advertising. When a team is not doing well, they get less National games and have to rely upon the local advertising more heavily. A locally covered game that has the potential to reach 30 million is going to generate a hell of a lot more than one that has the potential of reaching 4 million.

Besides, the Packers were only 13th in revenue last year, not exactly leading the pack (no pun intended). They had an operating cost of less than 22 million (bottom half of the league), whereas the Redskins had operating costs over 58 million, and that is with a salary cap and heavy revenue sharing.

http://www.forbes.com/lists/2008/30/...s_Revenue.html

Exactly what Snake was getting at earlier. I'm not hung up on the fact that we are ok with generating revenue with sellouts and the Packer shops. That will always be the case. The difference being that Lambeau is a one-stop arena for football only, in a league with the NY teams, Dallas, etc. getting mega-stadiums for multipurpose events to rake in cash year round. In an uncapped market with limited or no revenue sharing as Jerry Jones is pushing for...we are at a loss, as our profits vs. bigger markets will really de-escalate quickly.

Over time without a cap/esp. revenue sharing..the Packers will be much like the Bucks and Brewers in a small market without nationwide appeal as far as market share/media (top games), etc. We would lose out as top FA's would go to the highest bidder everytime much like in MLB as they would/could pay top dollar in LA, NY, etc.

Bottom Line:

Without a cap/revenue sharing (and I know we marginally pay in on revenue sharing right now...but...)...it doesn't matter if we are #13 making a $20 million profit right now....it would evaporate quickly as the power owners and big market teams would take all the major cash they are generating for themselves and leave GB in the cold, literally. It's scary and a possibility for sure. Lambeau is maxed out and since the renovation, there's not much more GB can do to generate more profit than they do now...and that's with a cap and revenue sharing.

P.S. With news of Haynesworth's $100 million dealio with Big Bad Dan in Washington....this would only get worse in an uncapped league. Dayummm. This is why uncapped means failure for many teams. Who can compete with that in GB...with a cap???

[Fritz]

Does anyone really think Pittsburgh or Arizona would be the SuperBowl teams in an uncapped league like baseball?

Arizona won the series in 2001. Last year the Rays made it to the world series.

I actually prefer the way the business side of the MLB is handled better the NFL. In baseball a contract still means something. You don't see players holding out. You don't see rookies getting monster pay days until they actually produce for a few years.

Not so, in my opinion. My team, the Tigers, regularly hands out huge contracts to guys they draft who have never played an inning in even the minors. Rick Porcello. Andrew Miller. Cale ("Son of Garth") Iorg received a million-plus contract (or was it two million?) before he went on a two year mormon mission, which the Tigers were aware of when they forked over the contract.

At least the Pack waited for Brady Poppinga to come back before they paid him.