Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look like

[upstater1]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

You apparently slept through the CBA of 2006. There was a paradigm change effected with that agreement whereby because owners changed the definition of total revenue for their own internal revenue sharing formula to include things like luxury boxes, etc. And the union threatened to strike unless their percentage remained essentially in tact while based on that new definition of total revenue. Owners undershot the mark in exempting $1B from the calculation. Turns out in this economy they need closer to $2B exempted in order to cover all their costs beyond player salaries and still have capital to improve facilities and potentially expand markets. That is why the cap went from $85M in 2005 to $128M in 2009...while revenues flattened out.


That may be BUT the fact is, the union still believes the owners are not reporting revenues. Did you miss the part last week about the union asking to see the actual figures and being rebuffed? also, the NFL signed a new TV deal in the interim. That allowed for a huge revenue expansion.

There won't be a "new" franchise for LA unless the CBA gets retooled. There may be a franchise sold off to someone who can manage to get a stadium built in LA, but that money will go to the owner who opts out of a small market because he can't make a profit.

I seriously doubt this. Any franchise that leaves for LA will not be allowed to operate in that market without a fee. The owner who moves will owe his partners big bucks to move there. You may see a contraction/expansion scenario first before they'd ever let someone with a $800 million franchise make half a billion overnight just by moving. Won't happen.

I believe the most recent franchise sales topped the $800K valuation and most didn't include stadiums. Snyder's did although he had to assume an additional $190M in debt service to acquire what then was the a recently completed 90K seat facility. And he added $55M in improvements to that facility in just the first year he operated it. Few NFL teams actually have any assets, their "valuations" are a house of cards based primarily on the popularity of their product as marketed by the 32 team league entity. And in fact there are only a handful of teams still owned by founding families and many of those are in deep financial trouble that will only be exacerbated when guys like Ralph pass and his heirs have to sell out because they can't afford to pay the inheritence tax to remain in control of them.

Ralph's family paid $20k for that franchise. You think they can't afford to pay an inheritance tax? Um, if I have $800 million in my pocket, I think I can afford to pay the tax on it.

Just before selling the Doofins to Ross, Wayne made $250M in improvements to the stadium he was also selling along with the team. Ross is paying for those on top of what he paid for the team. His present debt is greater than his present teams Forbes valuation... Heck, even Lerner paid $540M for the Browns just a ago. And McNair is paying off $700M he paid to acquire the expansion Texans. Most of these teams - with the exception of the top 3-4 - are working off a revenue stream in the $230M vacinity. Pay the cap $128M and then fund upwards of $30-40M in cash over cap (bonus $) and pay for coaching and administrative help and travel and practice facilities and scouting staff and benefits for everyone and then pay the debt service on your stadium if you own one or the money you borrowed to buy the team and make necessary capital improvements to your facilities and then if you're in the top 16 kick in a chunk to help carry those who aren't and tell me you wouldn't hope to make some sort of return on your investment beyond the house of cards paper valuation some magazine bestows on it...

The Giants and JETS franchises are valued at roughly $1.1B. Each ownership just borrowed almost $700M EACH to finance their share of a new stadium that at least one of them can't sell the PSL's to...and neither of them has found a naming rights sponsor for... And for the first time in a long time Forbes team valuations were either flat or down for the vast majority of franchises in 2009. They may not all be losing money just yet, but they see the potential to as growing payroll costs outstrip revenue growth and that is what they are trying to avoid (because of the tenuous house of cards nature of the league's franchise values being closely tied to the perception it is basically a license to print $$$). The NBA is losing money, and will possibly go out on strike next season as a result.

All it would take for the house of cards to come tumbling down is one or two franchises to go under and either sell at fire sale prices or fail to find any takers and values for all the other franchises would begin to plummet across the board. The haves can't exist unless the have nots can stay in business.

Some of the owners who got in late may have overpaid... Some work may need to be redone, but the vast majority of owners--like the Wilsons--are doing great. Ross, McNair, Woodhead, maybe they are having difficulties. The others, not so much.

