CBS's Mike Freeman: "Deal will be reached within matter of days"

[SanAngeloState]

I'm ambivalent. It would be kind of cool if a whole season was cancelled. Really sock them right in their guts...both sides, but especially the greedy players, most of whom wouldu be pumping gas if not for this gig.

 

[RelocatedPatFan]

We really need to look into executive compensation in this country. It really as gotten to the point where there is a peverse incentive to turn your company into a giant ponzi scheme.

In my AIG example above, Joseph Casano was able to justify hundreds of millions of dollars on compensation from 2003-2007 because they considered all the revenue from CDSs to be profit, when in fact every single one was a losing bet from the get go. So the tax payer covered the debts while Joe was able to walk away scott free.

Hell, the guy is even better than scott free because he is currently receiving a million dollar a year salary from AIG for his "expertise". Only in America is bankrupting one of the biggest companies in the world over a 10 year period of time earn you half a billion dollar nest egg and a million dollar a year income. :bricks:

Maybe we can work out some kind of CEO pay scale as forms of unit of work. My wife the other day was horrified a CEO was making 18 million dollars. i got outhe calculator and it was close to 8654 dollars an hour.

Now if you consider a low level worker at $10 an hour, you have to convince me this guy brings enough contacts and leverage to the table to make up for 865 workers at that rate.

 

[RxJock1120]

Maybe we can work out some kind of CEO pay scale as forms of unit of work. My wife the other day was horrified a CEO was making 18 million dollars. i got outhe calculator and it was close to 8654 dollars an hour.

Now if you consider a low level worker at $10 an hour, you have to convince me this guy brings enough contacts and leverage to the table to make up for 865 workers at that rate.

Unfortunately productivity is NOT how compensation is assigned. A-Rod make $30 mil/year not because he generates enough stats to replace 10 other major league players. Compensation is based on scarcity of available talent, and you are kidding yourself if you think otherwise.

 

[Oswlek]

Unfortunately productivity is NOT how compensation is assigned. A-Rod make $30 mil/year not because he generates enough stats to replace 10 other major league players. Compensation is based on scarcity of available talent, and you are kidding yourself if you think otherwise.

True, but it is still out of whack. Is the world really bereft of executive candiates? Unlike the athletic world, where you must be in the top .1% of humanity to even be a scrub, I'd wager that nearly half the people on Earth could be a decent executive with enough training and business experience.

Scarcity of available talent has very little to do with soaring executive compensation.

 

[BradyManny]

I'm ambivalent. It would be kind of cool if a whole season was cancelled. Really sock them right in their guts...both sides, but especially the greedy players, most of whom wouldu be pumping gas if not for this gig.

I don't even know where to start with this post.

A lot of us would be pumping gas if we weren't good at something. It's called having a skill. How can you hold it against people for having a skill, but not only that, being better at it than anyone else in the world.

Can you say that about yourself at your job? Are you one of the best on Earth at what you do?

On top of that, you clearly reap the benefits of being entertained by these people otherwise you wouldn't be on this forum.

As for calling the players "greedy"...the average NFL player plays four seasons and does irreparable harm to his body during the course of that time. Unfortunately, over the course of that time, a lot of these players will not have made enough to live off for the rest of the lives. Just go to patscap and look at how many players make between 400-600K. Most of them are given this money too early in their lives to know what to do without, lacking the guidance most of us get, and plenty of them will end up blowing it by the time they are mature enough to realize their mistakes.

Name me another field in which you are rewarded for being the best in the world at what you do by having a short, destructive career, and not being paid enough to live your life out comfortably because of that skill, and ultimately having to find another career. For a lot of NFL players, that's reality.

I'm obviously pro-players in this argument, but even if I weren't, I'd take serious offense to the tone in your post. Even as a pro-player guy from the getgo, I understand it's a business and the owners are doing what they think is best for themselves - and I have no problem with that. The players are doing likewise.

 

[RelocatedPatFan]

Unfortunately productivity is NOT how compensation is assigned. A-Rod make $30 mil/year not because he generates enough stats to replace 10 other major league players. Compensation is based on scarcity of available talent, and you are kidding yourself if you think otherwise.

That's very true and I agree with you (I'm not deceiving myself on this account). Though sports does have the interesting dynamic because you can have a limited number of people playing in the game at one time so inherently that extra bit of performance from one person to the next may have more inherent value.

Plus there is the dynamic that a player (as entertainer) is also suppose to help fill the stands. While winning willaccomplish part of that, in certain cases, a high profile player will as well.

Granted a CEO may be able to bring "his people" into the business arrangement, but that could easily go for the better or the worse. One thing I think we can all agree on is that higher end compensation (top 5 rookies in football, sports, top end executives) have greatly outpaced everyone else and eventhough the house fo cars has come down, it doesn't seem that pay has as well.

I understand that once something is in place it's hard to step back and re-establish a norm and that's part of what the players and owners are coming up against (though a case can certainly be made that football hasn't suffered any financial setback).

 

[lamafist]

Just because you are ignorant of how teams deal with avoiding blackouts doesn't mean they do it. If it is not a big number they do it because they can buy them back at a low rate. If it is too big.

You do point out another thing that owners do, they do approach local businesses, charities, etc. to buy large blocks at a deep discount to avoid the lockout. This will mean loss in revenues, but it at least gets them to be on TV. You don't think these people pay face value in these situations do you? Even then, teams sometimes can't find someone to buy the tickets.

Whether teams buy them themselves or sell them to a third party at a deep discount, it equals a loss in revenue.

...

Yeah, pretty easy because teams love to publicize that they have to buy back tickets. Most of this is done under the radar because teams don't want to publicize this.

...

First, that means some do which goes against your argument. You make it sound like the Bucs were the only ones to ever do it.

Second, I never said they paid face value, but they still have to pay for them. Third, they said the Chargers didn't want to do it because it would have cost them $238k to do so.

You keep telling me this, but as I keep saying, it's just not consistent with what I'm finding when I Google. Even the Time magazine article that you reference portrays the practice as being rare. If I'm wrong, and my google-fu is failing me, than please, by all means, point me in the direction of some source material that will correct me.

Deus has been throwing up red herrings to avoid the facts. Funny, so are you. I see you didn't respond to my post that Tampa sold 130k fewer tickets in 2010 than 2006, St. Louis sold 100k less, and KC sold 80k less. Even Deus' own data showed that the Chargers last year had a near record low attendance.

