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Livinginthe past
02-07-2007, 01:11 PM
Revenue issue gets personal for NFL owners
Print This Story By DANIEL KAPLAN
Staff writer

Published February 05, 2007 : Page 01
Revenue disparity, the issue that has bedeviled the NFL for several years, looks to become an even thornier matter in 2007.

With yesterday’s Super Bowl now in the rearview mirror, the NFL is faced with the continuing struggles of some of its teams to make ends meet, a pressing concern for a league based on competitive parity.


Teams like the Patriots want recipients to have to qualify for the extra revenue sharing by demonstrating they are trying to raise additional money on their own. Clubs like the Bills largely contend they should not be penalized by their relative small market size.

“Probably close to half the [32] clubs are feeling the same financial strain [as the Falcons],” said Atlanta team owner Arthur Blank last week, adding that his franchise suffered a cash-flow loss in the recently completed season. “It is not three or four clubs. … The difference between the third- and fourth-revenue quartile is humongous and just needs to be dealt with.”

A revenue-sharing committee is set to meet Wednesday to try to make progress on how to distribute subsidies to needy teams. Meanwhile, the arguments between high- and low-revenue teams are becoming increasingly personal and contentious, a notable shift for a sport that has long kept its disagreements discreet and in-house.

Responding to reported comments of New England Patriots owner Robert Kraft saying late last month that the low-revenue Buffalo Bills should sell naming rights to their stadium, Buffalo owner Ralph Wilson said last week, “I appreciate Kraft’s suggestion. It recalls the oldest story of life: When you go to a poor guy, he will give you money. When you go to a rich guy, he will give you advice.”
The Bills play in Ralph Wilson Stadium.

Bills treasurer and CFO Jeff Littman added, “It appears that when Bob Kraft gets a subsidy from the league, he thinks it is an incentive, but when he is asked to pay his fair share of labor costs, he thinks of that as wealth transfer.

“The NFL borrowed $150 million from banks to subsidize the construction of Gillette Field for the Patriots,” Littman said. “We pay the banks back with a payment from our TV revenues and our visiting team’s share of club-seat premiums; they keep all the suite, advertising, naming-rights and other revenues. We get to pay the players’ share on that revenue.”
To be sure, that league loan is deducted from the salary cap, and one-third of the Patriots’ general-ticket revenue is shared with the other 31 clubs.
Said a Patriots spokesman, “The fact is that Gillette Stadium is a model for how the G3 [stadium-financing] program is a win-win for not only the team building the stadium, but also the 31 other teams. Gillette Stadium has been a net generator of cash to the other 31 teams.”

It’s this type of back and forth that will surely be played out when the revenue-sharing committee meets via conference call this week. Teams like the Patriots want recipients to have to qualify for the extra revenue sharing by demonstrating that they are trying to raise additional money on their own. Clubs like the Bills largely contend they should not be penalized by their relative small-market size.

Collectively, the eight-club group is known as the qualifier committee.

Much of the matter at hand stems from the collective-bargaining agreement the league cut last year, giving players a share of all revenue. As a result, for the first time, every local dollar counts toward the salary cap. That means that teams without fruitful stadiums are faced with steeper labor costs because the cap is being driven up by franchises in more bountiful venues.

The Falcons, for example, lost money in 2006 even though on paper they turned a profit because of the way player bonuses are accounted for, Blank said. At some point, teams that are spending a large percentage of their revenue on player costs need relief, he said.

Minnesota Vikings owner Zygi Wilf made a similar concession in April, but he declined to comment for this story. Wilson has said the Bills are losing money, as well.

This all comes as a startling development for a league that for so long has considered itself the gold standard in sports. For many years, the NFL’s national media money, which is evenly distributed among all the league’s teams, went a long way toward covering player costs. With the surge of local revenue driving up the cap, that is no longer the case.

“It is important we get this thing resolved sooner rather than later,” said Bill Prescott, senior vice president of the Jacksonville Jaguars, another club recognized as a low-revenue team. “By the time we get to the owners meeting in March, hopefully this will be resolved by then or go to an owners vote at that meeting.”

About half of the league’s more than $6 billion in revenue is shared equally, about 30 percent is shared unequally and the remainder is not shared. Before creating as part of the new labor deal a supplemental revenue-sharing pool of up to $900 million over six years, teams in need collectively received about $40 million annually.

Livinginthe past
02-07-2007, 01:18 PM
Im all for the smaller revenue teams remaining competitive, but it seems slightly ridiculous that franchises like the Bills can come cap in hand to teams like the Patriots for extra money, yet make no effort to generate extra money themselves.

I thought the comments attributed Ralph Wilson were facetious, making out that that 'rich men' like Robert Kraft only give advise - who does he think partly finances his team?

