Think the owners are being the stubborn ones? Think again

[Deus Irae]

I don't understand that.
I am under the impression that the CBA (at least for many years) has been an agreement of what REVENUES (less certain expenses) are used to calculate the cap. Those are all documented and shared.
Why would the profits of the teams, i.e. how they spend their 40% have anything to do with the negotiations?

Because the profits are post-expenses. You seem to be confusing profits with total revenue.

 

[Metaphors]

The 4 sports leagues are in precisely the same situation as every other business model in the country. And it's not as if there's revenue sharing or anti-trust exemptions involved here that change everything, or something radically different like that.

Revenue sharing is between the owners and is not part of the CBA. The anti-trust exemption is granted by the government, not the NFLPA. If the government asked for detailed expense reports in exchange for continuing the exemption, you would have a point.

The owners can make whatever claims they want in negotiations and the players can choose to believe them or not. The players don't have any basis (legal, ethical or moral) for asking for private financial information from a private company. The league provides public tax information and financials as required by the CBA. Going beyond that is a concession by the owners.

AJ makes a good point about the players fishing expedition for embarrassing info they can use as leverage. I'll go beyond that and claim that the players knew they would never get the information they were asking for. They needed an issue to justify their total reluctance to make any concessions.

 

[fumbrunner]

Revenue sharing is between the owners and is not part of the CBA. The anti-trust exemption is granted by the government, not the NFLPA. If the government asked for detailed expense reports in exchange for continuing the exemption, you would have a point.

The owners can make whatever claims they want in negotiations and the players can choose to believe them or not. The players don't have any basis (legal, ethical or moral) for asking for private financial information from a private company. The league provides public tax information and financials as required by the CBA. Going beyond that is a concession by the owners.

AJ makes a good point about the players fishing expedition for embarrassing info they can use as leverage. I'll go beyond that and claim that the players knew they would never get the information they were asking for. They needed an issue to justify their total reluctance to make any concessions.

Good Post. Agree 100%

 

[Ring 6]

Because the profits are post-expenses. You seem to be confusing profits with total revenue.

I'm not confusing anything.
The criteria of the cap has always been REVENUE less certain expenses which are greed upon.
Why would profit have anything to do with that.

If I work as a salesman for you and you agree to give me 50% of everything I bring, after you deduct expenses for rent of office space and the payments on my company car, why would your profit have anything to do with that discussion? What you do with your 50% (or whatever is left) shouldn't be reason for me renegotiate. The efficeincy with which you run your business after paying me what we agreed to shouldn't be something I participate in.

 

[Ring 6]

Revenue sharing is between the owners and is not part of the CBA. The anti-trust exemption is granted by the government, not the NFLPA. If the government asked for detailed expense reports in exchange for continuing the exemption, you would have a point.

The owners can make whatever claims they want in negotiations and the players can choose to believe them or not. The players don't have any basis (legal, ethical or moral) for asking for private financial information from a private company. The league provides public tax information and financials as required by the CBA. Going beyond that is a concession by the owners.

AJ makes a good point about the players fishing expedition for embarrassing info they can use as leverage. I'll go beyond that and claim that the players knew they would never get the information they were asking for. They needed an issue to justify their total reluctance to make any concessions.

Thats how I saw it, but I am far from intensely tune in to the details.
I think another result of the financials would be to use them to set the scale based upon the most profitable teams claiming the players shouldnt suffer because the owners mismanage their businesses.
Of course, the agreement has always been based upon splitting REVENUES, so what either side chooses to do with their share seems totally irrelevant to the discussion.
If the NFL said "We have been paying you 60% and making great profits, but we feel we can make more, and no longer feel you are deserving of such a large share" they have every right to take that negotiating standpoint. Again, I'm not dialed in but I haven't seen the owners change the equation from sharing revenues to sharing profits, but I think they would be just fine with that. Any business would be thrilled to tie labor costs to profits rather than revenue, because they would never lose a nickel. (But none ever will because it is not a workable scenario for either side)

 

[Deus Irae]

Revenue sharing is between the owners and is not part of the CBA.

Revenue sharing between owners and players and was a part of the CBA. That's where the percentage of revenues came into play:

Currently, the owners take $1 billion off the top of the NFL's total revenue, and after that, the players receive 59.5 percent of the remaining revenue, which ends up working out to 41.5 percent of the total revenue, according to the player rep.

Source: Players 'Optimistic' That NFL, Player's Association Can Agree on New CBA With Additional Extension - NFL - NESN.com

The anti-trust exemption is granted by the government, not the NFLPA.

And it makes the situation with the sports leagues different from other business models.

If the government asked for detailed expense reports in exchange for continuing the exemption, you would have a point.

I have a point anyway. You don't.

The owners can make whatever claims they want in negotiations and the players can choose to believe them or not. The players don't have any basis (legal, ethical or moral) for asking for private financial information from a private company. The league provides public tax information and financials as required by the CBA. Going beyond that is a concession by the owners.