I don't think Deus was intending to argue that attendance hasn't decreased these past four years -- I think he's pointing out, and I think from some of the things you've said that you actually agree with him, that there are numerous factors other than the economy contributing to the fluctuation in attendance. The thing is, some of them are trends that the league needs to take note of, but others are cyclical, and others are circumstantial. The noise gets amplified when you focus on one particular team at a time, and when you focus on too short a time period.

Certainly, there's been an inevitable drop in attendance due to the economy. That's how things work - the only people whose business didn't take a hit these past few years were lawyers specializing in home foreclosure. But the fact that the NFL not only didn't lose ground in revenue during the first few years of the recession, but actually posted revenue gains of 6 and 9 percent tells us that overall, the NFL has been weathering the recession better than 99% of businesses in America.

Also, many experts think the thing playing in a major factor in causing the startling decline in attendance is the invention and adoption of HDTV. Many people feel it more pleasurable to sit with friends in front of an 60 inch plasma than paying to go to the game. HDTV has hurt a lot entertainment businesses like the movie industry (that is why they are shooting everything in 3D so they can charge $5 more a ticket). There is evidence to support this since they are getting record high ratings for select games on TV and near record low attendance in some stadiums. You kinda argued this too, but this has nothing to do with the economy.

Also, teams who are offering entertainment packages are doing so in desperation to get people to come to the game.

The HDTV effect is what I was referring to when I said that the TV broadcast has overtaken being in the stadium in terms of game-watching experience. Watching on a 50 inch LCD in 1080p with 5 speaker surround, with the redzone channel for when the Pats aren't on, is a completely different beast than watching the Pats on my old 13-inch CRT set with a veritable fish bowl for a screen. You're right, this is going to adversely affect ticket sales...

... and overall be a good thing for the NFL. Stadium attendance is an inherently limited and inefficient source of revenue, and has been gradually marginalizing in comparison to TV throughout the NFL's history. Stadiums are very expensive, can only fit so many people, and there are a lot of costly logistics involved in providing them the things they want to buy. Once you've maxed out your concessaire and vendors' capability to handle volume, packing in more people isn't really worth it.

On TV, you can reach thousands of times the number of people for advertising and marketing purposes by many of the same brands that pay Aramark to sell in stadiums, and you don't have to deal with the logistics of providing accommodations for both the vendor and consumer to do their business. Between the exponential increase in volume and lowered fulfillment costs, there's just tons more value in monetizing a TV audience, so in the end, it's actually a really good thing for the NFL that, as its stadium attendance is dropping, it's also scoring unprecedentedly high TV ratings.

The only reason the owners are all so intent on keeping on investing in squeezing more money out of the stadium is that they don't have to share most of it with the other owners. So the owners who are willing in spending money to make money, like Jerry Jones and Bob Kraft, spend their money on local revenues because there's no stock in spending disproportionately on money they only get 1/32nd of. This is, of course, a pretty inefficient allocation of resources, but one we're stuck with for now.

Incidentally, the movie industry is a good comparison in that the domestic box office, once something like 90% of a film’s gross, is now dwarfed by home video/on-demand, product placement, licensing, merchandising, and the overseas market. Many box office ‘bombs’ end up making their money back overseas, and anything aimed at tweens or kids can end up spinning off half a dozen direct-to-video sequels. The continued improvements in home theater quality have also enabled Hollywood to make money off their back catalog, and this will only increase as digital-only viewing is more adopted, and the overhead pretty much disappears.

In fact, for a long time now, the major movie studios have been itching to do away with Hollywood’s version of the black-out rule, the 90-day window between a film’s theatrical release, and its availability for home viewing. To the studios, a buck is a buck, and they don’t care if home video cannibalizes box office if it increases final gross. Standing in their way, though, is the national association of theater owners, who stand to lose 30 days of their exclusivity if the new Premium Video On Demand service goes live, and a large contingent of prominent directors (James Cameron, Quentin Tarantino, Christopher Nolan, etc.) who have an old-empire attachment to the theatrical movie-watching experience. The fact that the studios are pushing up against the theater chains and their high profile talent in favor of increased VOD availability shows how much less of a future they see in theatrical sales than in home viewing.

The NFL doesn’t have this problem -- the owners are both the studios and theater owners in this analogy, and I don’t think the coaches and players care much about the traditional stadium-going experience. What’s standing in the NFL’s way is, again, that the individual owners get to keep more of their stadium proceeds.

 

[lamafist]

BS! Nothing has significantly changed in terms of what teams offer from 2006 to today. Virtually every family friendly and/or overpriced concession they are offering today were being offered in 2006. You are going to tell me that with 130k fewer tickets sold in 2010 than in 2006, the Bucs still had the same parking and concessions revenue? Come on get real.

As for luxury concessions, again there hasn't been a significant change in these things from 2006 til today.

It's more of a matter of increased adoption. In 'Jerry World' and the New Meadowlands alone, you're reaching 250 million more fans with this horizonally diversified approach to gameday marketing. Then there's Patriot Place, which is kind of brilliant because I don't think any of those proceeds contribute at all to TR.

Also, you don't understand how retail/concession leases work. I have direct experience in my family owning and renting retail/restarant property. The property owner gets more or less rent based on the revenues of the rentees. Even if an owner contracts out to Aramark, they get bonuses for Aramark's revenue overages and may have guaranteed Aramark a certain level of business or they get a break in their fees. Of course it hurts their money. Typically percentage rents are very common when it involved in leasing to a company expected to do signficant business in a location. Most malls no matter the size operate this way. I'm sure most concession leases are the same.

Very interesting, but even so, the concessionaire is certainly taking the brunt of the hit, because they're the ones on the hook when they overstaff and oversupply for lower turn-out.

Again, you are missing my point. The owners aren't arguing that revenues are declining. They are arguing that revenues are not growing at the rate they expected because of the economy. I don't think the new TV contracts signed since 2006 have kicked in yet. All the TV revenue they have been getting is expected. They probably even knew around what they were going to get with the new TVs when they signed the CBA in 2006. Although the TV revenues are growing at a rapid rate, it is growing at an expected rate. What they didn't expect was the startling drop in attendance for many teams that has happened.