Its also amusing that the Bills play in Ralph Wilson Stadium - any chance we could be looking at an owner putting ego ahead of earning?

Big D
02-07-2007, 01:35 PM
Im all for the smaller revenue teams remaining competitive, but it seems slightly ridiculous that franchises like the Bills can come cap in hand to teams like the Patriots for extra money, yet make no effort to generate extra money themselves.

I thought the comments attributed Ralph Wilson were facetious, making out that that 'rich men' like Robert Kraft only give advise - who does he think partly finances his team?

Its also amusing that the Bills play in Ralph Wilson Stadium - any chance we could be looking at an owner putting ego ahead of earning?

Paul Brown Stadium. Bengals owner has kept his own naming rights while bitching about the lease he has with cincy. I think selling the naming rights is a smart buisness move. Instead of constantly bitching about how his team isnt making any money maybe mr wilson should do more to bring in revenue.

tony hipchest
02-07-2007, 01:46 PM
whose gonna want to buy naming rights in cinci or buffalo?

Port-A-Jon stadium and Ti-D-Bowl field?

Big D
02-07-2007, 01:49 PM
whose gonna want to buy naming rights in cinci or buffalo?

Port-A-Jon stadium and Ti-D-Bowl field?

breaking news. Paul brown gives up his stadium naming rights to ky jelly. The new official sponsor of the bungles

Livinginthe past
02-07-2007, 01:59 PM
breaking news. Paul brown gives up his stadium naming rights to ky jelly. The new official sponsor of the bungles

How about Paul Brown(ing) Stadium?

Browning - its the Bengals offensive weapon of choice!

http://i65.photobucket.com/albums/h218/n_mckeown/homenav3.jpg

NM

Big D
02-07-2007, 02:01 PM
Or Zig Zags stadium

sumo
02-07-2007, 02:04 PM
The smaller market teams are looking to the NFL to bail them out - this was a huge controversy is AZ from the time the Cards moved there - they ended up passing a ballot measure to get their new stadium built and now they are ok - if that measure had failed, the Cards would have left AZ for sure - my biggest question is why do teams like the Pats get 150 million dollar loan from th NFL while teams like the Cards have to get massive tax hikes on hotel rooms - this has always perplexed me...being a season ticket holder for the Cards it was tough renewing every year knowing I was gonna bake like a potato the first three games of the season..now they sell out every game easily even though they still suck...

stlrtruck
02-07-2007, 02:19 PM
And the rich get richer and the poor get poorer!

Naming rights or no naming rights, I think owners need to do some heavy thinking on how to keep their teams competitive without screwing the fans, AGAIN! Put your heads together, name the field if you want to keep the stadium name.

But don't bitch about how you can't make money when you are agreeing to outrageous contracts with your players and expecting the other 31 teams to bail you out.

But on the flip side, don't bitch about bailing out the other 31 teams when the agreement was made. If you didn't like then, you should have found a way to stop it from being passed - like maybe come up with your own plan!

As for the loans, it would be nice to know how the NFL does that type of business for a select few. I know the Steelers didn't get a loan? When was Gillette stadium built? When did the pansies start winning Super Bowls? Conspiracy anyone?

And how funny that the Russian President has a patriots SB ring too! It's all becoming clearer and clearer!!!

MACH1
02-07-2007, 03:39 PM
whose gonna want to buy naming rights in cinci or buffalo?

Port-A-Jon stadium and Ti-D-Bowl field?

The Green Bud Field.

Big D
02-07-2007, 04:50 PM
This could be a whole new thread on things to name the bengals stadium

Atlanta Dan
02-07-2007, 04:56 PM
The disconnect between the diverging interests of the small and big revenue teams is a ticking time bomb.

With regard to the stadium loan fund, here are excerpts from a story that came out last week:

NFL says stadium fund has run dry

In a piece of bad news for the 49ers, albeit news they might have known was coming, NFL Commissioner Roger Goodell said today that the league's stadium-building subsidy program has run out of money.

Speaking Friday in Miami, where the Super Bowl will be held on Sunday, Goodell delivered a "state of the league" address. Afterward, he was asked if it were true that the "G3" funding had run dry. He said it had, and that the league would have to find a new way to help teams and cities build or refurbish stadiums. A new stadium can cost a billion dollars....

The NFL's G3 program has subsidized stadium construction or renovation, and the loans are repaid with the visiting teams' share of club-seat revenue once the project is finished.

League observers knew that the program was about out of money. In December, NFL owners approved a $300 million loan from their G3 stadium fund to help pay for the construction of a new, joint stadium for the New York Giants and New York Jets.

The stadium is expected to cost between $1.1 billion to $1.2 billion and will be located at the Meadowlands, the site of the current stadium. Previously, G3 loans were limited to $150 million per club, but the Giants and Jets received a 50 percent funding match because they are in a top-five television market.

