It's becoming clear to me

[JDG]

If Ralph wanted to make money, he could sell the team or move them himself.  I have to laugh at people who think he's just trying to squeeze the locals.  If he's staying in Buffalo, it's not for the riches.

 

PTR

656899[/snapback]

 

Indeed, especially at his age, the tens of millions of dollars in profit, or whatever he takes in each year, pale in comparison to the hundreds of millions he could reap by "cashing out".

 

JDG

[MadBuffaloDisease]

the bills had a 21% profit rate in 04. i suspect it was about the same or a tiny bit higher in 05 given national revenue sharing going up slightly and the bills payroll remaining about the same. the bills payroll in real dollars (i.e., factoring in bonuses paid for 06; not the official salary cap number) has declined since last year, and the new tv deal will shower a ton of money on the bills over the next few years. if the bills want to maintain a high profit rate, it should be quite easy for them to do - run the team like the bengals of the late 90s (low overhead costs and low player salaries, relatively speaking). from the looks of things, this looks to be exactly what the bills are now doing - not getting into bidding wars for marquee players, shedding big contracts, and paying very little to the coaches and gms (relatively speaking).

It doesn't matter that the TV money will be going-up every year, because so too will the salary cap. But BEYOND the TV money (and tix and merchandise sales), the cap ALSO increases based on "local" revenue that not all teams share equally. So that nice $36M profit Ralph made 2 years ago becomes $26.5M this year, based on the $9.5M increase in the salary cap because of a new CBA. And in the future, the profit probably continues to shrink as more teams generate more local revenue, driving the cap up further.

 

Ralph's best solution is to jack-up ticket, parking, and concessions prices. But how many fans would that drive away? It's certainly better than sticking the state/taxpayer's with a $600M stadium in which prices will be jacked-up anyway.

[Guest BackInDaDay]

... but the true *long-term* future of the Bills is absolutely contingent upon the political leaders of WNY arresting Buffalo's slide down the list of the nation's top metro areas.

657751[/snapback]

Ultimately, yes. This is the root of the problem, after all.

 

Regardless of what motives any of us attribute to Ralph, one thing is certain. In this matter, what's good for Ralph is good for Buffalo, NY. He knows which trees to shake, and he's been shaking them. What comes from it, who knows.

[Kelly the Dog]

It doesn't matter that the TV money will be going-up every year, because so too will the salary cap.  But BEYOND the TV money (and tix and merchandise sales), the cap ALSO increases based on "local" revenue that not all teams share equally.  So that nice $36M profit Ralph made 2 years ago becomes $26.5M this year, based on the $9.5M increase in the salary cap because of a new CBA.  And in the future, the profit probably continues to shrink as more teams generate more local revenue, driving the cap up further.

 

Ralph's best solution is to jack-up ticket, parking, and concessions prices.  But how many fans would that drive away?  It's certainly better than sticking the state/taxpayer's with a $600M stadium in which prices will be jacked-up anyway.

657770[/snapback]

You're ignoring the simply enormous increase the new TV contracts bring in, which doesn't start until this year. In 1990 the contracts were for 900 million. This year it is 3.7 billion. Each team makes more in TV than they pay to their players. Without one ticket or jersey or beer or parking spot or luxury box sold.

[Guest BackInDaDay]

Ralph's best solution is to jack-up ticket, parking, and concessions prices. 

657770[/snapback]

 

No, his best chance at resolving his problems are doing what he's doing.

 

The NFL banged out it's new revenue sharing strategy last month to the degree that it could flesh out a new CBA. At least one aspect of that strategy, yet to be settled, includes the qualifiers that enable the lowest 17 grossing franchises to claim their subsidy from the revenue pool funded by the top 15. Tagliabue has created a commitee to document the particulars. Their decisions are critical to the Bills.

 

If there is any way to pressure the NFL into making decisions favorable to the situation in Buffalo, then Ralph's doing the only thing he can, enlisting the aid of political allies.

 

But as JDG pointed out, the entire region needs bolstering. Ralph's dilema is only a symptom of that.

[Guest BackInDaDay]

You're ignoring the simply enormous increase the new TV contracts bring in, which doesn't start until this year. In 1990 the contracts were for 900 million. This year it is 3.7 billion. Each team makes more in TV than they pay to their players. Without one ticket or jersey or beer or parking spot or luxury box sold.