If the owners were truly banking on the pre-crisis boom-time of the early and mid-aughts to continue indefinitely, well there's a certain expression about fools and their money. You simply can't expect me to believe that the owners made their deal in 2006 counting on the housing bubble not to burst during the tenure of the next CBA -- especially not considering how many of them earned their fortunes through real estate.

At this rate most expert expect the economy to be in the toilet for a while. It is going to be a very slow recovery. What can happen in a long recession is the population change their habits. If you have any grandparents from the Depression era, they most likely are very frugal and saved a lot. While many baby boomers tend to spend more and save less. A very long recession could mean that a lot of people stop going to the games especially with the home viewing experience being far better than it was 10 years ago.

One thing not spoken about with this decline in ticket sales is that if it lasts long enough, it could have a negative effect on TV revenue. If the local team gets blacked out week after week, it could turn this sport into a regionalized game like MLB has become. MLB has seen a sharp decline in popularity and TV ratings because of it.

What? MLB doesn’t have a blackout policy based on park attendance. People in Tampa can watch the Rays play to a 2/3s empty stadium on local TV -- if the Rays can find any channel interested in carrying the broadcast. The MLB blackout policy has to do with protecting the exclusive rights of local TV stations to the game broadcast -- hence, you can’t watch local games on MLB.tv or through Extra Innings, and the rights of ESPN and FOX for their game packages. MLB’s ratings problem comes from the fact that their teams sell their TV rights individually, rather than collectively, so while the Yankees and Red Sox have their own personal cable channels, the Rays and Royals can’t even convince local TV stations to go through the effort + expense of broadcasting the game for nothing.

What’s more, if the NFL is worried about blackouts affecting the game’s popularity, there’s a very quick fix -- stop blacking games out. The local blackouts are an entirely self-imposed wound, and again, the only reason the owners want to keep the rule around is that the local revenues are mostly un-shared. Meanwhile, getting rid of the blackout rule would tangibly increase the value of the NFL’s real money-winner, the TV rights package.

Also, the NFL negoatiates the CBA on a 4-6 year term. So the current state of the economy is very relevant of how to negotiate. Since this is expected to be a long recovery, the ticket sales will probably not rebound (assuming this drop in ticket sales is based solely on the economy) until after the new CBA expires or at least through most of the life of the new CBA. If by the time the new CBA negotiations come around the ticket sales rebound, the players will have more leverage to get a better deal in the next CBA.

It is funny that you chose to not respond to my post with startling facts of several teams rapid decline in ticket sales.

What I find funny is that you seem to want to focus only on ticket sales -- and even then, mostly on a few particularly screwed up franchises -- when I keep trying to remind you that the NFL, and even some of the franchises you’re focusing on, are still seeing robust revenue growth. Does the NFL really need to be seeing growth in every single revenue stream for the players to keep their 50-50 split? The NFL saw a 6% increase in revenue in 2008, and a 9% increase in revenue in 2009, and these were two worst years for the American economy in decades, and these weren’t even years with any big contract renewals.

We’ve already talked about how TV is the NFL’s real breadwinner, and it’s ratings are off the charts. We haven’t even dipped into the growth potential of new media yet. Sports Marketing guru Pat Coyle has been arguing for years that stadium attendance is not as important as people think, citing some interesting numbers: the Colts’ RCA dome gets 280,000 unique visitors a year. The Colts’ website gets 7.5 million. 55% of NFL fans will never see a game in person. And here’s the big shocker -- watching games accounts for only 38% of an average fan’s NFL media consumption. That means 62% comes from non-game programming, radio, and, the ever growing web presence, including fantasy football. This is where the future of the NFL’s money is -- not in the stadiums. The percentage of profits that ticket sales entails has been steadily shrinking over time, even as the revenue in actual dollars continues to grow. Sooner than you think, having fans come to games will essentially be a loss leader for the NFL, even if stadium attendance keeps rising. And meanwhile, you’re focusing on an attendance drop from an all-time high of 17.4 million, to 17.3.

 

[signbabybrady]

the average NFL player plays four seasons and does irreparable harm to his body during the course of that time.

I agree with pretty much the entirety of your post.

I do wonder a little bit about the portion I quoted above though. I definitely agree they take the risk of irreparable harm but I also think that most players with a short career (4 years or less) probably leave the game in pretty good shape physically with some having relatively minor problems and a minority falling into the irreperable harm category.

Those players with lenghty careers obviously would have a greater chance at irreparable harm but they also having longer periods of earning.

 

[37Harrison]

As for calling the players "greedy"...the average NFL player plays four seasons and does irreparable harm to his body during the course of that time. Unfortunately, over the course of that time, a lot of these players will not have made enough to live off for the rest of the lives. Just go to patscap and look at how many players make between 400-600K. Most of them are given this money too early in their lives to know what to do without, lacking the guidance most of us get, and plenty of them will end up blowing it by the time they are mature enough to realize their mistakes.

Name me another field in which you are rewarded for being the best in the world at what you do by having a short, destructive career, and not being paid enough to live your life out comfortably because of that skill, and ultimately having to find another career. For a lot of NFL players, that's reality.

To me, and I am trying to be as respectful as I can over a message board, is a bunch of excuses.

Your statement "look how many players make between $400-$600K" is kinda ridiculous. I mean you are talking about a person making on average a half a million dollars per year. How is it the owners fault that the players who are college educated men, aren't smart enough to know what they are getting into? They have parents/legal guardians, agents, symposiums, etc., etc... they have enough guidance to help set themselves up for the future. It is none's fault but the player if they choose to ignore lessons learned from past players and advice being given to them from a multitude of resources.

Their stupidity due to youth can not be considered an excuse as to the predicaments they may find themselves in later on down the road.

The players don't have to play this game, they don't have to get into a "short, destructive career." You see, this is America and that is their choice. They can take their degrees and have a less "destructive career" somewhere else. It is a trade off they are making and they are old enough to be bound by their choices good or bad.

Your argument shows the inherent problem with the younger players, what in the world makes you think that more money will solve this? It will only allow them to blow more money and be in the same situation as they are in now if they and future players don't learn how to manage their money more effectively or have the league step in and make a certain % of their earnings go into some sort of savings account/ira/bond/whatever in which they can't draw from for a certain period of time without penalty.

Look there is no easy solution to this but each side has a valid argument. I just happen to agree more (notice I didn't say completely) with the owners.