 

[upstater1]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

One other thing. The owners the last time went ahead with the CBA precisely because they were fighting among themselves about the salary cap and redistributing money to the small market franchises. They didn't have the votes among themselves to change things up.

That's a key ingredient to this mess. Why? Because they can't stomach the idea that owners who are paying a lot of money for their own stadiums in big markets are also shelling out $$$ to Ralph Wilson, the Hunts, maybe the Rooney's and Browns too. Those old-time owners are filthy rich, but they get league welfare to help them run their franchises. Without that money, those teams can't pay a payroll near the cap. That's the problem right there.

Think about what happens if the owners can't grab player money and put it toward the owners in small markets? That naturally makes the bigger markets worth less because anyone who buys a new franchise has to subsidize the other franchises. That hurts the business model and puts extreme pressure on the idea of a salary cap and redistribution. The owners are almost at war more than the players. But that's what happens when you came into the league after the men who actually built it. Ralph Wilson has been around long enough so that he refuses to give you a dime. It's his money, that's how he thinks of it. So where do you go to keep up the value of your franchise? The players.

That's why they did the last CBA in a hasty fashion, because the owners had NOT worked out their differences, and the NFL was unprepared for the owner anger among one another. They had no PLAN B to take it out on the players instead. If Wilson, the Browns, the Hunts, etc., were out of football in 2006, right now we would have a much lesser amount of revenue sharing among teams, and the players would be getting 60% still.

 

[MoLewisrocks]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

The union is claiming that the NFL is hiding revenues. They keep asking the NFL to show us the books, and the NFL trots out Green Bay. Why do they want to see the books if all revs are included?

Lastly, I can't think of what older stadiums need to be rebuilt. Which ones are you talking about? I mentioned San Diego and Minnesota, can't think of any others. The entire Midwest is brand new. The only old stadiums I can think of are Oakland, Buffalo, KC, and those stadiums are in limited markets. no point in redoing them since you're not going to attract more luxury box seating there.

Lastly, the owners are at fault if they believe this is an industry that needs constant expansion. They should be happy with increases in yearly revenues and TV shares. They need to think more like Coca-Cola than Google. The frontiers are limited. Do what you do well and shut up about it. Don't destroy the game for more $$$. That's exactly what they are doing. Why?

What's going on right now is similar to what has happened in the housing market. With the financial crunch, and there being less money to lend out, owners have seen the values of their franchises implode. Those values were given a premium because year-over-year NFL revenues were increasing. Now, with limits not only on the amount someone can borrow to buy a franchise, but limits on potential revenues, and furthermore a limit taxpayers subsidizing football either directly (as in the case of Buffalo and Indianapolis and I'm sure countless other places) or through public bonds for stadiums, the owners realize that they have a cap over their heads and they don't like it. But these guys are actually raking in more money than they ever have before in their businesses and in their personal income--yet it's their net worth that they are concerned about (i.e. the value of their franchises).

I'm not sympathetic at all. In fact, I'm more concerned that they want to ruin the game with your 18 week seasons and other bogus rules just so you can get the next sucker to buy your bloated sense of your bloated self-worth.

They run the league badly with their go-go mergers&acquisitions mentality. They should stop and think of Warren Buffett and Coca-Cola. Focus on the bottom line. Do what you do well. This is a sport. Not a conglomerate.

Part of me wishes the owners would crash and burn on this. Another part of me wants the IRS tax code that allows business entertainment expenses to eliminate those deductions, because let's face it, bringing business partners to your luxury box is for pure pleasure. The idea that you need to conduct business there rather than in your corporate suite is a total fantasy.

Total Revenue now includes just that...everything from gate receipts to luxury boxes to local radio deals to stadium naming rights. Some like Mike Vrabel wanted it to include private ownership investments like the development of Patriots Place based on the rationale that the name Patriots meant the players made that development possible...even though they assumed no risk or potential loss if such a development went belly up.

