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Profootballtalk.com

 

"NEW OWNERS WON'T BE BARRED FROM REVENUE SHARING

 

A league source with knowledge of the discussions regarding the potential factors that will influence a team's eligibility for supplemental revenue sharing, but who has asked not to be identified due to the sensitivity of the information (sorry, we were just reading Newsweek) has told us that there are no current plans to disqualify new owners of NFL teams from getting an extra piece of the pie.

 

Per the source, the only discussions that have occurred to date regarding supplemental revenue sharing and changes in ownership relate to the extent to which the league would be entitled to recoup past payments made to a low-revenue team whose balance sheet has been artificially enhanced by the subsidies from the pool of traditionally unshared monies into which the teams with the highest revenues will be paying.

 

In other words, if after Ralph Wilson passes his estate attempts to sell the team for, say, $800 million, someone (whether it's Wilson's estate or the buyer) could be required to make a payment back to the league as a reflection of the reality that supplemental revenue sharing has inflated the book value of the team.

 

And this isn't a new concept, we're told.  The notion of the league potentially being reimbursed has been part of the G-3 program, through which the NFL provides money for the construction of stadiums.  If an owner is going to sell the team and the stadium, it's only fair for the league to get back some of the money, since league money has put the owner in position to finagle the final price to be paid.

 

"Fair" is the key word here.  If Ralph Wilson gets extra money for the next five years due to his franchise's financial woes in Western New York, Wilson's estate shouldn't be permitted to keep the additional profit, from the sale of a team that Wilson bought for $25,000, that traces directly to the extra money he has gotten from the supplemental revenue sharing program.

 

It's not clear whether Wilson's claims regarding the disqualification of a new owner from supplement revenue sharing is the result of misinformation, or misrepresentation.  Either way, Wilson's contention is way off base."

 

Is this latest Wilson stink much ado about nothing? Do you think he's trying to trick the needy populace of WNY into another stadium? Or is he just completely off his rocker???? Discuss.

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For once, profootballtalk may be right. I highly, highly doubt the law was written to screw teams like the Bills out of money they need to compete. The law was written to not let teams benefit greatly from monies and supplements they do not or may no longer need. What is very likely the case is somewhat in between this viewpoint and Ralph's viewpoint. I assume one of the Bills lawyers pointed this out to Ralph and he immediately made a stink about it to protect his team. We're lucky he's doing it. But the profootballtalk analysis is probably just as correct. The law was not intended to screw teams and as soon as it is written correctly it should work correctly and not hurt the Bills when Ralph sells them. This is part of the stuff Ralph meant about it not being able to be understood, and the kind of stuff that happens when an agreement has to be reached quickly.

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In other words, if after Ralph Wilson passes his estate attempts to sell the team for, say, $800 million, someone (whether it's Wilson's estate or the buyer) could be required to make a payment back to the league as a reflection of the reality that supplemental revenue sharing has inflated the book value of the team.

 

As usual, Florio's all wet, confusing operating cash flow with asset value (just like the columnist from the Toronto Sun).

 

As I understand it, revenue sharing is a current fiscal year cash flow concept intended to allow small-market teams to stay competitive in FA signing and payroll structure with their large market counterparts. It has no impact on the rate at which franchise value appreciates, other than to help keep the team in operation.

 

If the value of the Bills increases year after year, it's not because of their operating income/expense structure, but rather the scarcity value of being one of only 32 franchises.

 

The economics of being located in a small market doesn't change for a new owner. If anything, having to pay something "back" to the league might reduce the value of the team when it is sold, penalizing small market owners yet again.

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In other words, if after Ralph Wilson passes his estate attempts to sell the team for, say, $800 million, someone (whether it's Wilson's estate or the buyer) could be required to make a payment back to the league as a reflection of the reality that supplemental revenue sharing has inflated the book value of the team.

 

As usual, Florio's all wet, confusing operating cash flow with asset value (just like the columnist from the Toronto Sun). 

 

As I understand it, revenue sharing is a current fiscal year cash flow concept intended to allow small-market teams to stay competitive in FA signing and payroll structure with their large market counterparts.  It has no impact on the rate at which franchise value appreciates, other than to help keep the team in operation. 

 

If the value of the Bills increases year after year, it's not because of their operating income/expense structure, but rather the scarcity value of being one of only 32 franchises. 

 

The economics of being located in a small market doesn't change for a new owner.  If anything, having to pay something "back" to the league might reduce the value of the team when it is sold, penalizing small market owners yet again.

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I don't agree. I think what he means, and what the league means, is that if as a small market owner, Ralph has received help from the league in revenue sharing, and then the new owner buys the team in some kind of bidding war when there are multiple buyers out there that jacks the value of the team up, the new owner may have to pay back some of the money that the league shared. This is highly unlikely in the Bills case. So if the Bills value, which is now at 700 million suddenly sells for 850 million because four different owner groups start outbidding each other, then some return of investment might be required from the league.

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As I understand it, revenue sharing is a current fiscal year cash flow concept intended to allow small-market teams to stay competitive in FA signing and payroll structure with their large market counterparts.   It has no impact on the rate at which franchise value appreciates, other than to help keep the team in operation.  

 

If the value of the Bills increases year after year, it's not because of their operating income/expense structure, but rather the scarcity value of being one of only 32 franchises.  

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But if "current fiscal year cash flow" has no impact on the value of a franchise, why would revenue sharing matter to a new owner? He's still going to get 1 of only 32 franchises available.

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Bills Fan, Red Sox fan, Florio hater??  Are you one of my multiple personalities?

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Possible. How do you respond to these statements:

 

"I get that salty, pre vomit taste in my mouth whenever I see local gossip news pieces on Tom Brady."

 

"The best Buffalo Chicken sandwich in Boston is at ____."

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