Revenue Sharing

[oregonbbfan]

I know there is a revenue sharing meeting coming up next week but I believe there are other ways to even things out. If you were Snyder or Jones who have worked tirelessly/ruthlessly to maximize the dollars they draw, would you want to help someone who isn't willing to make the same effort? Granted, they have lucretive sites and get lots of money from boxes but they leave no stone unturned to bring in more profit. They are also not afraid to spend that profit to get what they think are the best players for their team.

 

Let's say that S&J make over $100 mil over the TV or othere monies that are evenly dispersed amoungst the 32 owners. That gives them, with concessions or parking or whatever is not considered moneyes to be split, a difference that is apprecable, probably in the $80-100 mil for the rich owners who can give it to players in bonuses without going into their own pockets. Now if you were S or J, would you want to subsidize someone not willing ( not saying able ) to maximize revenues?

 

I think there may be another option that I have not seen suggested on this board, and I read it alot. If I did miss it, forgive me. The solution, rather than subsidizing those that cannot or will not make the effort is to put a cap on the dollars a team can spend on bonuses. So if there is a max of , say $50 mil ( this can be any number that is fair ) a year, some teams may not make it to the max but the difference will be less and more fair. Also, the richies will just put the overage in the bank and not feel they are giving their money to someone not willing ( not able ) to spend.

 

With the loophole plugged until another is found, the playing field is again level for those that are willing to try to acquire the best team possible. What's your thoughts, is it too simple?

[obie_wan]

I know there is a revenue sharing meeting coming up next week but I believe there are other ways to even things out. If you were Snyder or Jones who have worked tirelessly/ruthlessly to maximize the dollars they draw, would you want to help someone who isn't willing to make the same effort? Granted, they have lucretive sites and get lots of money from boxes but they leave no stone unturned to bring in more profit. They are also not afraid to spend that profit to get what they think are the best players for their team.

 

Let's say that S&J make over $100 mil over the TV or othere monies that are evenly dispersed amoungst the 32 owners. That gives them, with concessions or parking or whatever is not considered moneyes to be split, a difference that is apprecable, probably in the $80-100 mil for the rich owners who can give it to players in bonuses without going into their own pockets. Now if you were S or J, would you want to subsidize someone not willing ( not saying able ) to maximize revenues?

 

I think there may be another option that I have not seen suggested on this board, and I read it alot. If I did miss it, forgive me. The solution, rather than subsidizing those that cannot or will not make the effort is to put a cap on the dollars a team can spend on bonuses. So if there is a max of , say $50 mil ( this can be any number that is fair ) a year, some teams may not make it to the max but the difference will be less and more fair. Also, the richies will just put the overage in the bank and not feel they are giving their money to someone not willing ( not able ) to spend.

 

With the loophole plugged until another is found, the playing field is again level for those that are willing to try to acquire the best team possible. What's your thoughts, is it too simple?

 

they used to have the answer by not including the local revenues in the cap.

 

However, the NFLPA has a single purpose of increasing salaries for its players, so any change to limit bonuses has no chance.

[MadBuffaloDisease]

The Bills do not have the same population/corporations that Wash and Dallas, or even NE, have. They have never even come CLOSE to selling-out all their season tix, even in the SB years, hence ticket prices remain the lowest in the NFL on average with no chance of increasing them to even average NFL levels.

 

Second of all, Ralph has spent to the cap every year but this one, mainly because of the uncertainty regarding the additional revenue sharing, which STILL hasn't been resolved (but hopefully will on the 23rd, so that Ralph can go back to spending fully under the cap). So he's trying to maximize his team's potential. Maybe he hasn't spent a ton on head coaches, but high-priced coaching doesn't guarantee you anything.

 

Last of all, Jones and Snyder didn't do much to maximize profits other than to jack-up prices, or INSITITUE prices, on things that were previously cheaper or free (training camp). Again it all goes back to the market.