The current Total Revenue formula credits $1B off the top to cover expenses. Oddly the old formula of Designated Gross Revenue actually resulted in about $2B in exempted revenue.

When the owners asked for 18% in credits that the NFLPA chose to characterize as an 18% decrease in player salaries...what they were actually asking for is an 18% reduction in the amount of revenue included in the new designation of Total Revenue... In other words give back what you grabbed in 2006. Now, we all know unions aren't inclined to give back gains, but when push comes to shove most will end up giving back a substantial amount of landmark level gain in exchange for not losing anything more than most of that gain as opposed to say all their constituents their jobs.

This isn't a case of a real labor union saying over decades of negotiation we eeked out a living wage and benefits package for our workers and now you want them to cut it back to a level at which they cannot exist in today's economy. This is a case of a union saying we finally got the upper hand on you SOB's last time out and fleeced you for a billion dollar 18% increase windfall and if you think we're giving that back just because it's making it impossible for many of you to stay in business or continue as you have for decades before 206 to grow our joint pie you're as naive as our constituents and their fans who will buy our spin that you're actually asking us to take an 18% pay cut across the board...you greedy billionaires...

 

[MoLewisrocks]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

Some of the owners who got in late may have overpaid... Some work may need to be redone, but the vast majority of owners--like the Wilsons--are doing great. Ross, McNair, Woodhead, maybe they are having difficulties. The others, not so much.

Doing great on paper isn't the same as making cash money hand over fist. It's hard to pay an inheritence tax on an $800M asset if you want to retain it and it's your only asset... Geesh, this isn't nuclear physics... Sure they can pay it if they sell out...but then they no longer own that $800M asset, they just have about half the cash value of the asset to split among the grandchildren.

There are several owners from back in the day whose only real asset is the value of their NFL team less all the money they have borrowed over the years against that asset to invest in maintaining it and themselves. Irsay is a prime example. His father left him half the team, and he borrowed $$$ and bought out his step mother to gain the other half. He doesn't have a nickel to his name short of what the Colts make him. And for many years that wasn't much comparatively speaking (say to a Kraft or Allen or Ross who made their initial fortunes elsewhere before buying their teams). In fact when he signed Peyton to his last record deal he had to auction off personal assets accumulated over his lifetime (including a music memorabelia collection) because the Colts 2004 revenue stream didn't generate enough cash to pay one player a $34M signing bonus...and still pay the rest of them. But he needed that player onboard if he was to have a shot at a taxpayer funded sweetheart stadium deal that would seemingly help facilitate his cash flow via luxury box and signage revenue...had they not had to get folded into the collective now dubbed Total Revenue as a result of the 2006 CBA...

But everyone from the late 90's on has paid at least half a billion and counting for their franchise and often had to then deal with getting a new stadium deal done, 80% of which used to be taxpayer funded but 50% of which are now being done of necessity with private (borrowed) funding. KC just completed a $375M renovation of Arrowhead Stadium...$125M of which the Hunt family had to fund even though they don't own the stadium. The Steeler's little ownership debaucle recently required them to consolidate ownership under Dan Rooney to achieve the mandated 30% level and that meant that several partial owners had to be bought out at a cost of borrowing $250M. In addition to the bath they took building a joint use stadium in the Meadowlands on leased land, the JETS and Giants each spent around $75M to build new seperate training facilities and fields in the adjacent area. All these facilities and grand new stages benefit the players. Many of them remain un named in this present economic environment, where even teams desperate to sell naming rights can't come up with a company comfortable with taking that kind of plunge. Advertising budgets and revenue have fallen off dramatically over the last 2-3 years in case you haven't noticed...even as competition for them has increased.

 

[Rob0729]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

The union is claiming that the NFL is hiding revenues. They keep asking the NFL to show us the books, and the NFL trots out Green Bay. Why do they want to see the books if all revs are included?

