CBA News: Heating Up 1/19/2011

[riddel]

The articles above reference whether the NFL is making more money or not and that really isn't in question. That is a given. And player's salaries are not being reduced. The league wants to reduce the percentage of gross revenue from 60% back to closer to 55%. So the owners want to make more but the reality is that if the league makes more so will the players. Players salaries are tied to the cap which represents right now 60% of the amount of money made by the league as a whole. Owners are saying that they want to make closer to 45% of the toal since they have to fund costs like renovating rebuilding stadiums and other factors. The idea of players paying capital costs for building was floated as an arguing point but won't be adopted.

If an owner purchased a franchise for lets say 400 million dollars and is getting back in profit 25 million a year that is a return on investment of 6%. There are very few people who will purchase a business with such a small profit margin. The whole net worth argument sounds good on the surface but isn't realized unless you sell. How many owners actually sell? I don't know the statistics but has anybody sold and got close to billion dollars for their franchise? The truth is most owners made their money elsewhere and continue to do so. Football franchises are bought for the glamour and prestige of owning one not profit machines.

edited. Kraft paid $172 million for Patriots. The team is worth $1.2 billion today. I was dead wrong about the TV contract money, but the NFL did report it's largest increase in the salary cap in 2009, which was $12 million, indicating that profits are on the rise.

[panthers55]

You're on crack. NFL owners are making bank. The figure is $33 million in sales, which doesn't included TV contracts, endorsements and advertising. I'd dare say the owners are pulling in $200 million per year easily. The TV contracts are an estimated $125 million, which is a guaranteed $4 billion to 32 NFL owners for ONE YEAR!!!! Please get a clue!

That figure was 33 million in operating profits before taxes, depreciation, and the rest. That does include TV money, merchandising, stadium operations and the whole shebang. TV contracts, beer contracts etc are negotiated by the league and distributed equally to the teams. And that number is inflated by teams like Kraft, Jones and some other enterprises that are very lucrative. Most teams make less than that.

Operating profit includes all income after expenses and before taxes. After you include taxes.depreciation etc you have net profit. You appear to be the one that knows nothing about finance and basic terminology.

[tondi]

That figure was 33 million in operating profits before taxes, depreciation, and the rest. That does include TV money, merchandising, stadium operations and the whole shebang. TV contracts, beer contracts etc are negotiated by the league and distributed equally to the teams. And that number is inflated by teams like Kraft, Jones and some other enterprises that are very lucrative. Most teams make less than that.

Operating profit includes all income after expenses and before taxes. After you include taxes.depreciation etc you have net profit. You appear to be the one that knows nothing about finance and basic terminology.

Wow. You really made that guy look like a moron. Of course, he sounds like a 12 year old so that's not saying much.

[riddel]

Wow. You really made that guy look like a moron. Of course, he sounds like a 12 year old so that's not saying much.

Yes he did. Although the $33 million is an average valuation per NFL team by Forbes and appears to be light it does supposedly include everything, minus taxes depreciation and the "rest". panthers55 is not smoking crack. I read guaranteed TV money and didn't realize that it was included in the 2010 valuation. If the NFL doesn't play a game the money is guaranteed and the players have no claim to the money, because the CBA is no longer valid, but I'm sure the lawsuits from the TV companies would be enormous.

Owners won't open the books. The NFL made an estimated $9 billion in revenues for 2010, this info was obtained by the players union, which leaves $281,250 million per team depending on the team. I don't believe $33 million is the average number, it would be a lot easier if the owners would simply open the books. Washington shows $100 million per year and New Orleans is reportedly losing $4 million per year. That's pretty crazy if that's true.

So. Lesson is. I'm a moron that doesn't read. Thanks for reading.

[panthers55]

He made me look like a moron by leaving out the TV contract, which equates to $125 million guaranteed TV money, plus sponsors and advertising money, which I guestimate around $45 million per year depending on the teams market (Dallas more, Tampa less)? His point was that the $33 million in operating revenue is before taxes, depreciation and the "rest" (very indepth) How exactly does that make me look like a moron, when he acknowledged that (TV money, merchandising, stadium operations and the whole shebang. TV contracts, beer contracts etc) are not included in that $33 million? Should we go ahead and remove taxes, agent commissions, expenses and the "rest" from the player salaries, so we are comparing apples to apples? The point is still valid, the owners are clearing around $200 million a year.

Maybe you're the moron, that can't read.

Show me a link since you posted other articles which shows the average football team makes 200 million a year.

I am not going to go back and forth with you since you obviously have an agenda and are arguing without a sound basis. But trust me that TV contracts, beer contracts, and stadium costs are already included in the 33 million.

You made the assertion of 200 million. That flies in the face of the articles you presented earlier. They reported the 33 million figure and operating profit is the amount the franchise makes typically called EBITDA. Earning before interest, taxes, depreciation and amortization.

Earnings include gross profit minus all operating expenses.

[riddel]

The league wants to reduce the percentage of gross revenue from 60% back to closer to 55%.

Reports show that the NFL earns $9 billion per year. Why should the players take less when the league is prospering? Why won't the owners open the books? Why shouldn't the players earn 60% and the owners 40%?

Players salaries are tied to the cap which represents right now 60% of the amount of money made by the league as a whole

The salary cap increases every year and in 2008-2009 the largest increase ever was reported at $12 million. You're correct, the cap does represent the amount of money made by the league, so they are making more money than EVER right now. Why shouldn't the players be a part of that prosperity?