 

[Rob0729]

It's more of a matter of increased adoption. In 'Jerry World' and the New Meadowlands alone, you're reaching 250 million more fans with this horizonally diversified approach to gameday marketing. Then there's Patriot Place, which is kind of brilliant because I don't think any of those proceeds contribute at all to TR.



Very interesting, but even so, the concessionaire is certainly taking the brunt of the hit, because they're the ones on the hook when they overstaff and oversupply for lower turn-out.



If the owners were truly banking on the pre-crisis boom-time of the early and mid-aughts to continue indefinitely, well there's a certain expression about fools and their money. You simply can't expect me to believe that the owners made their deal in 2006 counting on the housing bubble not to burst during the tenure of the next CBA -- especially not considering how many of them earned their fortunes through real estate.


What? MLB doesn’t have a blackout policy based on park attendance. People in Tampa can watch the Rays play to a 2/3s empty stadium on local TV -- if the Rays can find any channel interested in carrying the broadcast. The MLB blackout policy has to do with protecting the exclusive rights of local TV stations to the game broadcast -- hence, you can’t watch local games on MLB.tv or through Extra Innings, and the rights of ESPN and FOX for their game packages. MLB’s ratings problem comes from the fact that their teams sell their TV rights individually, rather than collectively, so while the Yankees and Red Sox have their own personal cable channels, the Rays and Royals can’t even convince local TV stations to go through the effort + expense of broadcasting the game for nothing.

What’s more, if the NFL is worried about blackouts affecting the game’s popularity, there’s a very quick fix -- stop blacking games out. The local blackouts are an entirely self-imposed wound, and again, the only reason the owners want to keep the rule around is that the local revenues are mostly un-shared. Meanwhile, getting rid of the blackout rule would tangibly increase the value of the NFL’s real money-winner, the TV rights package.



What I find funny is that you seem to want to focus only on ticket sales -- and even then, mostly on a few particularly screwed up franchises -- when I keep trying to remind you that the NFL, and even some of the franchises you’re focusing on, are still seeing robust revenue growth. Does the NFL really need to be seeing growth in every single revenue stream for the players to keep their 50-50 split? The NFL saw a 6% increase in revenue in 2008, and a 9% increase in revenue in 2009, and these were two worst years for the American economy in decades, and these weren’t even years with any big contract renewals.

We’ve already talked about how TV is the NFL’s real breadwinner, and it’s ratings are off the charts. We haven’t even dipped into the growth potential of new media yet. Sports Marketing guru Pat Coyle has been arguing for years that stadium attendance is not as important as people think, citing some interesting numbers: the Colts’ RCA dome gets 280,000 unique visitors a year. The Colts’ website gets 7.5 million. 55% of NFL fans will never see a game in person. And here’s the big shocker -- watching games accounts for only 38% of an average fan’s NFL media consumption. That means 62% comes from non-game programming, radio, and, the ever growing web presence, including fantasy football. This is where the future of the NFL’s money is -- not in the stadiums. The percentage of profits that ticket sales entails has been steadily shrinking over time, even as the revenue in actual dollars continues to grow. Sooner than you think, having fans come to games will essentially be a loss leader for the NFL, even if stadium attendance keeps rising. And meanwhile, you’re focusing on an attendance drop from an all-time high of 17.4 million, to 17.3.

I don't have time to go point by point right now, but you have kept on asking to show any evidence of negative effect on how the economic landscape has changed that the owners weren't expecting. The Bucs have lost about $8 million plus worth of revenue due to lost ticket sales. That is significant.

Again, you still don't get that that is significant and unexpect. TV revenues were expected. Let's put it this way, your salary is $200k and you get an an annual pay raise of 8-10% a year plus you own a rental property that gives you $20k a year. You budget your finances (car payment, mortgage, retirement savings, vacations, home improvements, etc) for the next ten years. Say three years from now the tenent of your rental property leaves and that income goes away and you see no prospective tenant in the near future, you have to significantly change your budget eventhough you are making $250-260k a year. Twenty thousand is nothing compare to $260 million, but it enough to significant enough that unless your budget was set that all or most of that money was going to savings, that you would have to revise your lifestyle. That is what is happening to the owners.

As for the ticket sales being cyclical. It is irrelevant. The next CBA will most likely expire between 2015 and 2017. That is a relatively short period and there is no guarantee that the ticket sales rebound during the life of the next CBA. The life of a CBA is so short in the NFL that you have to deal with what you expect in the short term and not the long term.

 

[BradyManny]

To me, and I am trying to be as respectful as I can over a message board, is a bunch of excuses.

Your statement "look how many players make between $400-$600K" is kinda ridiculous. I mean you are talking about a person making on average a half a million dollars per year.

But again - they are the most skilled at what they do - on the planet. The occupation that they are skilled at has a very short shelf-life, unfortunately for them. For most of them, they are making half a mill before taxes, for a couple years. That's not enough to live off even if they were smart with their money.

As for youth and knowing what to do with their money - if the majority of these guys are broke after their career is over, at some point you have to cast some blame on the system and not just the players within it. A lot of these players grow up in situations which don't lend themselves to financial stability once they get that first paycheck.

But that's besides the point. The previous poster was portraying the fans as spoiled millionaires, which is a very inaccurate depiction for the vast majority of players.

Their stupidity due to youth can not be considered an excuse as to the predicaments they may find themselves in later on down the road.

We're talking about 20 or 21 year olds being handed big checks for the first time in their lives. If something goes wrong in that situation, I think blame needs to be placed to more than just the kid straight out of college.

Put this way, if you were asked to make the bulk of your life's income over your life in the first 1000 days out of college life, how would you have fared? Obviously, it's going to go awry at times.

The players don't have to play this game, they don't have to get into a "short, destructive career." You see, this is America and that is their choice. They can take their degrees and have a less "destructive career" somewhere else. It is a trade off they are making and they are old enough to be bound by their choices good or bad.

Point to where I say otherwise. I'm merely trying to say most players aren't "spoiled". Is Eric Moore or Marques Murrell or Sergio Brown or Rich Ohrnberger "spoiled", "greedy" and just living the life of luxury compared to us mere commoners? I mean, come on. That's the average NFL player right there. Not Brady, not Manning, not Brees.