Lastly, I can't think of what older stadiums need to be rebuilt. Which ones are you talking about? I mentioned San Diego and Minnesota, can't think of any others. The entire Midwest is brand new. The only old stadiums I can think of are Oakland, Buffalo, KC, and those stadiums are in limited markets. no point in redoing them since you're not going to attract more luxury box seating there.

Lastly, the owners are at fault if they believe this is an industry that needs constant expansion. They should be happy with increases in yearly revenues and TV shares. They need to think more like Coca-Cola than Google. The frontiers are limited. Do what you do well and shut up about it. Don't destroy the game for more $$$. That's exactly what they are doing. Why?

What's going on right now is similar to what has happened in the housing market. With the financial crunch, and there being less money to lend out, owners have seen the values of their franchises implode. Those values were given a premium because year-over-year NFL revenues were increasing. Now, with limits not only on the amount someone can borrow to buy a franchise, but limits on potential revenues, and furthermore a limit taxpayers subsidizing football either directly (as in the case of Buffalo and Indianapolis and I'm sure countless other places) or through public bonds for stadiums, the owners realize that they have a cap over their heads and they don't like it. But these guys are actually raking in more money than they ever have before in their businesses and in their personal income--yet it's their net worth that they are concerned about (i.e. the value of their franchises).

I'm not sympathetic at all. In fact, I'm more concerned that they want to ruin the game with your 18 week seasons and other bogus rules just so you can get the next sucker to buy your bloated sense of your bloated self-worth.

They run the league badly with their go-go mergers&acquisitions mentality. They should stop and think of Warren Buffett and Coca-Cola. Focus on the bottom line. Do what you do well. This is a sport. Not a conglomerate.

Part of me wishes the owners would crash and burn on this. Another part of me wants the IRS tax code that allows business entertainment expenses to eliminate those deductions, because let's face it, bringing business partners to your luxury box is for pure pleasure. The idea that you need to conduct business there rather than in your corporate suite is a total fantasy.

There is only so much luxury box revenue you can hide. The NFLPA knows how many boxes and club seats are in each stadium and how much they sell for. I don't think the league hides how many boxes and club seats aren't sold in the stadium. It is simple math to figure out. The players want the league to open their books for other revenue more than the luxury boxes. Plus it is a negotiating ploy to make it look like the owners are hiding something when they don't open their books.

As for stadiums, there are plenty of older stadiums that will need major upgrades or replacements in the next 5-10 years, but not neccessarily now. KC has a large fanbase and is in desperate need of a new stadium. Sun Life Stadium probably will need to be upgraded again (granted after it changes names about three or four more times) or replaced in the next 5-10 years. The Superdome is a pit and is constantly needed to be fixed even without hurricanes doing damage. Candlestick Park is 50 years old (they have been talking about building a new stadium for them possibly making it a joint stadium with the Raiders for a few years now). The Georgia Dome is going to be 20 next year and will probably need significant upgrades in the next 5-10 years. When Ralph Wilson dies, the Bills will likely be moved to Toronto which will require a new stadium. Eversbank Field (Jags) will be 20 in four years and will need upgrades in the next 5-10 years if the Jags aren't moved to LA or somewhere else.

For the value of the franchises, I will defer to Banks on another article:

Players are understandably skeptical about team owners asking them to give back some of the revenue gains they captured in the 2006 CBA when franchise values continue to soar past the $1 billion mark. But one team executive I spoke with this week about the labor issue believes those figures only complicate the process of players understanding the key difference between rising franchise values on paper and what a club's dwindling operating profit margin is these days.

"There's got to be enough room for growth of profits that owners feels like they're getting a return on their investment,'' the club executive said. "Players will cite franchises that have been valued at $1.3 billion and rising, but the reality is, at that price evaluation, how many people can actually afford to buy an NFL franchise?

"Your club may be assigned that value, and it may actually limit your ability to sell the team if it would come to that. It's not a very liquid asset in that sense. That's not the real-life price you would garner, because you probably couldn't find a buyer. It's value on paper, but that's not the same thing as assuming you're making money commiserate with a company that's valued that high. It's an important distinction to make.''