657812[/snapback]

Bottom line - if Ralph were 67 instead of 87 the Bills could stay in Buffalo, and compete, with the money they're getting from the traditional revenue streams and the newly formed revenue pool. But unless Ralph sells the franchise for well below (probably less than half) the market price, or sells it to an individual (or group) with sentimental ties to the area, why would anyone incur such a large and risky debt in WNY without assurances from the NFL that it will assist in keeping the club economically viable?

[Kelly the Dog]

Bottom line - if Ralph were 67 instead of 87 the Bills could stay in Buffalo, and compete, with the money they're getting from the traditional revenue streams and the newly formed revenue pool.  But unless Ralph sells the franchise for well below (probably less than half) the market price, or sells it to an individual (or group) with sentimental ties to the area, why would anyone incur such a large and risky debt in WNY without assurances from the NFL that it will assist in keeping the club economically viable?

657859[/snapback]

Ralph Wilson is going to sell the team to a guy or woman or group of investors who have the same values as he does, and will keep the team in Buffalo. There are not a lot of choices because there are not a lot of guys with that kind of cash. But he will, and they are out there. Like Galisano. There are other people that would come in that simply want to own an NFL team. Ralph would consider them IF there was a legal commitment to keep them in Buffalo. That would have to be part of the deal. The NFL is not going to allow Ralph to sell the team for a lot less than market value, but they cannot and will not stop him from selling to the person of his choice (Golisano) if that person is going to keep the team in Buffalo. And that is very, very, very likely what is going to happen.

 

What Ralph is doing now is great. But he is not going to get support right now from other owners, and he cannot tell the truth about his finances because they don't fit his argument. He's going to claim poverty and inability to compete whether it is true or not because that is his only possibility. He's trying to do the right thing to get the best deal for the Bills and the city that he adopted and has adopted him. But his is going to make a ton of money this year in pure profit on the Bills. Probably over 30 million.

[JDG]

You're ignoring the simply enormous increase the new TV contracts bring in, which doesn't start until this year. In 1990 the contracts were for 900 million. This year it is 3.7 billion. Each team makes more in TV than they pay to their players. Without one ticket or jersey or beer or parking spot or luxury box sold.

657812[/snapback]

 

Kelly, what MBD was pointing out is that that is no longer any guarantee to be true. The Redskins brought in almost $100 million more in revenue than the Bills did in 2004, $245 mil to $154mil. Incredibly, that $154 million is about the same as the NY Giants and Jets. With new stadiums for them, the Giants and Jets should definitely soon be shooting up into Redskins territory. The Arizona Cardinals, who are currently last in the NFL in revenue, could also quickly move up the ranks with a new Stadium and a few winning seasons.

 

If the Bills spend to the salary cap, the Bills would be spending 66% of their 2004 revenues. Of course, that doesn't count the amount of "cash over cap" that must be spent each year on signing bonuses, nor does it count coaches, administrators, scouts, and other support staff. It also doesn't count investment in training equipment, video material, and other material needs.

 

With teams like the Giants, Jets, and Cardinals poised to move up the revenue rankings, all of that is going to increase the salary cap even further - and apparently it may increase the salary cap without necessarily producing much additional shared revenue per year. According to USA Today, even a best-case scenario under the revenue sharing arrangement Ralph Wilson voted against, the best a team could hope for would be about $9 or $10 million per year. When the gap in franchise revenues is $100 million, Ralph Wilson may be right in thinking that that is not quite enough. And of course, as has come out this weekend, the Bills might not even be getting that under the "qualifyers."

 

JDG

 

P.S. The Redskins' 2004 revenue was $245 million, and #2 was Dallas at $205 million. The Redskins and Cowboys are clearly working hard at building revenue, even if they do have a bigger market to work with than Buffalo.

[plenzmd1]

Thats bad estate planning. They should have trust funds set up etc. No reason to pay estate taxes.

657110[/snapback]

 

Little more complicated than that. As I understand it, and only in laymans terms, if Ralph leaves the team to his wife, absolutlely no tax due( A generation). However, when his wife dies, then the death tax comes into play(B generation). If left in a trust, then the trust must sell to the highest bidder, as was the case when John Kent Cooke left the Skins in a charitable trust, expecting that his kid would get the team, but ole Danny Boy( and someone else as well) forced the issue and bid the price higher than Cookes kid could pay.

