Decertification

[Happy Panther]

Asset value does not necessarily reflect how a business is performing. It has relevance if you want to sell, or seek financing, but that is about it.

For an excellent example of what can happen to asset value outside one's direct control, just look at the real estate market. Maybe you bought a house for $200 grand, but due to factors beyond your direct control, it now has a value of $75,000.

It's still part of the investment. It would be like saying your stock stinks because it only pays a 2% dividend per year even though the stock has increased 400%. While you have a point that teams aren't bought or sold often, the Richardson family are billionaires now. And if JR really wanted to sell the club he probably could

[Happy Panther]

http://www.cbssports.com/nfl/story/14792619/nfls-pash-says-union-has-enough-financial-data

• audited league-wide profitability data with dollar figures from 2005-09 that wouldn't show information on a club-by-club basis;

• the number of teams that have seen a shift in profitability in that span;

• an independent auditor to examine the data

Despite what others might say, i have an extensive background in reviewing the FS of fortune 500 companies. I have seen literally dozens.

I have also represented the buyer in potential mergers. And I can tell you this: some companies will make huge efforts not to give you the full statements. They will offer you summaries and translations and non-audited spreadsheets etc.

The issue is that unless the "profitability data" is complete you still have no clue how the numbers have been manipulated. A full financial statement is hundreds of pages long and has numerous notes and descriptions of every item. Unless you can trace every transaction you have no idea where money has been hidden, moved or treated in a different way from a tax perspective.

It would be very easy for the NFL to show decreasing profits when the financial situation of the NFL hasn't changed.

Having said that I would need to see what was actually provided to determine if it was satisfactory

[Marguide]

It's still part of the investment. It would be like saying your stock stinks because it only pays a 2% dividend per year even though the stock has increased 400%. While you have a point that teams aren't bought or sold often, the Richardson family are billionaires now. And if JR really wanted to sell the club he probably could

There is a big problem though...if the team is not operating profitably, or even if all trends are headed in that direction, then next year or the year after, you are faced with either selling off some of those assets, or going into debt, to meet your payroll.

Do you think this is the picture of a viable business model?

So just because JR is rich, he should let the team continue on a downward financial spiral until there is nothing left?

[blackcatgrowl]

Despite what others might say, i have an extensive background in reviewing the FS of fortune 500 companies. I have seen literally dozens.

I have also represented the buyer in potential mergers. And I can tell you this: some companies will make huge efforts not to give you the full statements. They will offer you summaries and translations and non-audited spreadsheets etc.

The issue is that unless the "profitability data" is complete you still have no clue how the numbers have been manipulated. A full financial statement is hundreds of pages long and has numerous notes and descriptions of every item. Unless you can trace every transaction you have no idea where money has been hidden, moved or treated in a different way from a tax perspective.

It would be very easy for the NFL to show decreasing profits when the financial situation of the NFL hasn't changed.

Having said that I would need to see what was actually provided to determine if it was satisfactory

This assumes deception on the part of the NFL.

If they are hiding financial data from Independent Auditors involved in a labor negotiation, then they are guilty of a long list of crimes.

I'm not going to assume they would do so, given the amount of money involved.

But then there's this whole point that Teeray made:

The owners wanted to give financial records that fell within the current CBA. The previous 5 years (10 years total) was irrelelevant to the issue of the negotiation. The players don't even want the information they want to get to litigation. The request was outrageous and unnecessary. It was requested purely bc they knew it would be declined and to support their public spin of "just be transparent" so they could save face as they blew up the league and went to court.

This pretty much sums up the whole issue.

[Happy Panther]

So just because JR is rich, he should let the team continue on a downward financial spiral until there is nothing left?

the only documentation i have seen of this is Jerrys goofy pie chart (which i believe is a flat out lie). Forbes says the NFL's financial situation has been improving over the last few years...

The official word from the owners is not that they are losing money or even expect to soon. Its that they want more revenue for future investments that they anticipate and they feel like they signed a deal they could have negotiated more last time. This is reasonable. Recall they opted out of the deal 3 years ago.

If the NFL was really on the brink of losing money then fine, its a bad asset. But I do not believe this at all.

[teeray]

Despite what others might say, i have an extensive background in reviewing the FS of fortune 500 companies. I have seen literally dozens.

I have also represented the buyer in potential mergers. And I can tell you this: some companies will make huge efforts not to give you the full statements. They will offer you summaries and translations and non-audited spreadsheets etc.

The issue is that unless the "profitability data" is complete you still have no clue how the numbers have been manipulated. A full financial statement is hundreds of pages long and has numerous notes and descriptions of every item. Unless you can trace every transaction you have no idea where money has been hidden, moved or treated in a different way from a tax perspective.

It would be very easy for the NFL to show decreasing profits when the financial situation of the NFL hasn't changed.

Having said that I would need to see what was actually provided to determine if it was satisfactory

NFLPA doesn't need 10 years because it is not relevant to the state of the current CBA which is the issue at hand.

It was a BS request in the first place and the NFLPA doesn't need this info to make a deal.

Again, the other thing is, the NFLPA doesn't even want these reports. It was a PR campaign mixed with the larger desire to go to court where they could receive a better deal than they currently have.

Also if a third party firm certifies something like this and it uncovered that it is false the firm itself can be held liable. It would be the burden of the third party firm to perform a thorough audit before it could present it to the NFLPA as factual.

But as soon as we all realize that the players never wanted this info the sooner we will all be better off.

I wonder if by the time the next CBA is done if these records are ever turned over. I bet you they won't be.

[Happy Panther]

If they are hiding financial data from Independent Auditors involved in a labor negotiation, then they are guilty of a long list of crimes.