Titans drafting quarterback at No. 8 strong possibility in April - Don Banks - SI.com

I don't feel bad for either side. As I said before, it is a battle between millionaires and billionaires with both sides being greedy on some issues and dead on right with others. I do think the current CBA if continued will eventually bankrupt smaller franchises. It will cash strap others. It doesn't mean I agree with all the points the owners' current proposals.

Personally, I think a lot of the motivations from the owners are in the best interest for perserving the NFL's dominance on sports and keep it thriving and not just to line the owners' pockets. There is some of that, but even some of the players admit publically that the players got too much in the 2006 negotiation. It needs to be balanced back to perserve the league.

As for the 18 game schedule, I go back and forth on it. I think the injury impact is overstated, but I think it could dillute the product especially if the players fight to play only 16 games in an 18 game schedule (who wants to watch two Patriots games a year with Brian Hoyer as the starting QB over a resting Brady).
​

 

[Rob0729]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

One other thing. The owners the last time went ahead with the CBA precisely because they were fighting among themselves about the salary cap and redistributing money to the small market franchises. They didn't have the votes among themselves to change things up.

That's a key ingredient to this mess. Why? Because they can't stomach the idea that owners who are paying a lot of money for their own stadiums in big markets are also shelling out $$$ to Ralph Wilson, the Hunts, maybe the Rooney's and Browns too. Those old-time owners are filthy rich, but they get league welfare to help them run their franchises. Without that money, those teams can't pay a payroll near the cap. That's the problem right there.

Think about what happens if the owners can't grab player money and put it toward the owners in small markets? That naturally makes the bigger markets worth less because anyone who buys a new franchise has to subsidize the other franchises. That hurts the business model and puts extreme pressure on the idea of a salary cap and redistribution. The owners are almost at war more than the players. But that's what happens when you came into the league after the men who actually built it. Ralph Wilson has been around long enough so that he refuses to give you a dime. It's his money, that's how he thinks of it. So where do you go to keep up the value of your franchise? The players.

That's why they did the last CBA in a hasty fashion, because the owners had NOT worked out their differences, and the NFL was unprepared for the owner anger among one another. They had no PLAN B to take it out on the players instead. If Wilson, the Browns, the Hunts, etc., were out of football in 2006, right now we would have a much lesser amount of revenue sharing among teams, and the players would be getting 60% still.

Actually, the last CBA gave a lot to the small market teams, the problem was the small market teams wanted more. You have a cheap arse loser who inherited the team from his father like Mike Brown who cries poor mouth, but shortchanges his team to keep his profits high.

And let's not act like the union is all as one unit. You got Antonio Cromartie blasting his own union because they are in the way of him getting his big payday. Most of the players couldn't really care less about compensating retired players and until they got a lot of negative PR for totally neglecting former players who helped to build the league and had to take offseason jobs to suppliment their income, they didn't even give them lipservice. If there is a prolonged lockout, odds are good the union will become fractured publically long before the owners who are showing solidarity.

I'm sorry, but you are painting the owners as greedy bastards and the players as victims, but this is a case of shades of gray and not black and white. Both sides have parts of greedy self intentions and desire to do what is best for the league as a whole. Neither side is 100% good or bad on this.

 

[MoLewisrocks]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

There is only so much luxury box revenue you can hide. The NFLPA knows how many boxes and club seats are in each stadium and how much they sell for. I don't think the league hides how many boxes and club seats aren't sold in the stadium. It is simple math to figure out. The players want the league to open their books for other revenue more than the luxury boxes. Plus it is a negotiating ploy to make it look like the owners are hiding something when they don't open their books.