 

But could the trust keep the team? That i do not know, and I think we need an estate lawyer to flesh that out.

 

Someone else mentioned poison pill leases, and I think that could be done. Only problem with that is it limits Ralphs options as well, and I think he would be silly to lock into a long term lease. I personally would love to see it, but I just do not see any advantage it gives to the team or Ralph.

 

Also, Ralph in no way, or his trust or his executor, will allow this team to simply be put onto mothballs. You are talking about an asset closing in on .75 billion in worth, and even to to the ultra wealthy, thats a good chunck of change.

[JDG]

Ralph Wilson is going to sell the team to a guy or woman or group of investors who have the same values as he does, and will keep the team in Buffalo. There are not a lot of choices because there are not a lot of guys with that kind of cash. But he will, and they are out there. Like Galisano. There are other people that would come in that simply want to own an NFL team. Ralph would consider them IF there was a legal commitment to keep them in Buffalo. That would have to be part of the deal. The NFL is not going to allow Ralph to sell the team for a lot less than market value, but they cannot and will not stop him from selling to the person of his choice (Golisano) if that person is going to keep the team in Buffalo. And that is very, very, very likely what is going to happen.

657892[/snapback]

 

Kelly,

 

The value of the Bills in 2004 was $700 million according to Forbes. The Redskins were worth $1.2 billion in the same year.

 

So, let's say that Ralph Wilson goes to the big AFL in the sky, and his estate is selling the Bills in order to pay the massive capital gains and inheritance taxes. Tom Golisano partners with Danny Wegman and Jim Kelly as minority partners to pony up the $700 million in fair market value for the Bills. Now, let's say that some Los Angeles billionaire looks at the Bills, looks at market size that is several times the size of the combined Buffalo-Rochester-whatever metro area, looks at market that contains no less than 15 Fortune 500 companies, and says that the Bills would be worth $1.1 billion in Los Angeles, and offers a comparable amount? What then? Does Ralph Wilson's estate turn down $400 million dollars? Does the NFL allow Ralph Wilson's estate to do so?

 

And the gap is only continuing to widen.....

 

JDG

[Kelly the Dog]

Kelly, what MBD was pointing out is that that is no longer any guarantee to be true.    The Redskins brought in almost $100 million more in revenue than the Bills did in 2004, $245 mil to $154mil.  Incredibly, that $154 million is about the same as the NY Giants and Jets.  With new stadiums for them, the Giants and Jets should definitely soon be shooting up into Redskins territory.  The Arizona Cardinals, who are currently last in the NFL in revenue, could also quickly move up the ranks with a new Stadium and a few winning seasons. 

 

If the Bills spend to the salary cap, the Bills would be spending 66% of their 2004 revenues.  Of course, that doesn't count the amount of "cash over cap" that must be spent each year on signing bonuses, nor does it count coaches, administrators, scouts, and other support staff.    It also doesn't count investment in training equipment, video material, and other material needs.   

 

With teams like the Giants, Jets, and Cardinals poised to move up the revenue rankings, all of that is going to increase the salary cap even further - and apparently it may increase the salary cap without necessarily producing much additional shared revenue per year.  According to USA Today, even a best-case scenario under the revenue sharing arrangement Ralph Wilson voted against, the best a team could hope for would be about $9 or $10 million per year.  When the gap in franchise revenues is $100 million, Ralph Wilson may be right in thinking that that is not quite enough.  And of course, as has come out this weekend, the Bills might not even be getting that under the "qualifyers."

 

JDG

 

P.S. The Redskins' 2004 revenue was $245 million, and #2 was Dallas at $205 million.  The Redskins and Cowboys are clearly working hard at building revenue, even if they do have a bigger market to work with than Buffalo.

657918[/snapback]

No, this is the first year this is true. Because this is the first year of the new contracts. This is the first year that the TV money is bigger for each team than the salary cap itself. The Redskins can MAKE a lot more money than the Bills, that is their right. The only question is whether or not it makes an unfair playing field. Ralph is outright lying when he says he cannot pay these signing bonuses. He surely can. And what Daniel Snyder does, which Ralph doesn't, but no one here seems to want to acknowledge, is that he pays the money up front. But the monies that he pays in salaries are actually less than all or most other teams. So Daniel snyder is paying way less than Ralph during the season because he has already paid it in cash. But the amount Snyder spends is capped. That's why they call it a cap. Because you can't go higher. He may spend 120 mil in cash one year but then only pay 80 the next, even though the cap is 100 mil. But this year is the first year that it's impossible to lose money.