That's not the issue. Auditors can sign off on various statements in varying degrees. Here they are signing off on "profitability statements." the degree of documentation behind this is not known

For example maybe profit went down from 2008 to 2009 because of a different assumption surrounding deprecation of assets as well as a one time hit to earnings based on a restatement of something from prior years (just making stuff up here). In a full and complete financial statement this would all be transparent.

If a firm is auditing "profitability data" the amount of granularity may be much less than if it were auditing financial statements for a publicly held company

Having done what I have done for a few years now when i see data presented like this:

the number of teams that have seen a shift in profitability in that span;

It raises all sorts of red flags. And why not 10 years like requested?

The right thing to do would have been to jointly hire an independent firm which would recreate full financial statements for each team while tailoring them to redact confidential or sensitive information. The product would be much more complete than what the NFL offered and a select few on the NFLPA would be allowed to see it.

[Marguide]

the only documentation i have seen of this is Jerrys goofy pie chart (which i believe is a flat out lie). Forbes says the NFL's financial situation has been improving over the last few years...

The official word from the owners is not that they are losing money or even expect to soon. Its that they want more revenue for future investments that they anticipate and they feel like they signed a deal they could have negotiated more last time. This is reasonable. Recall they opted out of the deal 3 years ago.

If the NFL was really on the brink of losing money then fine, its a bad asset. But I do not believe this at all.

Valid points. I am just looking at Green Bay's data. If it is representative, there is indeed a problem, and asking for help from the players is justified.

Look, the extra billion owners wanted to exclude from the split was excessive, and of course the players called them on it, as they should. However, some level of give back may be appropriate, and that should be resolved through negotiation.

All indications are that the owners were moving downward on their demands, but the union chose to blow the process up and fight it out in a court of law. That's the indefensible part IMO.

[Happy Panther]

Valid points. I am just looking at Green Bay's data. If it is representative, there is indeed a problem, and asking for help from the players is justified.

I don't have the data in front of me, but the Packers operating profit has been decreasing for 3 years. I bet if you go back through the last 20 years there is always a team that is on the decline and always a team on the rise.

In 2009 there were 2 teams that lost money, and 4 more that made less than 10M operating profit. Also 2 making more than 100M

In 2006 5 teams lost money, 5 were less than 10M and the hughest was 60M. 2009 is clearly better than 2006

In 2007, the last year before the owners opted out, 1 team lost money, only 2 were less than 10M and the highest was 58M. very similar to 2009 excpet the top teams are making way more $$ today

The NFL outlook has not gotten any worse despite the packers woes. And when the owners opted out they were coming off a great collective year.

The whole thing stinks to me

[Jaxel]

That's not the issue. Auditors can sign off on various statements in varying degrees. Here they are signing off on "profitability statements." the degree of documentation behind this is not known

For example maybe profit went down from 2008 to 2009 because of a different assumption surrounding deprecation of assets as well as a one time hit to earnings based on a restatement of something from prior years (just making stuff up here). In a full and complete financial statement this would all be transparent.

If a firm is auditing "profitability data" the amount of granularity may be much less than if it were auditing financial statements for a publicly held company

Having done what I have done for a few years now when i see data presented like this:

It raises all sorts of red flags. And why not 10 years like requested?

The right thing to do would have been to jointly hire an independent firm which would recreate full financial statements for each team while tailoring them to redact confidential or sensitive information. The product would be much more complete than what the NFL offered and a select few on the NFLPA would be allowed to see it.

Regardless of what they see it wouldn't matter, we saw something like this happen in the NBA and MLB and those two sports are now a disaster.

[Marguide]

I don't have the data in front of me, but the Packers operating profit has been decreasing for 3 years. I bet if you go back through the last 20 years there is always a team that is on the decline and always a team on the rise.

In 2009 there were 2 teams that lost money, and 4 more that made less than 10M operating profit. Also 2 making more than 100M

In 2006 5 teams lost money, 5 were less than 10M and the hughest was 60M. 2009 is clearly better than 2006

In 2007, the last year before the owners opted out, 1 team lost money, only 2 were less than 10M and the highest was 58M. very similar to 2009 excpet the top teams are making way more $$ today

The NFL outlook has not gotten any worse despite the packers woes. And when the owners opted out they were coming off a great collective year.

The whole thing stinks to me

Don't you find it ironic that you are quoting profit figures to back up your argument, and yet repeatedly say the NFL must open its books because you don't believe their numbers?

[Anybodyhome]

But the economic crap didn't hit the fan until 2008- the actual year the owners opted out.

And, what if instead of the recession from hell we've been suffering through, what if we were to have experienced economic growth that paralleled nothing we'd ever seen before. Would the players have opted out?

[Happy Panther]

Don't you find it ironic that you are quoting profit figures to back up your argument, and yet repeatedly say the NFL must open its books because you don't believe their numbers?

No I don't. The Forbes numbers are guesses however most of the data you need is publicly available. Salaries, gate receipts TV deals etc.

And the Forbes data should be useful for comparing year to year.

It seems obvious at a high level that the NFL is doing fine if not improving. But you are right i can't be 100% sure.

However Jerry has stated that the NFL is in a 200M negative cash flow position while the latest Forbes data shows hundreds of millions of dollars of profit. More than 200M for the top 2 teams alone

And while the Forbes data may be useful to me for discussion forum purposes, the NFLPA is right to want detailed FS data if it is going to potentially give up hundreds of millions

[Happy Panther]

But the economic crap didn't hit the fan until 2008- the actual year the owners opted out.

And, what if instead of the recession from hell we've been suffering through, what if we were to have experienced economic growth that paralleled nothing we'd ever seen before. Would the players have opted out?

The market crashed in later 2008 while the owners made the decision early 2008 coming off a great year for the NFL (2007) and a decent year for the economy as a whole. the great recession was not obvious when they opted out.