As for stadiums, there are plenty of older stadiums that will need major upgrades or replacements in the next 5-10 years, but not neccessarily now. KC has a large fanbase and is in desperate need of a new stadium. Sun Life Stadium probably will need to be upgraded again (granted after it changes names about three or four more times) or replaced in the next 5-10 years. The Superdome is a pit and is constantly needed to be fixed even without hurricanes doing damage. Candlestick Park is 50 years old (they have been talking about building a new stadium for them possibly making it a joint stadium with the Raiders for a few years now). The Georgia Dome is going to be 20 next year and will probably need significant upgrades in the next 5-10 years. When Ralph Wilson dies, the Bills will likely be moved to Toronto which will require a new stadium. Eversbank Field (Jags) will be 20 in four years and will need upgrades in the next 5-10 years if the Jags aren't moved to LA or somewhere else.

For the value of the franchises, I will defer to Banks on another article:

Titans drafting quarterback at No. 8 strong possibility in April - Don Banks - SI.com

I don't feel bad for either side. As I said before, it is a battle between millionaires and billionaires with both sides being greedy on some issues and dead on right with others. I do think the current CBA if continued will eventually bankrupt smaller franchises. It will cash strap others. It doesn't mean I agree with all the points the owners' current proposals.

Personally, I think a lot of the motivations from the owners are in the best interest for perserving the NFL's dominance on sports and keep it thriving and not just to line the owners' pockets. There is some of that, but even some of the players admit publically that the players got too much in the 2006 negotiation. It needs to be balanced back to perserve the league.

As for the 18 game schedule, I go back and forth on it. I think the injury impact is overstated, but I think it could dillute the product especially if the players fight to play only 16 games in an 18 game schedule (who wants to watch two Patriots games a year with Brian Hoyer as the starting QB over a resting Brady).
​

Sadly I think the 18 game schedule is the brainchild of the same guy who brokered the unsustainable 2006 11th hour CBA. Kraft is convinced that if they can show the players that while their % goes back down their $$ will not and may even go up, he can get another deal done to avoid a work stoppage. Kraft is all about marketing the league, when he isn't mumbling about Tom making a lazy mistake or the season disappointing him like a fanboy... I liked him better pre sypgate when he was seldom seen and almost never heard... I think a more visible Kraft presence is the costliest price one voice Bill paid for his over publicized screwup. Believe me, it wasn't Bill who hung that 16-0 banner at Gillette and tried to have it copyrighted...

 

[goheels22002]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

I totally disagree. I think there will be football in 2011. Things look very good considering both sides are having around the clock mediation for seven days straight and both sides are adhering to the media blackout agreement. Just like the deal in 2006 where people were calling for a long work stoppage and neither side budging, I expect this to get done well before the season. I don't know how you can't be encouraged about what has happened over the last few days.

This could end up being a long holdout, but both sides have agreed to aggressive negotiations and both sides have stopped the rhetoric. That is a sign that both sides are somewhat committed to getting a deal done.

I agree that things look better with both sides meeting extensively with a mediator. They'll get the peripheral issues sorted out and arrive at the revenue split.

One key to this is some sort of financing pool for stadium renovations - construction that involves current revenue. Jerry Jones put the owners behind the 8 ball with his stupid and inefficient stadium. Of all the owners, Jones cannot live without the revenue of the 2011-12 season. It's ironic that Jones will side with the small market guys who cannot afford to miss game and TV revenue either.

Only a few of these owners can ride out a season. The revenue and value of these franchises are a huge part of why these guys are liquid. We don't know enough about team finances to know which owners are most dependent on the TV and ticket revenue.

Some guys, like Woody Johnson of Johnson & Johnson and the Jets have boatloads of outside liquidity and revenue. Teams like the Packers don't have outside debt like Jones. The Vikings and Bills are a financial mess and are wholly dependent on revenue sharing from the big market teams and TV.

The Pats are interesting on this. We don't really know the Krafts' debt from the football or Patriots Place side. Bob Kraft has said all along that a deal will get done, and he's always been pretty straight up about this stuff. If he was a hard-liner, we would have heard that by now in some fashion. But i doubt that the long range plan works if the 2011-12 season revenue is lost.

 

[Rob0729]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

Not that it means much, but Tom Curran says he expects a new CBA by April 1st.

