What is a fair profit for an NFL owner?

[pbmax]

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."

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.

[Patler]

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 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.

[Lurker64]

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.

[mraynrand]

... rather than wallpapering the bathroom with $50 bills.

Adam Jones approves this move. He would also like three bathrooms - Men, Women, and Minxx.

[Brandon494]

The players and those who side with them have argued that owners make too much money from the players work.

What is a fair profit for an average NFL owner?
Keep in mind the following:

The highest paid NFL players on a per-year-average are just under $20 M. It is expected that with the next round of QB contracts this will easily reach $20-$25 million.

It is expected that within three years the average NFL salary will be almost $3 M/year.

Owners building new stadiums are investing hundreds of millions on top of the hundreds of millions already invested in their teams.

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.

[Tarlam!]

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.

[Patler]

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.

Didn't Jones end up paying almost three times as much as the taxpayers? I think Arlington paid $350 million, and Jones something like $900+ million.

I believe the Giants and Jets paid the entire cost, or at least most of it, with no taxpayer input.

[BobDobbs]

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.

[ThunderDan]

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.

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.

[SkinBasket]

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.

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?

[bobblehead]

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.

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

[pbmax]

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

The owners have probably offered to let a 3rd party look at some numbers, not the actual numbers behind the summaries. No one seems to know which numbers they were, but its clear it wasn't the full picture.

[pbmax]

Didn't Jones end up paying almost three times as much as the taxpayers? I think Arlington paid $350 million, and Jones something like $900+ million.

I believe the Giants and Jets paid the entire cost, or at least most of it, with no taxpayer input.

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.

[Patler]

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?

[Guiness]

2 points. The owners offered to let a third party examine actual numbers. They might even choose you if you can be trusted not to leak it to the press. What are the odds the NFLPA would not leak it to the press if they were given the information?

About 0%. I expect if the owner's opened up their books to the NFLPA itself, I would fully expect to see the Dallas Cowboy's general ledger being tweeted, one entry at a time, from the bathroom in the hallway outside the meeting room.