I'm simply saying that their career paths are not as envious as the average NBAer or MLBer - and to characterize the NFL players as greedy seems outrageous when the bulk of them will probably end up relying on their career after football just as much as you or I do in our careers.

Your argument shows the inherent problem with the younger players, what in the world makes you think that more money will solve this? It will only allow them to blow more money and be in the same situation as they are in now if they and future players don't learn how to manage their money more effectively or have the league step in and make a certain % of their earnings go into some sort of savings account/ira/bond/whatever in which they can't draw from for a certain period of time without penalty.

Look there is no easy solution to this but each side has a valid argument. I just happen to agree more (notice I didn't say completely) with the owners.

Again, never said that more money would solve the problem, never even explicitly said the players should have more money. I just said that the typical spoiled athlete is not a label the typical NFL player should have.

Don't get me wrong, I'm not trying to say these guys' lives or awful or filled with unenviable strife and sorrow. Far from it. But just take a look at NFL roster and explain how the majority of them should be labelled as spoiled, overpaid or greedy. If any of the major sports has a higher percentage of guys on the roster that the average fan should relate to, its NFL players. Most of these guys are going to go out and work the same jobs we do for the rest of their lives once they are done playing the game.

Players in other sports which a) have higher average salaries b) longer careers c) much smaller rosters d) less taxing careers, physically might all fall into the greedy athlete stereotype.

 

[PatsFanSince74]

Along with not being able to get along for 2,000 years? I'm sorry this is just football, not politics.

Not politics? This is 95% politics. The Players and Owners are fighting over public opinion. They're fighting through the media and with strategic leaks from each side. They're fighting in the courts. This is politics at its best or worst, depending on your perspective.

It doesn't matter whether the argument's been going on for 2000 years or 60 years, the emotions are intense and the stakes, as perceived by the participants, are very high. You bet it's politics.

 

[MoLewisrocks]

I don't even know where to start with this post.

That about sums all his posts up.

 

[Rob0729]

You keep telling me this, but as I keep saying, it's just not consistent with what I'm finding when I Google. Even the Time magazine article that you reference portrays the practice as being rare. If I'm wrong, and my google-fu is failing me, than please, by all means, point me in the direction of some source material that will correct me.

Again, teams don't advertise that they buy them back. But why would there be a system where teams can buy back tickets for 34 cents on the dollar to avoid a blackout if no teams ever buys back tickets.

I don't think Deus was intending to argue that attendance hasn't decreased these past four years -- I think he's pointing out, and I think from some of the things you've said that you actually agree with him, that there are numerous factors other than the economy contributing to the fluctuation in attendance. The thing is, some of them are trends that the league needs to take note of, but others are cyclical, and others are circumstantial. The noise gets amplified when you focus on one particular team at a time, and when you focus on too short a time period.

Certainly, there's been an inevitable drop in attendance due to the economy. That's how things work - the only people whose business didn't take a hit these past few years were lawyers specializing in home foreclosure. But the fact that the NFL not only didn't lose ground in revenue during the first few years of the recession, but actually posted revenue gains of 6 and 9 percent tells us that overall, the NFL has been weathering the recession better than 99% of businesses in America.

Again, the reasons why the drop is irrelevant. My point is that it was a significant and unexpected drop that is costing some owners millions of dollars a year. They didn't know about these problems when the CBA was agreed to.

The HDTV effect is what I was referring to when I said that the TV broadcast has overtaken being in the stadium in terms of game-watching experience. Watching on a 50 inch LCD in 1080p with 5 speaker surround, with the redzone channel for when the Pats aren't on, is a completely different beast than watching the Pats on my old 13-inch CRT set with a veritable fish bowl for a screen. You're right, this is going to adversely affect ticket sales...

And the owners didn't realize this effect in 2006 because plasma TVs were just starting to come down to affordable prices. Again

... and overall be a good thing for the NFL. Stadium attendance is an inherently limited and inefficient source of revenue, and has been gradually marginalizing in comparison to TV throughout the NFL's history. Stadiums are very expensive, can only fit so many people, and there are a lot of costly logistics involved in providing them the things they want to buy. Once you've maxed out your concessaire and vendors' capability to handle volume, packing in more people isn't really worth it.

LOL! The Jets/Giants and Cowboys each spend over a billion dollars on their stadiums because they look pretty on TV. They could have spent a fraction of that to create a stadium that sat 3-4k people and look just as pretty on TV. Sorry, ticket sales and all that goes into going into playing the game is a significant part of the game. The Pats had an average attendance of 68,752 a game (14th most in the league). Their average ticket price was $118 (not including club seats and luxury boxes). So including preseason games (not not including playoffs or luxury seating), tickets sales accounted for $81.13 million in revenue for the Pats and their opposing teams. That doesn't count parking, concessions, or any other revenue generated during the game. If each team is getting about $70-90 million from ticket sales, it is far more significant part of revenue than you make it out to be.

On TV, you can reach thousands of times the number of people for advertising and marketing purposes by many of the same brands that pay Aramark to sell in stadiums, and you don't have to deal with the logistics of providing accommodations for both the vendor and consumer to do their business. Between the exponential increase in volume and lowered fulfillment costs, there's just tons more value in monetizing a TV audience, so in the end, it's actually a really good thing for the NFL that, as its stadium attendance is dropping, it's also scoring unprecedentedly high TV ratings.

Complete and utter BS. Teams don't spend hundreds of million or billions on stadiums if it is better for them to have less people in the stadium and drive up the TV ratings. Besides, the drop in attendance is growing faster than the increase in TV ratings.

The only reason the owners are all so intent on keeping on investing in squeezing more money out of the stadium is that they don't have to share most of it with the other owners. So the owners who are willing in spending money to make money, like Jerry Jones and Bob Kraft, spend their money on local revenues because there's no stock in spending disproportionately on money they only get 1/32nd of. This is, of course, a pretty inefficient allocation of resources, but one we're stuck with for now.

Huh? The 2006 CBA has virtually everything that each team makes at the stadium shared with the entire league. The Pats have Patriots Place, but that is unique for the league.

Incidentally, the movie industry is a good comparison in that the domestic box office, once something like 90% of a film’s gross, is now dwarfed by home video/on-demand, product placement, licensing, merchandising, and the overseas market. Many box office ‘bombs’ end up making their money back overseas, and anything aimed at tweens or kids can end up spinning off half a dozen direct-to-video sequels. The continued improvements in home theater quality have also enabled Hollywood to make money off their back catalog, and this will only increase as digital-only viewing is more adopted, and the overhead pretty much disappears.