 

[goheels22002]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

Actually, the last CBA gave a lot to the small market teams, the problem was the small market teams wanted more. You have a cheap arse loser who inherited the team from his father like Mike Brown who cries poor mouth, but shortchanges his team to keep his profits high.

And let's not act like the union is all as one unit. You got Antonio Cromartie blasting his own union because they are in the way of him getting his big payday. Most of the players couldn't really care less about compensating retired players and until they got a lot of negative PR for totally neglecting former players who helped to build the league and had to take offseason jobs to suppliment their income, they didn't even give them lipservice. If there is a prolonged lockout, odds are good the union will become fractured publically long before the owners who are showing solidarity.

I'm sorry, but you are painting the owners as greedy bastards and the players as victims, but this is a case of shades of gray and not black and white. Both sides have parts of greedy self intentions and desire to do what is best for the league as a whole. Neither side is 100% good or bad on this.

You are right about the owners - most are football families who live and die with this stuff as fans. On their solidarity, I wouldn't count on it. There's way too much revenue on the table to have a prolonged walkout. Fixed costs for some of the owners with or without games is huge. Cowboys Stadium is leveraged up the wazoo by CIC Equity Partners and Goldman Sachs after Jerry Jones agreed to cover the $650 million cost overrun of the stadium. The small market owners will need a subsidy from the big boys to weather a long lockout although some don't have much debt since they haven't invested in their facilities to any substantial degree. No payroll, no costs for them. It's probably 32 different stories and some owners will take a hard line with the NFLPA and others will want a deal by the draft.

 

[Metaphors]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

The numbers mentioned are really eye-popping -- the owners want an extra billion in expenses and a drop from 60 to 50 per cent of the residue. Taking the figures Banks gives, that goes from $4.8 billion down to $3.5 billion available for salary!

But that is the compromise point for the owners, not the final offer. Split the difference and you are in the $4.2B range. Also split the difference and let the owners take $1.5B off the top. That means the players get 56% of designated revenue (47% of total revenue), working out to a salary cap of over $130M per team...which is higher than the last cap IIRC. If the players agree to 18 games, they get 56% of incremental revenue from TV. Just work out the details on salary floor, veteran benefits, rookie scale and keep the FA rules pretty much the same...and get the deal done.

 

[MoLewisrocks]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

But that is the compromise point for the owners, not the final offer. Split the difference and you are in the $4.2B range. Also split the difference and let the owners take $1.5B off the top. That means the players get 56% of designated revenue (47% of total revenue), working out to a salary cap of over $130M per team...which is higher than the last cap IIRC. If the players agree to 18 games, they get 56% of incremental revenue from TV. Just work out the details on salary floor, veteran benefits, rookie scale and keep the FA rules pretty much the same...and get the deal done.

Again, people act like the owners are asking the players to roll back to 2000. They aren't. They're asking them to roll back to 2006 and give up most of what they gained formula wise in that CBA which was 59% of a $1B larger pie that was really no larger overall, and they are asking them to allow them to recover bonus money from the total fools who get themselves suspended or worse, locked up while under contract. They are also asking them to limit rookie compensation and split the savings between the pre 1993 retirees Gene Upshaw consistently reminded us were not his constituency (which is why most of them hate the union and not the league). I heard union reps in that ****amamie broadcast say again today that "the league" owes those players... The union would prefer to see 50% of the rookie compensation savings funneled right back to the...rookies, with retirees and veterans splitting the other 50%. Makes it easier to say that veterans are losing money in the deal. The league has already stepped up with I believe $200M in funding for retirees and pledged to keep their benefits in effect in the event of a work stoppage... The union just lost a suit to try and force the league to play for active players benefits in the event of a work stoppage... And the league came up with the 18 game schedule proposal largely as a means to grow the pie so that players would not lose much of what they gained $$$ wise even while agreeing to lower their percentage take. The union chooses to spin that as two more games for less money. I think the health risks outweigh any benefit, but that's another whole story. If the union thought they would see all the money from the 2 additional games, their opposition would evaporate. The fact that they have always cared more about the here and now then the past or future is why those pre 1993 retirees ended up living under bridges... Fred Smerlas used to talk about that a lot, how the smart players wanted benefits and not just increased signing bonuses and base salaries, and were told to basically (Please be quiet - edited).