[JDG]

No, this is the first year this is true. Because this is the first year of the new contracts. This is the first year that the TV money is bigger for each team than the salary cap itself.

 

I seem to remember sitting in my room in Cleveland, watching Bob Costas point out that Art Modell was receiving more in TV money than the amount of the salary cap. So I don't believe that the above is accurate.

 

 

The Redskins can MAKE a lot more money than the Bills, that is their right. The only question is whether or not it makes an unfair playing field. Ralph is outright lying when he says he cannot pay these signing bonuses. He surely can. And what Daniel Snyder does, which Ralph doesn't, but no one here seems to want to acknowledge, is that he pays the money up front. But the monies that he pays in salaries are actually less than all or most other teams. So Daniel snyder is paying way less than Ralph during the season because he has already paid it in cash. But the amount Snyder spends is capped. That's why they call it a cap. Because you can't go higher. He may spend 120 mil in cash one year but then only pay 80 the next, even though the cap is 100 mil. But this year is the first year that it's impossible to lose money.

657949[/snapback]

 

What you neglect is that given an assumption of increasing revenues (and thus an increasing cap), the actual "spending cap" for a given year, over the long term, is a percentage higher than the actual salary cap.

 

In any event, as the Reskins, Cowboys, Giants, and Jets make more money than the Bills, that revenue is going to push the salary cap higher. I wouldn't count on the TV revenue being enough to cover player costs (let alone coaching, scouting, and equipment) forever.

 

JDG

[Kelly the Dog]

Kelly,

 

The value of the Bills in 2004 was $700 million according to Forbes.  The Redskins were worth $1.2 billion in the same year.

 

So, let's say that Ralph Wilson goes to the big AFL in the sky, and his estate is selling the Bills in order to pay the massive capital gains and inheritance taxes.  Tom Golisano partners with Danny Wegman and Jim Kelly as minority partners to pony up the $700 million in fair market value for the Bills.    Now, let's say that some Los Angeles billionaire looks at the Bills, looks at market size that is several times the size of the combined Buffalo-Rochester-whatever metro area, looks at market that contains no less than 15 Fortune 500 companies, and says that the Bills would be worth $1.1 billion in Los Angeles, and offers a comparable amount?    What then?    Does Ralph Wilson's estate turn down $400 million dollars?    Does the NFL allow Ralph Wilson's estate to do so?

 

And the gap is only continuing to widen.....

 

JDG

657938[/snapback]

That cannot happen with the way the monies work. That person would have to own the stadium in LA and he won't. The Redskins are worth the money because of the stadium and the team. That is what added the extra 400 million.

[Guest BackInDaDay]

Ralph Wilson is going to sell the team to a guy or woman or group of investors who have the same values as he does, and will keep the team in Buffalo. There are not a lot of choices because there are not a lot of guys with that kind of cash.

657892[/snapback]

 

Dude, no offense, but are you aware how naive this sounds?

[Kelly the Dog]

Dude, no offense, but are you aware how naive this sounds?

658009[/snapback]

Maybe I didnt explain or articulate it well. I meant the same values as keeping the team in Buffalo. That is what Ralph wants. He is not going to want to just make the most money. He is going to want to keep his legacy going. He has said it a million times. Everything he has ever done publicly has backed this up. He said it before and is saying it now. And it would make zero sense if he didn't do it.

[Guest BackInDaDay]

No, this is the first year this is true. Because this is the first year of the new contracts. This is the first year that the TV money is bigger for each team than the salary cap itself. The Redskins can MAKE a lot more money than the Bills, that is their right. The only question is whether or not it makes an unfair playing field. Ralph is outright lying when he says he cannot pay these signing bonuses. He surely can. And what Daniel Snyder does, which Ralph doesn't, but no one here seems to want to acknowledge, is that he pays the money up front. But the monies that he pays in salaries are actually less than all or most other teams. So Daniel snyder is paying way less than Ralph during the season because he has already paid it in cash. But the amount Snyder spends is capped. That's why they call it a cap. Because you can't go higher. He may spend 120 mil in cash one year but then only pay 80 the next, even though the cap is 100 mil. But this year is the first year that it's impossible to lose money.