You clearly don't understand the movie industry. They are petrified right now of their industry collapsing like the music industry has. Why do you think every movie is in 3D now? Because they are desperate for revenue and they know they can charge an extra $5 a ticket. Movies need huge opening weekends or they are bombs because unlike in the past, a movie can only last near the top in revenue (with a few exceptions) for a few weeks. Back in the 70s and 80s, movies like Star Wars and ET could run for months making money. The movie industry is an example of an industry hanging on by a thread waiting for the whole thing to unravel.

In fact, for a long time now, the major movie studios have been itching to do away with Hollywood’s version of the black-out rule, the 90-day window between a film’s theatrical release, and its availability for home viewing. To the studios, a buck is a buck, and they don’t care if home video cannibalizes box office if it increases final gross. Standing in their way, though, is the national association of theater owners, who stand to lose 30 days of their exclusivity if the new Premium Video On Demand service goes live, and a large contingent of prominent directors (James Cameron, Quentin Tarantino, Christopher Nolan, etc.) who have an old-empire attachment to the theatrical movie-watching experience. The fact that the studios are pushing up against the theater chains and their high profile talent in favor of increased VOD availability shows how much less of a future they see in theatrical sales than in home viewing.

How long have they been waiting to shorten the time between a movie is shown first run and it going to DVD? If Hollywood had its' way, a trillion years. Hollywood hates that there is a short window between a movie being first run and it going to DVD and on demand. They have been trying to halt that (hence why you can't get it at Netflix or RedBox when the movie is release on DVD for at least a month for most titles). If Hollywood had their way, the movie would be in the theaters for months and the movie wouldn't get released on DVD for a year. Unfortunately, short run cycles of movies in the theaters because the glut of movies and short attention span of the public have forced them to adapt.

The NFL doesn’t have this problem -- the owners are both the studios and theater owners in this analogy, and I don’t think the coaches and players care much about the traditional stadium-going experience. What’s standing in the NFL’s way is, again, that the individual owners get to keep more of their stadium proceeds.

Huh? First, I guarantee you most players get off on the crowd. You telling that a guy like Ocho-Cinco would just be as happy playing in an empty stadium? Most players use the energy of their home crowd to get them pumped. Also, coaches use crowd noise to their advantage.

Second of all, virtually everything related to the stadium is revenue shared in one way or another as I said. The players get 60% of virtually all revenue generated from the games. Small market teams get assistance from big market teams in this way. So playing to empty stadiums would hurt the player and the owners.

I will respond to your other post later.

 

[Rob0729]

It's more of a matter of increased adoption. In 'Jerry World' and the New Meadowlands alone, you're reaching 250 million more fans with this horizonally diversified approach to gameday marketing. Then there's Patriot Place, which is kind of brilliant because I don't think any of those proceeds contribute at all to TR.

First, Patriot Place is an one in 32 type of thing. No other team has such a thing. Most people feel that it has been a finacial burden to Kraft, not a benefit thus far.

Second, where did you get that any team got 250 million more fans? How many people do you think watch a game in this country every weekend? The US population is roughly 310 million. So really think 80.6% of the country is watching football every Sunday or even any given game?

Very interesting, but even so, the concessionaire is certainly taking the brunt of the hit, because they're the ones on the hook when they overstaff and oversupply for lower turn-out.

And this is different than any other business?

If the owners were truly banking on the pre-crisis boom-time of the early and mid-aughts to continue indefinitely, well there's a certain expression about fools and their money. You simply can't expect me to believe that the owners made their deal in 2006 counting on the housing bubble not to burst during the tenure of the next CBA -- especially not considering how many of them earned their fortunes through real estate.

Come on! First, no one in 2006 thought the recession would be this long and brutal. Certainly, they didn't think there could be a double dip recession potentially in 2012 or even later this year.

What? MLB doesn’t have a blackout policy based on park attendance. People in Tampa can watch the Rays play to a 2/3s empty stadium on local TV -- if the Rays can find any channel interested in carrying the broadcast. The MLB blackout policy has to do with protecting the exclusive rights of local TV stations to the game broadcast -- hence, you can’t watch local games on MLB.tv or through Extra Innings, and the rights of ESPN and FOX for their game packages. MLB’s ratings problem comes from the fact that their teams sell their TV rights individually, rather than collectively, so while the Yankees and Red Sox have their own personal cable channels, the Rays and Royals can’t even convince local TV stations to go through the effort + expense of broadcasting the game for nothing.

MLB is a regional sport because of their lack of revenue sharing or cap floor. I never said that MLB became regionalized because of the same reason the NFL might, but the end results could be similiar. I am sorry if I wasn't clear on that.

What’s more, if the NFL is worried about blackouts affecting the game’s popularity, there’s a very quick fix -- stop blacking games out. The local blackouts are an entirely self-imposed wound, and again, the only reason the owners want to keep the rule around is that the local revenues are mostly un-shared. Meanwhile, getting rid of the blackout rule would tangibly increase the value of the NFL’s real money-winner, the TV rights package.

Stop blacking out game? So the owners can lose tens of millions of dollars more in revenues because many stadiums would have 15-20k people in the stands. The blackout rules are both a blessing and a curse for a team. They need them because they need to keep people coming to the games, but many stadiums still have trouble filling the stadiums anyway.

Again, you get rid of the people going to the stadiums and the players suffer too. They get 60% of most of what revenue is generated from game day.

What I find funny is that you seem to want to focus only on ticket sales -- and even then, mostly on a few particularly screwed up franchises -- when I keep trying to remind you that the NFL, and even some of the franchises you’re focusing on, are still seeing robust revenue growth. Does the NFL really need to be seeing growth in every single revenue stream for the players to keep their 50-50 split? The NFL saw a 6% increase in revenue in 2008, and a 9% increase in revenue in 2009, and these were two worst years for the American economy in decades, and these weren’t even years with any big contract renewals.

As I pointed out, it is the rate of the revenue growth vs. the expected revenue growth. The owners expected the revenue to grow at faster rate.