[oregonbbfan]

Like I said, I know Buffalo is one of the teams not able due to the economy, ticket price levels and few boxes. And maybe Wilson spends close to cap ( although if I recall we were $7 or 8 mil mil under last year which may have been used on extensions) but Wilson does not go the extra mile, i.e. penny wise, pound foolish on GM (TD )and Coaches, which are as important as the players.

 

Also, yes, the Player Assn's job is to get them as much as possible, i.e. more loopholes or agreements. At $50 mil a year for each team in bonuses, it will allow for plenty of cash for the players without making so much money available that all players are getting ridiculous sums of money. Not doing this will widen the gap between the haves and have nots and unbalance parity again. This needs to be addressed in the meeting and if they cannot put something in place to limit bonuses, they need to go back to the previous or old limits.

 

If they do not come up with a revenue sharing plan, and there is much opposition, they must put some limits in. Then Ralph will need to do his part. Spend the money this year, or as sad as it is to say, he will never see another Buffalo Bills Super Bowl.

[Arkady Renko]

A better thing to do would have been to give football players the same guaranteed contracts that players have in all other sports instead of tying the salary cap to local revenues and national revenues. I think the players association would make this trade.

 

Yeah, it would suck for teams in that there is a substantial risk of guaranteed contracts but all teams would face this same risk. And I think football players would give up higher potential salaries for lower, assured salaries. (People are risk-averse for the most part, after all.)

 

And would it be a bad thing to have teams more invested in the health of their players?

[MadBuffaloDisease]

Like I said, I know Buffalo is one of the teams not able due to the economy, ticket price levels and few boxes. And maybe Wilson spends close to cap ( although if I recall we were $7 or 8 mil mil under last year which may have been used on extensions) but Wilson does not go the extra mile, i.e. penny wise, pound foolish on GM (TD )and Coaches, which are as important as the players.

TD was hailed as a good hire at the time, mainly because of his work in Pgh. He failed here but it's not like Ralph went cheap or with some no name. And it's not like good GM's are easily found.

 

As for head coaches, most top coaches don't want to coach in Buffalo, unless they get a premium versus a major market. And again as I said, paying $4.5M for a guy like Nick Saban doesn't guarantee anything.

[Lurker]

Now if you were S or J, would you want to subsidize someone not willing ( not saying able ) to maximize revenues?

 

Tough. No one pulled the wool over their eyes about how revenue sharing worked prior to 2002 or 2003. The NFL was a 32-member consortium and every team was on a level playing field from a player signing standpoint.

 

The NFL was built on 32 team payroll parity, but that's becoming harder and harder to maintain in an era of $18 million-plus signing bonuses. S & J are entitled to their profit, but driving a stake through the heart of the parity model by exploiting the signing bonus dispariety between large and small market owners is changing the economic landscape that made the NFL the best pro sports league.

[MadBuffaloDisease]

Tough. No one pulled the wool over their eyes about how revenue sharing worked prior to 2002 or 2003. The NFL was a 32-member consortium and every team was on a level playing field from a player signing standpoint.

 

The NFL was built on 32 team payroll parity, but that's becoming harder and harder to maintain in an era of $18 million-plus signing bonuses. S & J are entitled to their profit, but driving a stake through the heart of the parity model by exploiting the signing bonus dispariety between large and small market owners is changing the economic landscape that made the NFL the best pro sports league.

If that (ridiculously huge signing bonuses) wasn't enough, they found a way to screw-over smaller market teams by putting a bug in the NFLPA's ear about having the salary cap based on ALL revenue, not just shared revenue. Now the bigger markets KNOW they can outspend their smaller market rivals.

 

aholes.

[oregonbbfan]

Good comments. I think we all agree that the S&J's of the world make no bones about taking advantage whether within or outside the rules. Cudos for Ralph seeing in advance what the big boys were trying to do. I can just imagine the comments when old Ralph objected to the raping of the small marrket teams and the distinct advantage they tried to take.