Your argument makes no sense at all. Players can ask for the information, and they have a basis. It's called financial self-interest. The notion that they have no ethical basis for asking for proof of financial problems before surrendering money on the basis of financial problems is asinine, to put it kindly.

AJ makes a good point about the players fishing expedition for embarrassing info they can use as leverage. I'll go beyond that and claim that the players knew they would never get the information they were asking for. They needed an issue to justify their total reluctance to make any concessions.

Any information is subject to abuse. That doesn't make AJ's point a good one.

 

[Brady_to_Moss]

bye bye footbal

 

[Ring 6]

Because the profits are post-expenses. You seem to be confusing profits with total revenue.

Can you clarify?
Are you saying that you think they should abandon a split based on revenue and negotiate a split based on profits?
Or are you saying that what profit the owners are able to manage from their share should dictate how much the players share should be, i.e. that if the teams operate irresponsibly and dont make profit off their 40% the players should get no more, or less, but if the owners manage their business well, then the players should be the ones to benefit?

Players get a share of revenue because they play a large part in generating it. Players have pretty much nothing to do with the level of profit the team turns on its share of the revenue it retains.

 

[Deus Irae]

I'm not confusing anything.
The criteria of the cap has always been REVENUE less certain expenses which are greed upon.
Why would profit have anything to do with that.

If I work as a salesman for you and you agree to give me 50% of everything I bring, after you deduct expenses for rent of office space and the payments on my company car, why would your profit have anything to do with that discussion? What you do with your 50% (or whatever is left) shouldn't be reason for me renegotiate. The efficeincy with which you run your business after paying me what we agreed to shouldn't be something I participate in.

Read the part of your post that I highlighted again. It may have been that you worded it poorly, but that's clearly a mix up between revenues and profits.

BTW, can you show me the "Need to build new stadiums" expense that was delineated in the last CBA? It may be there, but I don't remember it, and that's one of the arguments the league was putting forth.

 

[Ring 6]

Any information is subject to abuse. That doesn't make AJ's point a good one.

Help me here. If any information is subject to abuse how does that not make my point that the information could be abuse a good one?
You just agreed with the point, then said that it isnt a good one???????

 

[Deus Irae]

Can you clarify?
Are you saying that you think they should abandon a split based on revenue and negotiate a split based on profits?
Or are you saying that what profit the owners are able to manage from their share should dictate how much the players share should be, i.e. that if the teams operate irresponsibly and dont make profit off their 40% the players should get no more, or less, but if the owners manage their business well, then the players should be the ones to benefit?

Players get a share of revenue because they play a large part in generating it. Players have pretty much nothing to do with the level of profit the team turns on its share of the revenue it retains.

I'm saying that the bolded portion of your statement was seemingly confusing revenue with profit.

Why would the profits of the teams, i.e. how they spend their 40% have anything to do with the negotiations?

The simple, obvious answer is that the owners are claiming that rising expenses are eating into their profits. In other words, it's the owners bringing the owners' expenses into the equation.

 

[Deus Irae]

Help me here. If any information is subject to abuse how does that not make my point that the information could be abuse a good one?
You just agreed with the point, then said that it isnt a good one???????

Because it's not a sufficient justification for keeping the information from the players.

 

[Ring 6]

Read the part of your post that I highlighted again. It may have been that you worded it poorly, but that's clearly a mix up between revenues and profits.

No, you are reading it incorrectly.
The question was why would what the owners do with their 40% of the revenue (the result of which is profit) have anything to do with the negotiations. "What they do with their 40%" is the expenses they absorb from it, the result being profit, that is, when you establish revenue profit is determined by expenses.

BTW, can you show me the "Need to build new stadiums" expense that was delineated in the last CBA? It may be there, but I don't remember it, and that's one of the arguments the league was putting forth.

I don't know why that is relevant. You seem to be confusing the league explaining why they feel they need a larger share of revenue with inventing numbers to put in a formula.
I have no doubt that the leagues expenses have increased in this economy. Mine have and I'm sure yours have. If ownerships feels they need a bigger share of revenue to operate at the level they are comfortable with I don't know how that equates to needing to show the books. Are you saying it comes down to the owners are lying that they want a bigger share and the players can prove it by seeing the books?
What if the books show 200 billion in profits and the owners said that they need more? Are they not allowed to? It is a negotation between adverserial parties.

 

[Ring 6]

Because it's not a sufficient justification for keeping the information from the players.

Really? The fact that it would allow them to fish for information to give them an advantage in the negotiations is not a sufficient justification? You werent born yesterday Deus.
This is an adverserial process. They are negotiating over billions of dollars. Handing over information that could be used against you would be silly. In fact, if the teams were publicly traded (and yes I know the info would be public) agreeing to such a request would be considered negligent to the interest of the shareholders.
Do you really think the owners take on no risk in opening their books? Does your employer show you their books? I doubt it.

 

[Deus Irae]

Really? The fact that it would allow them to fish for information to give them an advantage in the negotiations is not a sufficient justification? You werent born yesterday Deus.
This is an adverserial process. They are negotiating over billions of dollars. Handing over information that could be used against you would be silly. In fact, if the teams were publicly traded (and yes I know the info would be public) agreeing to such a request would be considered negligent to the interest of the shareholders.
Do you really think the owners take on no risk in opening their books? Does your employer show you their books? I doubt it.