We’ve already talked about how TV is the NFL’s real breadwinner, and it’s ratings are off the charts. We haven’t even dipped into the growth potential of new media yet. Sports Marketing guru Pat Coyle has been arguing for years that stadium attendance is not as important as people think, citing some interesting numbers: the Colts’ RCA dome gets 280,000 unique visitors a year. The Colts’ website gets 7.5 million. 55% of NFL fans will never see a game in person. And here’s the big shocker -- watching games accounts for only 38% of an average fan’s NFL media consumption. That means 62% comes from non-game programming, radio, and, the ever growing web presence, including fantasy football. This is where the future of the NFL’s money is -- not in the stadiums. The percentage of profits that ticket sales entails has been steadily shrinking over time, even as the revenue in actual dollars continues to grow. Sooner than you think, having fans come to games will essentially be a loss leader for the NFL, even if stadium attendance keeps rising. And meanwhile, you’re focusing on an attendance drop from an all-time high of 17.4 million, to 17.3.

There are other revenues streams to generate money and most smart owners do it, but ticket sales and what go with it is still a major part of how the owners generate revenue. You can dismiss it if you want but each team makes over $100 million a year in revenue from ticket sales, concessions, parking, in stadium marketing deals, etc. It is a huge piece of the pie. Not as big as TV, but not insignificant either.

 

[lamafist]

I don't have time to go point by point right now, but you have kept on asking to show any evidence of negative effect on how the economic landscape has changed that the owners weren't expecting.

No I don't. I keep asking for information specifically regarding the purportedly widespread practice of NFL owners buying out tickets to prevent blackouts.

The Bucs have lost about $8 million plus worth of revenue due to lost ticket sales. That is significant.

Again, you still don't get that that is significant and unexpect. TV revenues were expected. Let's put it this way, your salary is $200k and you get an an annual pay raise of 8-10% a year plus you own a rental property that gives you $20k a year. You budget your finances (car payment, mortgage, retirement savings, vacations, home improvements, etc) for the next ten years. Say three years from now the tenent of your rental property leaves and that income goes away and you see no prospective tenant in the near future, you have to significantly change your budget eventhough you are making $250-260k a year. Twenty thousand is nothing compare to $260 million, but it enough to significant enough that unless your budget was set that all or most of that money was going to savings, that you would have to revise your lifestyle. That is what is happening to the owners.

As for the ticket sales being cyclical. It is irrelevant. The next CBA will most likely expire between 2015 and 2017. That is a relatively short period and there is no guarantee that the ticket sales rebound during the life of the next CBA. The life of a CBA is so short in the NFL that you have to deal with what you expect in the short term and not the long term.

Your analogy doesn't really work for a number of reasons. First off is the matter of scale. Someone expecting to make a total of $280 in a year who ends up making $260 might have to put off a vacation or wait another year before owning their house outright. Someone making $28k a year who suddenly finds themselves out $2000 might have to choose between making rent and having health insurance.

You also aren't giving your hypothetical individual credit for budgeting so as to allow for inevitable ebbs and flows in earnings. According to Forbes, the Bucs' gate receipts dropped $4 million between '05 and '06, despite the absence of a recession or overall diminishing league attendance to explain it, which is the same amount they have them diminishing '08 to '09. Overall, in the five year period from '04 to '09, gate receipts grew from $46 million to $57 million, including club seats. Even if that's a little off what the Glazers were projecting, that's still decent growth, and something tells me that the Glazers weren't budgeting under the assumption that the boom years would last forever.

Finally, you're two-variable analogy naturally leaves out a lot of variables. It's not like every other revenue stream but gate is predictable. Remember that TV revenues are also shrinking in terms of percentage of the league's total revenue. Over the past ten years, the revenue stream that has grown the fastest for the league has been licensing and marketing, both in terms of shared and retained revenue. Although the publicly owned Packers operate differently than the rest of the league, their take in terms of shared revenue should be pretty representative, and they went from making $4.7 million from NFL licensing properties in 2002 to $45.8 million in 2009.

And that's just the shared revenue from licensing. Ever since Jerry Jones' lawsuit in '95, franchises have been able to sign individual licensing deals, meaning that now the Buccaneers can get paid by Anheuser-Busch, Ford, Hess, Coca Cola, and Publix super markets just for the right to say "official ____ of the Tampa Bay Buccaneers." In many cases, the local licensing revenues have grown even faster than the shared ones. Basically, licensing revenues went from a nice little bonus less than 10 years ago to the NFL's main cash cow. How's that for "unexpected?"

We're already talking ~$90 million in annual revenues for the Packers that barely existed 10 years ago, and we haven't even touched on the barely tapped marketing possibilities of new media, which comprise an ever-growing portion of the average fan's NFL consumption. Or what's going to happen when the NFL gets its web broadcasting rights back from DirecTV, who've completely failed to develop them.

 

[Rob0729]

No I don't. I keep asking for information specifically regarding the purportedly widespread practice of NFL owners buying out tickets to prevent blackouts.

I don't have time to answer the others now, but I will answer this.

First, I am talking what you been asking for a while now not just this thread. You constantly ask for proof of a negative impact of the economy or over the last few years.

Second, you obviously didn;t look hard to try to find proof of teams buying tickets to avoid the lockout:

Both the Giants and Jets bought tickets although how many we don't know (and don't say they just promised to because both had over 12k season left available with less than a week to go before the game and it doubtful either sold every ticket):

Owner will buy tickets to avoid Jets' blackout - NYPOST.com

The Bengals bought tickets:

According to the team Local 12 and Cintas led the way in helping ensure the blackout would be lifted, and the Bengals purchased tickets for distribution to local military families. Additionally, Time Warner Cable and AAA Allied Group also assisted.

Blackout lifted for Dolphins game | Bengals Blog

The Rams did it in 2009

Rams buy tickets to avoid blackout - NFC West Blog - ESPN

The Bucs did in 2009, but lied about and said they didn't until they finally came clean in 2010

Bucs finally admit they bought unsold tickets in 2009 | ProFootballTalk

This is also evidence that teams do not want to admit when they engage in this practice.

Lastly, I didn't say it was widespread. I said it happens. I didn't say it happens every week. I didn't say every team does it. But it does happen. I found four examples in the last two seasons.

 

[jsull87]

Maybe we can work out some kind of CEO pay scale as forms of unit of work. My wife the other day was horrified a CEO was making 18 million dollars. i got outhe calculator and it was close to 8654 dollars an hour.

