Have you worked for a privately held employer?

[gbgary]

It is still their businesses and should not have to open the books to these moronic players.

never said they did.

[gbgary]

This is a good point. Too much of my money is going to make rich men richer. If they're gonna cry about money, let's see what they're crying about.

all of your/our money is going on making the rich richer. everything you spend your money on, in the end, is owned, or controlled, by someone rich.

[Noodle]

If a party in negotiation says "I can't pay you what you're asking," then they have opened the door to the very reasonable response of "oh really, well, show me your books." How can anyone really question this? Are you suggesting that the other side negotiate from ignorance?

I really can't understand why folks would side with the owners without knowing their financial situation. We all know what the players -- you know, the folks who go out there, risk their health, and provide the product that we all enjoy -- make. Why shouldn't we know what the owners make? I'm not against the owners necessarily, but I have a big problem with anyone who sets out a negotiating position and then refuses access to information to determine whether the position is BS.

Can someone tell me how this makes sense?

[SkinBasket]

Can someone tell me how this makes sense?

Because what the owners are claiming is backed up by the one public example available, the Green Bay Packers, who have shown an increase in gross profit but a steady decline in profit margin since the last CBA. The players have no such counter-example.

The owners also have a vested interest in keeping how they run their business private, as they are still competing against the rest of the league, other sports teams, and general entertainment enterprises to make a profit. Those of you arguing that any employer/employee contract negotiation opens the door for a complete revelation of the business practices of the employer are ridiculously naive or retarded. How about if the owners require a complete dollar-for-dollar account of how each of the players have spent and/or invested their earnings for the duration of the previous CBA? Let's see just how downtrodden these poor folk be.

I also love how people want to vilify the owners as "rich" while ignoring just how much fucking money the players make. Everyone in the game is rich, so find a real argument.

[pbmax]

I have worked for two privately held companies and in each case, we went over the quarterly financial statements as a group. We focused on profit and loss statements for units and not as much time on the entire balance sheet or cash flow, but those numbers would have been easy to come by through a simple aggregation. We did not review tax records, so our knowledge would be more limited than a complete public disclosure.

The NFL would be subject to anti-trust laws without a CBA. Taken to an extreme, that litigation will expose their numbers again (as it did in 1991) if they follow the decertification path. Players already have revenue data, costs other than players are the missing piece.

Are the players entitled to it? Legally no, unless they can prove in court that the league is making a strictly bottom line argument (as opposed to say market wage argument for a specific job function). But the league will likely end up exposing the numbers either way. Saying no now is simply delaying in hope to break the players prior to litigation succeeding.

Personally, if my city was asked to provide public funds for the building they play in, a facility that then can be only used by a single major tenant, I would want their numbers. Especially when the teams are so busying trumpeting how much they plan to contribute to the plan, and then profit handsomely off stadium revenue streams.

[pbmax]

Because what the owners are claiming is backed up by the one public example available, the Green Bay Packers, who have shown an increase in gross profit but a steady decline in profit margin since the last CBA. The players have no such counter-example.

The owners also have a vested interest in keeping how they run their business private, as they are still competing against the rest of the league, other sports teams, and general entertainment enterprises to make a profit. Those of you arguing that any employer/employee contract negotiation opens the door for a complete revelation of the business practices of the employer are ridiculously naive or retarded. How about if the owners require a complete dollar-for-dollar account of how each of the players have spent and/or invested their earnings for the duration of the previous CBA? Let's see just how downtrodden these poor folk be.

I also love how people want to vilify the owners as "rich" while ignoring just how much fucking money the players make. Everyone in the game is rich, so find a real argument.

A billionaire who finds himself a simple millionaire would no longer think of himself as rich, if they ever did to begin with. Its a matter of perspective from both sides.

And the Packers have seen a decline in profit margin in part because of declining investment returns, not just player cost escalation. That return is highly variable and for the previous two reporting periods, was at a very low ebb like many equity portfolios. The owners proposal has no mechanism to return to a different level of compensation once those investments turn around. Its part of a conveniently timed argument similar to concern over interest rates on their construction loans. This was a key argument of the owners in 2008-09 until the interest rates returned to a semblance of normality after the banking crisis.

One other note about the Packers financial statements: the Packers maintain a rainy day fund that at one point was well north of $100 million dollars. The precise nature of the assets is unknown to me, but as a rainy day fund, it must be close to liquid. The original idea was to guard against an interruption in normal business operations such as the suspension of revenue sharing, TV contracts or other financial catastrophe (possibly CBA related). Harlan's goal was to have one year's worth of cash on hand for expenses. If the Packers were a true public company, sharks would be circling to either buy in and force dividends or leverage a purchase of the business and crack open that piggy bank. No serious argument can be made that the Packer are in financial difficulty. Without continued deposits in that rainy day fund, there would be no concern over the profit margin.