Owners also approved a $42.5 million grant from the G3 program to help renovate Arrowhead Stadium in Kansas City.

The combined $342.5 million in grant approvals essentially drained the G3 fund.

That means the 49ers, the Cowboys and the Vikings, three teams in the process of planning stadium proposals, might have their projects delayed until a new funding program is in place, unless they find another way to come up with a billion dollars.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/02/SPG4MNTR7L7.DTL&feed=rss.sports

So the New York teams and Kraft got theirs and everyone else can go pound sand -only funny part of the story is that it looks like the fund being tapped out at least temporarily screws the Cowboys.

FYI - the loan to the Giants and Jets was approved 30 - 2.

The Buffalo Bills and Cincinnati Bengals voted against the request. They also were the only teams to vote against the sport's labor and revenue-sharing settlement in March.

http://www.washingtonpost.com/wp-dyn/content/article/2006/12/07/AR2006120701484.html

As I said yesterday in a post on whether Tagliabue should be in the HOF, there is a good chance that in 2008 the owners opt out of the collective bargaining agreement that Tags rammed through last year and the house of cards that keeps the NFL from turning into baseball in terms of all teams being able to compete may collapse.

Big D
02-07-2007, 05:01 PM
The disconnect between the diverging interests of the small and big revenue teams is a ticking time bomb.

With regard to the stadium loan fund, here are excerpts from a story that came out last week:

NFL says stadium fund has run dry

In a piece of bad news for the 49ers, albeit news they might have known was coming, NFL Commissioner Roger Goodell said today that the league's stadium-building subsidy program has run out of money.

Speaking Friday in Miami, where the Super Bowl will be held on Sunday, Goodell delivered a "state of the league" address. Afterward, he was asked if it were true that the "G3" funding had run dry. He said it had, and that the league would have to find a new way to help teams and cities build or refurbish stadiums. A new stadium can cost a billion dollars....

The NFL's G3 program has subsidized stadium construction or renovation, and the loans are repaid with the visiting teams' share of club-seat revenue once the project is finished.

League observers knew that the program was about out of money. In December, NFL owners approved a $300 million loan from their G3 stadium fund to help pay for the construction of a new, joint stadium for the New York Giants and New York Jets.

The stadium is expected to cost between $1.1 billion to $1.2 billion and will be located at the Meadowlands, the site of the current stadium. Previously, G3 loans were limited to $150 million per club, but the Giants and Jets received a 50 percent funding match because they are in a top-five television market.

Owners also approved a $42.5 million grant from the G3 program to help renovate Arrowhead Stadium in Kansas City.

The combined $342.5 million in grant approvals essentially drained the G3 fund.

That means the 49ers, the Cowboys and the Vikings, three teams in the process of planning stadium proposals, might have their projects delayed until a new funding program is in place, unless they find another way to come up with a billion dollars.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/02/SPG4MNTR7L7.DTL&feed=rss.sports

So the New York teams and Kraft got theirs and everyone else can go pound sand -only funny part of the story is that it looks like the fund being tapped out at least temporarily screws the Cowboys.

FYI - the loan to the Giants and Jets was approved 30 - 2.

The Buffalo Bills and Cincinnati Bengals voted against the request. They also were the only teams to vote against the sport's labor and revenue-sharing settlement in March.

http://www.washingtonpost.com/wp-dyn/content/article/2006/12/07/AR2006120701484.html

As I said yesterday in a post on whether Tagliabue should be in the HOF, there is a good chance that in 2008 the owners opt out of the collective bargaining agreement that Tags rammed through last year and the house of cards that keeps the NFL from turning into baseball in terms of all teams being able to compete may collapse.

Great article dan, I think they need to redo the deal. We dont need owners going broke and having florida marlin like firing sales.

Livinginthe past
02-07-2007, 09:05 PM
I think the NFL looks at these loans, much like a regular bank does, as an investment.

It must have been clear that New England had good potential to be one of the market leading franchises - therefore bringing money back into the NFL - $150 million is probably a small % of what the Patriots have given back to the NFL.

NM

tony hipchest
02-07-2007, 10:51 PM
It must have been clear that New England had good potential to be one of the market leading franchises - therefore bringing money back into the NFL - $150 million is probably a small % of what the Patriots have given back to the NFL.

NMeither that, or they were in the most desperate need of an upgrade, before they folded up shop and moved to L.A.

the nfl is not quite a "bank".

sumo
02-08-2007, 02:14 AM
either that, or they were in the most desperate need of an upgrade, before they folded up shop and moved to L.A.

the nfl is not quite a "bank".

For the Patriots they are - but not the Cards..