Now if you consider a low level worker at $10 an hour, you have to convince me this guy brings enough contacts and leverage to the table to make up for 865 workers at that rate.

I'll think you'll find that CEO doesn't do the usual 9-5. My mates dad is a CEO in singapore. He works 6-7 day weeks, his family lives in australia, when on holidays he is still working and you can bet your bottom dollar if that CEO is making that mount of money, he is making decisions for that company weekly+ that are worth 10X that. So i don't think this discussion should be "all executives bad, all joe six pack's good".

 

[lamafist]

LOL! The Jets/Giants and Cowboys each spend over a billion dollars on their stadiums because they look pretty on TV. They could have spent a fraction of that to create a stadium that sat 3-4k people and look just as pretty on TV. Sorry, ticket sales and all that goes into going into playing the game is a significant part of the game. The Pats had an average attendance of 68,752 a game (14th most in the league). Their average ticket price was $118 (not including club seats and luxury boxes). So including preseason games (not not including playoffs or luxury seating), tickets sales accounted for $81.13 million in revenue for the Pats and their opposing teams. That doesn't count parking, concessions, or any other revenue generated during the game. If each team is getting about $70-90 million from ticket sales, it is far more significant part of revenue than you make it out to be.

Forbes has the Pats' gate receipts at $90 million including luxury seating. They are one of 3 NFL teams to make more than $60 million from ticket sales, including luxury seating. And we're not talking about teams losing ALL of this revenue, or anywhere near it. We're talking a league-wide 5% loss in ticket sales from the zenith in '07.

Complete and utter BS. Teams don't spend hundreds of million or billions on stadiums if it is better for them to have less people in the stadium and drive up the TV ratings. Besides, the drop in attendance is growing faster than the increase in TV ratings.

Teams spend the money on stadiums because the revenue streams aren't shared and because it costs a lot more to monetize stadium attendance than it does TV audience.

Huh? The 2006 CBA has virtually everything that each team makes at the stadium shared with the entire league. The Pats have Patriots Place, but that is unique for the league.

You are very mistaken. The 2006 CBA folded local revenues into the pool called "Total Revenue" that determines the salary cap, but left them retained by their respective teams. The only adjustment to revenue sharing was the supplemental sharing agreement that Kraft engineered, which was, predictably, slanted in favor of high-revenue teams.

This is the very core of the problem: since 2006, local revenues made by teams like Dallas and New England drive up the salary cap, but are not significantly shared with other teams. Basically, with the revenue disparity rising, the "median" NFL team cannot afford the salary cap that the average (mean) NFL team can.

You clearly don't understand the movie industry. They are petrified right now of their industry collapsing like the music industry has. Why do you think every movie is in 3D now? Because they are desperate for revenue and they know they can charge an extra $5 a ticket. Movies need huge opening weekends or they are bombs because unlike in the past, a movie can only last near the top in revenue (with a few exceptions) for a few weeks. Back in the 70s and 80s, movies like Star Wars and ET could run for months making money. The movie industry is an example of an industry hanging on by a thread waiting for the whole thing to unravel.

How long have they been waiting to shorten the time between a movie is shown first run and it going to DVD? If Hollywood had its' way, a trillion years. Hollywood hates that there is a short window between a movie being first run and it going to DVD and on demand. They have been trying to halt that (hence why you can't get it at Netflix or RedBox when the movie is release on DVD for at least a month for most titles). If Hollywood had their way, the movie would be in the theaters for months and the movie wouldn't get released on DVD for a year. Unfortunately, short run cycles of movies in the theaters because the glut of movies and short attention span of the public have forced them to adapt.

I cover the entertainment industry for a living. I understand the movie business. You are confusing "Hollywood," viz. the movie studios and production companies, with the National Organization of Theater Owners, whose members like Regal and AMC are located in places like Tennessee and Missouri. (Even Hollywood Theaters isn't located in California.) The theater owners care about prolonging the window of the first run theatrical release; the studios are ambivalent.

When home video first became worth talking about in the 80's, the idea was that you maximized revenues by delaying the video release a year to get as many people as possible to see it in the theaters first. Theater chains could afford to pay way more than video stores. That stopped being the case in the 90's, when home video grosses started eclipsing the box office, and suddenly Blockbuster, and noadays Netflix, Apple, Amazon, Time Warner cable and Cablevision all have deeper pockets than the theaters chains.

The studios still want to be able to double-dip with both a theatrical premiere and a video premiere, but whereas in the 80's, they didn't care about maximizing initial home video sales, these days, it's just as important as the box office debut. With the possible exception of Avatar, the marketing budget is always the largest expenditure for a Hollywood release. Waiting a full year after theatrical release means you're essentially trying to build up marketing momentum from a standstill again. A while back, the studios did the math, and decided the ideal window where the degree to which you were going to cannibilize the theatrical run vs. maintaining buzz for the video release, was around 90 days for most movies not expected to get an awards-season bump.

Like the NFL stadium experience, HDTVs mean that the theatrical release now has less and less of a a natural advantage over home viewing. Hence the studios deciding to try out Premium Video on Demand in limited release last April, wherein people can pay $30 dollars to watch a movie only 60 days after its premiere. There's already buzz that the studios aren't satisfied and are contemplating pushing it up to 30 days sooner rather than later. Hence the highly publicized push-back from NATO and a large contingent of prominent directors.

The problem is that the theater chain owners don't have the money to back up their talk -- if they could afford to pay the studios what it's worth to delay video release, they would, but it's not even close, and the studios are less and less interested in fighting the inevitable.

Huh? First, I guarantee you most players get off on the crowd. You telling that a guy like Ocho-Cinco would just be as happy playing in an empty stadium? Most players use the energy of their home crowd to get them pumped. Also, coaches use crowd noise to their advantage.

Second of all, virtually everything related to the stadium is revenue shared in one way or another as I said. The players get 60% of virtually all revenue generated from the games. Small market teams get assistance from big market teams in this way. So playing to empty stadiums would hurt the player and the owners.

I will respond to your other post later.

Again, we're talking about a less than 5% drop in attendance during the worst of the recession, not "empty stadiums." An NFL stadium is still on average at 95% of capacity on gameday, and the teams that consistently put forward a quality product aren't having trouble selling tickets.