The sports leagues are not anything like normal U.S. business models. You know this. If you can't get off those comparisons, there's no use discussing this, because you'll get just about everything 100% wrong.

As for the books, if there's nothing there, how can the players get any advantage?

 

[SteveBsFan]

With all the problems in the world, both are acting like spoiled babies

I agree they're acting like babies, but why are World affairs always mentioned? Would we consider this situation any different if all was right in the World? I wouldn't.

The NBA gave such information to the NBA players.

And they're facing a lockout of their own very soon. Plus they had to open their books to prove they couldn't pay their players. NFL owners aren't saying they can't pay the players, they are telling players they want a bigger slice of the pie in the short term so they can supposedly re-invest in the game, which in theory is supposed to make the pie larger in the long run.

While in that situation I agree the players union should have some knowledge of where the money 'saved' is re-invested to make sure it doesn't go back in the owners pockets, but they really have no leg to stand on regarding a full audit. That's just being ridiculous on their part.

Doing things like 18 game schedule, another playoff team or two per league, and more marketing possibly world wide resulting in a bigger tv share should increase the overall revenue from 8 billion or whatever it is, which is good for the game and the players.. IF of course the lousy owners in the league don't take their cut and buy a yacht.

 

[Ring 6]

I'm saying that the bolded portion of your statement was seemingly confusing revenue with profit.

OK, let me explain it to you.
I said that what the owners do with their 40% of the revenue should not have anything to do with the negotiations.

DEFINITON: What they do with their 40% = how they manage the revenue they retain, ie what they spend. That results in the profit.

Revenue is 100,000.
40/60 split is 40,000 to owners.
"What they do with their 40%" means their expense.
The result is profit.

I could see how you may not connect the description of profit as what you do with your revenue, but have no clue how you could consider that the same thing as revenue.

In any event, the question remains, why would the level of profit the teams are able to realize from their share of the revenue be part o the negotiations when the formula has always been revenue and no one is suggesting otherwise?

The simple, obvious answer is that the owners are claiming that rising expenses are eating into their profits. In other words, it's the owners bringing the owners' expenses into the equation.

I do not understand why that matters.
What would showing the books solve? Do you expect they will show declining expenses? If so, who cares, because that is not part of the formula.
I am struggling to understand your overall point here.
Are you saying that because the owners cited expenses as one of their motivations to require a bigger share of revenue that they must prove their expenses or retract their business decision that the current split is unacceptable to them?

 

[Deus Irae]

No, you are reading it incorrectly.
The question was why would what the owners do with their 40% of the revenue (the result of which is profit) have anything to do with the negotiations. "What they do with their 40%" is the expenses they absorb from it, the result being profit, that is, when you establish revenue profit is determined by expenses.

I wasn't reading it incorrectly at all. You wrote it poorly. Notice the change you've made here:

when you establish revenue profit is determined by expenses

compared to:

Why would the profits of the teams, i.e. how they spend their 40% have anything to do with the negotiations?

Expenses are only a portion of "how they spend their 40%". Profits are the money's remaining after paying for all the necessaries (i.e. expenses) out of that 40%, regardless of whether or not they are spent.

I don't know why that is relevant. You seem to be confusing the league explaining why they feel they need a larger share of revenue with inventing numbers to put in a formula.

No, I'm responding to a specific point in your post:

certain expenses which are greed upon

One of the owners claims was the need for more money to have it available for stadium building and improvements.

I have no doubt that the leagues expenses have increased in this economy. Mine have and I'm sure yours have. If ownerships feels they need a bigger share of revenue to operate at the level they are comfortable with I don't know how that equates to needing to show the books. Are you saying it comes down to the owners are lying that they want a bigger share and the players can prove it by seeing the books?
What if the books show 200 billion in profits and the owners said that they need more? Are they not allowed to? It is a negotation between adverserial parties.

Basic stuff. I'm sorry you can't understand why people wouldn't want to take a pay cut without evidence of need. It's abundantly clear to most people.

 

[McCourty Island]

OK, let me explain it to you.
Are you saying that because the owners cited expenses as one of their motivations to require a bigger share of revenue that they must prove their expenses or retract their business decision that the current split is unacceptable to them?

The owners are citing rising expenses (lower profits) as the sole factor in demanding an increase portion of the revenue. They are not required to prove an increase in legit expenses but the NFLPA also isn't required to believe them or agree to their demands.

 

[Deus Irae]

I do not understand why that matters.
What would showing the books solve? Do you expect they will show declining expenses? If so, who cares, because that is not part of the formula.
I am struggling to understand your overall point here.
Are you saying that because the owners cited expenses as one of their motivations to require a bigger share of revenue that they must prove their expenses or retract their business decision that the current split is unacceptable to them?

My point is easy to understand. "Show us (the NFLPA) where your expenses have increased dramatically, if you want us to take a dramatic pay cut" doesn't really take a lot of explanation.