But this post also misses a key point: Owners do not aggregate wealth simply by the cash profit their team reaps. NFL franchises return value to their owners based on the total worth of the club. And that picture is why there is legitimate concern, at least for the present. Forbes has been tracking franchise values since 1998. And 2009 was the first year the franchise values showed no growth. And 2010 was the first year of decline. Given the economy, those are likely aberrations that will reverse as the economy recovers. But the NFL has a relatively significant group of owners who purchased recently (bought high, as it were). And between that debt pressure AND local revenue sharing which was part of the 2006 CBA, owners wish to push player costs down significantly.

But again, despite the truth of numbers, if the franchise values (and investments) return to previous gains, the NFL has yet to signal that it would return to a model resembling the one in place now. And it is that reality, that each side simply wants as much blood as it can draw from the other side, that makes this issue unlikely to be decided except by lockout, lawsuits and imposition of new business rules. If they were truly partners, the league would share the data and they would work out relief for the changed business conditions. However, if I was an owner, I wouldn't trust Smith either. It his first go around and they do not know him like they knew Upshaw.

http://www.forbes.com/2010/08/25/most-valuable-nfl-teams-business-sports-football-valuations-10_land.html

http://www.forbes.com/2009/09/02/nfl-pro-football-business-sportsmoney-football-values-09-values.html

[pbmax]

BTW, let's put the political crap in the other forums. You want to bash or cheer a politician, go get a bumper sticker. Not in the Packer forum. Please.

[Bretsky]

I find it interesting the NFL PA passed up two very good NFL players in Troy Vincent and Trace Armstrong....well respected and well thought of by both players and owners....for the yahoo they have running the show.......who has never played in the NFL.

Does it mean anything ? I think it was intentional. Gene Upshaw was sometimes criticized for having too positive of relationships with the owners.

Players were not going to let this happen again

They chose ugly if their goal was not to get locked out. They chose the hard ass.

[swede]

BTW, let's put the political crap in the other forums. You want to bash or cheer a politician, go get a bumper sticker. Not in the Packer forum. Please.

Yeah. It's not like the President will want to get in on NFL publicity.

[Noodle]

PB, that is some of the most thoughtful analysis I've seen anywhere on this issue. The NFL owners are in situation not unlike the insurance industry a number of years ago,when they blamed their (temporary) poor financial situation on out-of-control litigation, when in fact the real cause of their pain was poor investing and a downturn in equity and real estate markets.

Skin makes a good point about how these guys are in a competitive business and thus need to keep some of their information confidential, but in the end I don't find this convincing. In fact, in a revenue-sharing league like the NFL, the teams really are a collective entity -- the Cowboys don't compete with the Mavs, rather the NFL competes with the NBA (and blows it away). And the real kicker is that a number of the teams play in publicly financed stadiums. If my taxes are covering a significant portion of a team's costs, then the argument that these are private businesses really doesn't move me much.

Anyway, good thinking on both sides of the issue, thanks to Skin and PB. I guess those two can get a room now.

[pbmax]

Yeah. It's not like the President will want to get in on NFL publicity.

If they get to visit the White House, then I will care to see it. Outside of that, no interest. The CBA is bad enough.

Though I will say the virtually unremarked elephant in the room is local revenue sharing. No one is talking about it, but the rumors are its going to either get dumped or significantly reduced. But to afford that, the owners need to move the minimum cap number down to provide relief to low revenue clubs. The upshot would be a greater disparity between teams will emerge.

And that leads us to L.A. Take two relatively strapped teams from Jacksonville and Buffalo (or Cincinnati and Jacksonville) and move them to new stadiums in LA, suddenly the revenue picture brightens. Until both poorly run teams blow through the cash infusion and then move back again.

[prime311]

My take on this is that no matter what the outcome is, the fans will end up paying more.

[ThunderDan]

And the Packers have seen a decline in profit margin in part because of declining investment returns, not just player cost escalation. That return is highly variable and for the previous two reporting periods, was at a very low ebb like many equity portfolios. The owners proposal has no mechanism to return to a different level of compensation once those investments turn around. Its part of a conveniently timed argument similar to concern over interest rates on their construction loans. This was a key argument of the owners in 2008-09 until the interest rates returned to a semblance of normality after the banking crisis.

I think a big push for the CBA will come once the Packers financials are published. With the stock market rebounding over 30% from last year, I think you are going to see a very robust "earnings" from the Packers. Just a feeling, I could be dead wrong.