657949[/snapback]

The '05 cap was based on the league's Defined Gross Revenue (primarily the TV revenue) multiplied by the player's percentage as defined in the CBA (65.5%), then divided by 32. The 2005 cap of $85M was basically 65.5% of each teams shared revenue. For the Bills, who have little other than this, that means they could pocket around $40M, even if they spent to the cap. Like I said, this is about the Bills' new owner, not their current status. The new owner will be $700M in the hole, with a rapidly rising cap based on revenue he can't recover.

[Gavin in Va Beach]

No, this is the first year this is true. Because this is the first year of the new contracts. This is the first year that the TV money is bigger for each team than the salary cap itself. The Redskins can MAKE a lot more money than the Bills, that is their right. The only question is whether or not it makes an unfair playing field. Ralph is outright lying when he says he cannot pay these signing bonuses. He surely can. And what Daniel Snyder does, which Ralph doesn't, but no one here seems to want to acknowledge, is that he pays the money up front. But the monies that he pays in salaries are actually less than all or most other teams. So Daniel snyder is paying way less than Ralph during the season because he has already paid it in cash. But the amount Snyder spends is capped. That's why they call it a cap. Because you can't go higher. He may spend 120 mil in cash one year but then only pay 80 the next, even though the cap is 100 mil. But this year is the first year that it's impossible to lose money.

657949[/snapback]

 

How does all the debt Snyder incurred buying the Redskins factor into all of this, if it does at all?

[Guest BackInDaDay]

Maybe I didnt explain or articulate it well. I meant the same values as keeping the team in Buffalo. That is what Ralph wants. He is not going to want to just make the most money. He is going to want to keep his legacy going. He has said it a million times. Everything he has ever done publicly has backed this up. He said it before and is saying it now. And it would make zero sense if he didn't do it.

658033[/snapback]

OK, I agree with that. I've got the same vibe from the old guy, that this means alot to him. But I can't get too optimistic over anyone with the kind of money it's gonna take, being crazy enough to invest it the Bills under the current circumstances. The circumstances have to change. A good start would be having that NFL commitee feel the need to rule favorably on the Bills behalf. Maybe that goat VABills was saving for TD could find it's way into a certain Washington,DC bedroom one night.

[Kelly the Dog]

The '05 cap was based on the league's Defined Gross Revenue (primarily the TV revenue) multiplied by the player's percentage as defined in the CBA (65.5%), then divided by 32.  The 2005 cap of $85M was basically 65.5% of each teams shared revenue.  For the Bills, who have little other than this, that means they could pocket around $40M, even if they spent to the cap.  Like I said, this is about the Bills' new owner, not their current status.  The new owner will be $700M in the hole, with a rapidly rising cap based on revenue he can't recover.

658051[/snapback]

He can recover and he will recover. The TV money goes up, too. This is before one ticket is sold, and remember the league splits it 60/40 with the home and away team. This doesn't inlclude parking or concessions or the billions in merchandising or TV deals or radio deals or luxury boxes. The Bills are still, in the future, going to be able to take in tens and tens of millions each year more than they pay out. I am not complaining about what Ralph is doing. I think he is doing precisely the right thing. And the gap is growing bigger between the higher and lower teams. But what isn't the case is the Bills not being able to compete, and not being able to pay high salaries and pay high bonuses and make a profit. They will.

 

And again, these 32 guys are not just in it to make money. if they were, the NFL would be one of the very worst places to put your 700 million. You wouldn't ever lose it because there is always another billionaire who wants in. But if you want to make as many millions as you can over your billion dollars, the NFL is a crappy place to be. These guys are in it for the ego and fun and being in the best, most exlusive club in the world.

[Kelly the Dog]

How does all the debt Snyder incurred buying the Redskins factor into all of this, if it does at all?

658055[/snapback]

Snyder incurred a ton of debt but he is raking in 100 million a year in profit because of adding seats to the stadium, charging outrageous rights and fees to people who are willing to pay it. So he can pay off his debt.