NFL to end revenue sharing? Is this a bluff?

[digitaldean]

http://sports.espn.go.com/nfl/news/story?id=4718965

Just read this and it either looks like a poker player's bluff or a colossal mistake by the NFL.

Essentially, since 2010 is an uncapped year the owners the $100 million supplement given to 8 to 12 teams will be done away with. Supposedly due to the current labor agreement, the NFL is saying it only applies to capped seasons.

NFLPA is protesting this move.

So is this the first move to kill Pete Rozelle's golden goose? Somehow I have a BAAAD feeling about this.

[Rastak]

Just a small piece of it.


Here is what Florio had to say

http://profootballtalk.nbcsports.com/2009/12/06/legal-fight-looms-over-revenue-sharing/

In 2006, the NFLPA hinged its final proposal for a new CBA on the league's adoption of a meaningful system for sharing the unshared revenues, such as naming rights on stadiums and luxury suite fees.

The league complied, via a process that reallocates certain revenues generated by the team's earning the most money based on need.

But now ESPN reports that the league has informed the union that the supplemental revenue sharing plan will be scuttled in March 2010.

Per the report, the union plans to challenge the move via a "Special Master" proceeding, an arbitration-style legal claim resolved under the auspices of the federal court that supervises the Collective Bargaining Agreement.

The union plans to argue that the league can't make the change without the union's approval. The league contends that it has the right to do so without NFLPA consent.

The supplemental-revenue fund represents only 1.5 percent of the league's total revenue. Still, the redistributed money helps to ensure that all teams are profitable. Without it, some could be hurting -- and for a team like the Vikings it could be the final straw that forces a move to Los Angeles.

[CaliforniaCheez]

A Vikings move to LA means more revenue for the Packers.

At least $200K more for a game in LA than in the crappy Metrodome.

Plus the Packers don't have to give money anymore to the vikings.

[Waldo]

The Packers pay into, not take from, that fund, and it has only been around a couple of years. It isn't the main profit sharing from the TV contracts.

The team in the crosshairs that this pretty much screws the most is the Vikings.

All of the other very low revenue teams also tend to be very low expense teams. Minnesota is the only team that is spending like a wealthy team while earning like a poor team.

I've seen a couple estimates at how much money Wilf is bleeding into the team, as he has been operating big time in the red for a few years. Basically what I've seen has said that he can't sustain this, and shortly if he doesn't get a new stadium or sell/move the team, he'll have to pull a Bills and turn it into a poor house team. Like within the year shortly.

[pbmax]

The revenues in question are local revenues, not the National TV contracts, advertising or merchandising/licensing deals. The Florio quote was correct; they include things such as naming rights, concession deals, stadium advertising, lottery deals, etc. It used to be a very small share of overall revenues, but with new stadiums and new streams of revenue increasing faster than TV deals, it has become much more important. It is the driving force between creating have and have not teams in the NFL.

[Patler]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

[ThunderDan]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

Just looking at the 50 biggest cities in America to potential support an NFL team.

Los Angeles with 3.8 million, lost teams numerous times.
San Antonio with 1.5 million is the biggest city (non-NFL) without a team.
San Jose with 1 million but SF and Oakland are close.
Columbus, OH with 750,000.
Austin, TX with 750,000.
El Paso, TX 600,00
Milwaukee, WI 600,000 22nd biggest city in the USA.

Then you're down to the Las Vegas and Oklahoma Cities of the world.

[pbmax]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

And this only works until the current bottom of the league teams (in revenue and profit) relocate. Then they will need new bidding parties to up the ante for the next stadium, parking and concession deal. For short term cash, teams will then move back to the lower revenue cities, starting the whole cycle again. As long as public money is available for new stadiums, teams are going to rotate, revenue sharing or not. There cannot be a free market with only one buyer.

Regardless of local revenue sharing, teams will relocate. It happened well before local, revenue sharing and it will happen after it too.

In terms of the CBA, this is part one of the owner's bargain among themselves. Lower revenue teams will lose revenue sharing, which they don't believe compensates them fully for market size discrepancies. Large revenue clubs get to keep their revenue. Without a salary floor, everyone will keep more cash in reserve if a lockout looms in 2011.

[Patler]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

Just looking at the 50 biggest cities in America to potential support an NFL team.

Los Angeles with 3.8 million, lost teams numerous times.
San Antonio with 1.5 million is the biggest city (non-NFL) without a team.
San Jose with 1 million but SF and Oakland are close.
Columbus, OH with 750,000.
Austin, TX with 750,000.
El Paso, TX 600,00
Milwaukee, WI 600,000 22nd biggest city in the USA.

Then you're down to the Las Vegas and Oklahoma Cities of the world.

Doesn't necessarily have to be the largest cities.
Doesn't necessarily have to be in the United States.