 

Again, you people are right on with your comments on garanteed contracts, on GM/Coaches and we must do something riskier than others to trump th big cities and endorsements. That I believe was one of the good things about TD, he could get the stars to sign with little risk or cap issues. Marv will appeal to the real level headed, intelligent character guys who are team oriented. That is OK but we need some impact players in both FA and the draft, this year.s s tosign them

 

GM and coachs are old news and a done deal now. We must get a level playing field in bonus pool. If there is no limit or equality in the total bonus pool, the small markets will not be in the SB. Buffalo in the meantime must take some risk this year. They will probably need to overpay on some free agents or even gaurantee a portion but do what it takes to sign them. I would use gauranteed money along with bonuses to keep Nate.

 

I like the creativity expressed, will Marv be as creative as TD in signing impact, not second tier players.

 

Any other creative thoughts that will get select stars here?

[BillsFanM.D.]

I was daydreaming the other day about stadium naming rights (yes...sad; I know) and was thinking about the Green Bay situation where the team is publicly held. I know the NFL no longer allows this scenario but what about "12th Man Field" or "Fan Park" where zealous fans can make contributions to a specific fund for having the stadium named after "us." We don't "own" stock but can contribute in a way that may help keep the team. And yes, I realize season tickets /single game tickets are expensive enough....and I think Ralph should sell the rights given current economics. I'm not sure of the legalities but the math is interesting even versus corporate sponsorship. If you have 2.5 million bills fans willing to contribute 10bucks per year; that obviously equates to an easy 25million. I, for one, would be willing to contribute more and there may be way more than 2.5mil willing to kick in a little (I hope?). I live in NC now and can't have season tickets but do try to go to one game per year. for me, the thought of rooting for the Buffalo Bills of Los Angeles is nauseating. This would be one way to add support from a distance. Flame away....

[Dibs]

they used to have the answer by not including the local revenues in the cap.

 

However, the NFLPA has a single purpose of increasing salaries for its players, so any change to limit bonuses has no chance.

Your point is THE most important aspect to this.......and most people do not seem to realize it or factor it into their thoughts.

 

You've said it extremely simply here so I might elaborate on it for those that need more detail.

 

When oregonbbfan said

"If you were Snyder or Jones who have worked tirelessly/ruthlessly to maximize the dollars they draw, would you want to help someone who isn't willing to make the same effort? Granted, they have lucretive sites and get lots of money from boxes but they leave no stone unturned to bring in more profit. "

.......it is not really that big an issue in regards to the small markets. What is a big issue is that the 'extra' money generated counts towards the collective NFL income in regards to determining the salary cap figure.....but does not get counted towards the shared revenue pool.

 

What this means is that if DAL 'earns' itself 80mil extra(& good on them) than the Bills(for example).....both teams operating expenses(salary cap) would increase by $1mil(based on 40% cap take).

Even if the Bills(small market) tried everything possible to increase revenue, they would still find themselves operating at far lower profit margins than the large market teams.....and as things progressed, cash flow could become a severe problem.

 

Example 2.

For ease.....lets split the league into Large market(L) and Small market(S) 75-25.....or.....24(L)-8(S)

If the 24(L) teams all earned themselves(on average) $64mil of non-shared dollars.....and the 8(S) teams all earned themselves(on average) $16mil of non-shared dollars.

The salary cap would be $20.8 million above what it would be if that money was not included.

This means the (L) teams are making $43.2mil profit(ave) out of their extra $64mil(ave).....67.5%

The (S) teams would be making a loss of $4.8mil on their extra $16mil......negative 30%.....a loss of profits even though they work as hard as the (L) teams to raise revenue.

 

The problem isn't the (L) teams making the money & not sharing it with the other teams.......

The problem is that they are spending 40% of it on the players....& the (S) teams are forced to do likewise.

The (L) teams making a lot of extra money is actually costing the (S) teams more money than before.

It is tantamount to getting the smaller revenue teams to help pay for their players salaries.....since....due to their (the (L) teams) raising of the overall cap by (from example above)....$25.6mil each.....yet the cap cost to each individual (L) team is only $20.8mil.