Owners are saying that they want to make closer to 45% of the toal since they have to fund costs like renovating rebuilding stadiums and other factors.

Cost of doing business. The fact is naming rights and sponsors help absorb some of that cost and sponsors are lined up around the globe waiting to get in on the NFL. Some stadiums are actually subsidized by the city they reside in, which is total crap. Then there are the PSL stadiums that lock in fans and secure sales. Those stadiums simply raise the ticket cost to cover these expenses. Again, why is this the players problem?

If an owner purchased a franchise for lets say 400 million dollars and is getting back in profit 25 million a year that is a return on investment of 6%

Why is this number really being used to represent the owners profits? You know that the owners are pulling in more with the $4 billion in TV contracts, so why are you trying to mislead people with the 6% figure? Kraft bought the patriots for $172 million and the franchise is worth around $1.2 BILLION.

The whole net worth argument sounds good on the surface but isn't realized unless you sell.

A billion dollar investment is a billion dollar investment whether you sell or not. It's money in the bank. As long as the owners don't do anything to screw up the NFL product, then their investment is sound. The fact that NFL owners rarely sale, goes to show you exactly how much money they are making. The NFL revenues last year were estimated at $9 billion. Thats $281,250,000 per team (Dallas at the high end, Detriot at the low end) It's the owner's job to manage operating costs. These costs can be offset through sponsors, naming rights, state funding, ticket costs and God knows what else the owners have figured out. If they do it correctly, then they make great money. If the owners don't open the books and Forbes reports estimated operating income, then you know the owners are leaving tons of money off of that estimate. How much do you think Madden pays the NFL owners for their logo? The players don't receive a dime. If you stop and think about how much revenue comes to the NFL that would not be represented in Forbe's operating income, then you understand why the owners won't open the books. Who knows what these guys are really making? Guestimates show between operating income around $100 million for Washington, but the average looks closer to $50 million per team,per Forbes. That's what the guestimates are showing. Who knows other than the owners? $125 million per owner for TV contracts is a lot of money and when you start adding it all up, $281,250,000 per team seems way light.

The truth is most owners made their money elsewhere and continue to do so. Football franchises are bought for the glamour and prestige of owning one not profit machines

If the NFL owners were not making money, then they would open the books. They're not stupid. They know that if they open the books the world will see. The NFL is one of the top brands in the US and has an enormous global following. NFL 2010 = 9 billion dollars. That's not chump change.

[riddel]

Show me a link since you posted other articles which shows the average football team makes 200 million a year.

You're right. That's heavy, but it's not $33 million. I guess that's really the magical question. How much are they really making?

[riddel]

QUOTE=panthers55;2926809] I am not going to go back and forth with you since you obviously have an agenda and are arguing without a sound basis.

[riddel]

I am not going to go back and forth with you since you obviously have an agenda and are arguing without a sound basis.

:iagree:

[panthers55]

You're right. That's heavy, but it's not $33 million. I guess that's really the magical question. How much are they really making?

33 million is probably pretty accurate. Some franchises make closer to 100 million and some are making closer to 5 or 6. If you want to get a rough estimate of what each team gets in revenue just take the cap in 2009 which was 129 million just set up this proportion:

129 = X

60 100

This assumes the cap represent 60% of the gross revenue that each team reports to the league office which would be the player's share. The result is around 215,000,000 gross income. Out of that comes salaries which for the Panthers in 2010 was around 112 million, and the myriad of other expenses. So honestly I think around 33 million is right.

Could teams have other revenue streams like bowl games, concerts, etc. I would think so but it would likely represent no more than 10-15 million per year.

[Kevin Greene]

“We should have a deal,” Rooney said Friday, speaking at Steelers headquarters to three reporters who cover the league on a national basis. “We should not let the disruption of next season happen because of a lockout, a strike, or whatever… It’s in everybody’s best interest to get a deal. The players, of course, want to play, and that’s what should happen.

“The games this year couldn’t be better. The ratings are high? So why would you step back?”

However, Rooney, who now serves as U.S. Ambassador to Ireland, said owners are united in their determination to scrap the current collective-bargaining agreement, which expires in March.

“Status quo is not an option,” he said. “I just believe that [the opposing sides] could work out an agreement. There are points that could make this deal better for everyone.”

Rooney declined to address specifics of the talks, saying he wanted to leave those to the negotiators, but he expressed frustration at the glacial pace of the process.

His were the strongest-worded remarks on the issue from a team owner in months.

“I just think the negotiators should get it together and start doing what they should do, and get a deal,” he said, adding, “If they sit down and work things out, I think they could have a deal rather quickly.”

Rooney said the CBA over the years has gotten “a little too rich on one side” –- meaning the players’ side -– and indicated an agreement might have been reached sooner but for the 2008 death of Gene Upshaw, the former executive director of the NFL Players Assn.

“I think if Gene Upshaw were here, he’s someone I could talk to about this,” he said. “He’s someone who was for the game at all the time.”

Asked whether the owners’ lack of familiarity with current union head DeMaurice Smith has led to “a distrust” that’s complicating negotiations, Rooney said: “I don’t know the personalities. There is maybe distrust. Maybe dislike is a better word. But that’s beyond. You have a situation like this, you’ve got to get a deal. You’ve got to forget personalities.”

Wow.

http://latimesblogs.latimes.com/sports_blog/2011/01/pittsburgh-steelers-dan-rooney-is-concerned-about-lack-of-progress-in-nfl-labor-negotiations.html