[Patler]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

And this only works until the current bottom of the league teams (in revenue and profit) relocate. Then they will need new bidding parties to up the ante for the next stadium, parking and concession deal. For short term cash, teams will then move back to the lower revenue cities, starting the whole cycle again. As long as public money is available for new stadiums, teams are going to rotate, revenue sharing or not. There cannot be a free market with only one buyer.

Regardless of local revenue sharing, teams will relocate. It happened well before local, revenue sharing and it will happen after it too.

In terms of the CBA, this is part one of the owner's bargain among themselves. Lower revenue teams will lose revenue sharing, which they don't believe compensates them fully for market size discrepancies. Large revenue clubs get to keep their revenue. Without a salary floor, everyone will keep more cash in reserve if a lockout looms in 2011.

There will always be a bottom group of revenue producers, and there will likely always be another location trying to lure them away. It is a cyclical process that has stalled for a number of reasons. The owners, (and I suspect the players, too) want to get it started again.

[digitaldean]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

Just looking at the 50 biggest cities in America to potential support an NFL team.

Los Angeles with 3.8 million, lost teams numerous times.
San Antonio with 1.5 million is the biggest city (non-NFL) without a team.
San Jose with 1 million but SF and Oakland are close.
Columbus, OH with 750,000.
Austin, TX with 750,000.
El Paso, TX 600,00
Milwaukee, WI 600,000 22nd biggest city in the USA.

Then you're down to the Las Vegas and Oklahoma Cities of the world.

Doesn't necessarily have to be the largest cities.
Doesn't necessarily have to be in the United States.

So, that's the reason ol' Roger is pushing the London games???

[digitaldean]

http://www.twincities.com/ci_13941316?nclick_check=1

According to this report, the Vikes would stand to lose $15 to $20 million per year with this change.

With the way things are going with the Minn. legislature and the current budget deficit at $1.2 billion, it makes REALLY hard to push for a new Vikings stadium. Where could they come up with the money unless Wilf gets another partner?

[pbmax]

The interesting thing is that the players are opposing it. In the long run it is in the leagues interest and ultimately (long term) in the players interest to get rid of franchises in areas that do not adequately support them, and get those franchises into cities that will support them. More money for everyone. This move will hasten the weeding process.

The fans are the losers.

And this only works until the current bottom of the league teams (in revenue and profit) relocate. Then they will need new bidding parties to up the ante for the next stadium, parking and concession deal. For short term cash, teams will then move back to the lower revenue cities, starting the whole cycle again. As long as public money is available for new stadiums, teams are going to rotate, revenue sharing or not. There cannot be a free market with only one buyer.

Regardless of local revenue sharing, teams will relocate. It happened well before local, revenue sharing and it will happen after it too.

In terms of the CBA, this is part one of the owner's bargain among themselves. Lower revenue teams will lose revenue sharing, which they don't believe compensates them fully for market size discrepancies. Large revenue clubs get to keep their revenue. Without a salary floor, everyone will keep more cash in reserve if a lockout looms in 2011.

There will always be a bottom group of revenue producers, and there will likely always be another location trying to lure them away. It is a cyclical process that has stalled for a number of reasons. The owners, (and I suspect the players, too) want to get it started again.

I think it stalled because of a flurry of new buildings in existing cities and the fact that, despite the fractured broadcast network audience, football still has had rising contracts, in some cases, despite all evidence of ratings. One reason is that football is one of the few properties left that can deliver a sizable audience frequently and regularly.

Eventually, those numbers for contracts will come down as the NFL is already searching the sofa cushions for more games to put on TV. A regular Saturday and Thursday schedule is already being discussed. Then there is the 18 game schedule and London. It will not be long before they hit saturation like baseball and basketball.

Relocation is peanuts compared to those discussions. I think its essentially the byproduct of larger revenue clubs not wanting to give up the cash and lower revenue clubs thinking they got screwed by the last CBA. The cash cow I really fear is expansion.

[Patler]

Schedule expansion and geographic expansion certainly make sense. League expansion to more teams will be a hard sell when you have teams struggling to sell out playoff games, let alone regular season games. Those franchises need to be relocated before expanding the number of teams will get much traction. The owners of the struggling franchises will insist on help in improving their situations before they will get on board with adding more teams. Even their division foes (and other opponents, but especially those who go there every year) have a financial interest in seeing those teams improve their gate receipts through better attendance, which could lead to higher seat prices.

I suspect going to an 18 game schedule, with just 2 or 3 preseason games might be the first significant change. There were concerns going from 12 to 14 games, and from 14 to 16, but it didn't matter in the end. Money ruled, and it will again.

The next round of TV contract discussions will give a lot more indication of where the league intends to go. They openly admitted many years ago that pay-per-view for home viewers was what they wanted to get to. They haven't been quite so open about it, but the NFL network gives them a vehicle for getting there.

[RashanGary]

Minnesota would take a death blow if they stop revenue sharing. It would get us over time, but it would get Minny right now.