 

Are people following this?

The end result is the (S) teams paying some of the bills of the (L) teams.

 

*side-point*

This greatly reduces the percent of profits for a small market team. People say...."well they're making millions so what's the problem?" The problem is.....if you had money invested in....let's say a term deposit, you'd expect a reasonable amount of interest. If you had....I don't know....$500mil invested, that reasonable amount of interest is HUGE. At 5%, you'd get 25mil back profit a year....& we all know that 'business' expects much greater profit margins than us shmucks. If we expect Ralph to give away his money(reasonable interest) so-as the Bills can compete with the big boys.......why not expect the fans to forgo the profits on their shares/term deposits/land value increases.....etc, etc, etc.

Edited January 21, 2007 by Dibs

[oregonbbfan]

Good input Dibs, I think. I don't know if I followed it correctly but if what you say is true, the problem is the total amount earned by the big teams hits both the cap and the amount available for bonuses. That being the case, Ralph must go into the meeting on the 27th not looking to get some of the richies money but insistant on a limit on the monies able to be spent on bonues ( something reachable by the S teams ) and a new formula for computing salary cap.

 

I feel these approaches are more palatable than sharing revenue although it may be easier to go the shareing route. If the L teams are adverse to giving their money to the S teams, they will need to do both the limit on bonus and the re-formulation on cap calculation.

 

Either way, Ralph has to be someone coming across as constructive in wanting equality and parity in the NFL. If he goes in as an old crotchity, whiney and angry owner, he will see much obstruction.

 

Don't know how long it will take to hammer out an equitable solution, if at all, so in the meantime, Ralph needs to open his wallet and spend OVER his profit this year. I feel if Ralph does this a year or two he will acquire enough talent to get over the hump. We shall see how committed he is.

[gmac17]

was daydreaming the other day about stadium naming rights (yes...sad; I know) and was thinking about the Green Bay situation where the team is publicly held. I know the NFL no longer allows this scenario but what about "12th Man Field" or "Fan Park" where zealous fans can make contributions to a specific fund for having the stadium named after "us." We don't "own" stock but can contribute in a way that may help keep the team. And yes, I realize season tickets /single game tickets are expensive enough....and I think Ralph should sell the rights given current economics. I'm not sure of the legalities but the math is interesting even versus corporate sponsorship. If you have 2.5 million bills fans willing to contribute 10bucks per year; that obviously equates to an easy 25million. I, for one, would be willing to contribute more and there may be way more than 2.5mil willing to kick in a little (I hope?). I live in NC now and can't have season tickets but do try to go to one game per year. for me, the thought of rooting for the Buffalo Bills of Los Angeles is nauseating. This would be one way to add support from a distance. Flame away...

 

lots of troubles there...and I won't go into details, but there certainly aren't 2.5 million bills fans out there willing to give $10. The entire state of NY probably doesn't have 2.5 million people north of westchester. The amount of money a team like the patriots or redskins can make from boxes and corporate seats is staggering. The pats club seats - not boxes - go for about $450 per ticket per game if I remember correctly - Buffalo simply doesn't have those kinds of businesses or fans who can pay that kind of $$.

[BillsFanM.D.]

lots of troubles there...and I won't go into details, but there certainly aren't 2.5 million bills fans out there willing to give $10. The entire state of NY probably doesn't have 2.5 million people north of westchester. The amount of money a team like the patriots or redskins can make from boxes and corporate seats is staggering. The pats club seats - not boxes - go for about $450 per ticket per game if I remember correctly - Buffalo simply doesn't have those kinds of businesses or fans who can pay that kind of $$.

 

Are there 2.5mil of us in the world? Like I said, I for one would contribute and I'm in NC. You're dead on about corporate/suite situation though. That's an impossible amount to collect relative to the "rich" franchises. Here's hoping Ralph sells the rights to the stadium. Enough of the noble stance already.