 

[mgteich]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

I still believe that the most difficult negotiations will NOT be between the owners and the players. In the end, the owners and players will agree regarding total compensation, pension and health issues. The players need to be shown that their total compensation will not go down (except for 1st round rookies). Mediators can do the math for everyone, and help iron out differences and correct misrepresentations.

The much more difficult negotiations will be between the owners who have mismanaged their teams and those that haven't. The financially troubled teams will try to get as much welfare as they can from the financially stable owners.

I support the financially stable owners. I support the players. In the end, I can certainly accept missing a few games once every few years. Issues are difficult.

HOWEVER, I do not support the whining poor excuses for business folk who need more money because the thier local taxpayers aren't giving them enough corporate welfare, so they need to make up the difference.

 

[Rob0729]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

You are right about the owners - most are football families who live and die with this stuff as fans. On their solidarity, I wouldn't count on it. There's way too much revenue on the table to have a prolonged walkout. Fixed costs for some of the owners with or without games is huge. Cowboys Stadium is leveraged up the wazoo by CIC Equity Partners and Goldman Sachs after Jerry Jones agreed to cover the $650 million cost overrun of the stadium. The small market owners will need a subsidy from the big boys to weather a long lockout although some don't have much debt since they haven't invested in their facilities to any substantial degree. No payroll, no costs for them. It's probably 32 different stories and some owners will take a hard line with the NFLPA and others will want a deal by the draft.

Oh, the players will crack long before the owners will though. Again there are literally hundreds of players who's career depends on the draft and a large number of them who are free agents and desperately need to hook up with a team before the draft to maximize their value. Post draft their value goes downor they may not hook up with a team at all. If there is no CBA by the time of the draft, teams will be more intent on filling their biggest needs through the draft because there is no guarantees they will be able to do so through free agency. If you look at Bryant McKinnie and his $100k bar tab this weekend or Antonio Cromartie and his child support payments, you will see strong evidence that many of the players will be hurting for money a lot quicker than the owners especially players hoping to cash in this offseason with new deals. So I expect there to be a rift with the players before the draft if there is no CBA.

The owners on the other hand, will feel no pressure to fracture their unified stance at least until September. The fact that the owners will get revenue from the networks in a lockout will also help them.

There is a reason why the owners have won every CBA negotiation other the the 2006 negotiations. First, it is a lot easier to show an unified front with 32 people than 1,500. Second, most of the owners are more fiscally responsible than the players. Third, many player are counting on big deals this offseason to support their lifestyle and expecting these deals to come with bonus money paid in March, April, or May while the owners don't make any money until the fall if there is a new CBA.

 

[Rob0729]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

I still believe that the most difficult negotiations will NOT be between the owners and the players. In the end, the owners and players will agree regarding total compensation, pension and health issues. The players need to be shown that their total compensation will not go down (except for 1st round rookies). Mediators can do the math for everyone, and help iron out differences and correct misrepresentations.

The much more difficult negotiations will be between the owners who have mismanaged their teams and those that haven't. The financially troubled teams will try to get as much welfare as they can from the financially stable owners.

I support the financially stable owners. I support the players. In the end, I can certainly accept missing a few games once every few years. Issues are difficult.

HOWEVER, I do not support the whining poor excuses for business folk who need more money because the thier local taxpayers aren't giving them enough corporate welfare, so they need to make up the difference.

That was the case last time around, but not this time. I don't think revenue sharing is an issue this time around. Much of those issues were already corrected in 2006. Whether right or wrong, the owners have all come to agree with their stance. They all feel that a more equitable split with the owner is all that is needed to fix the problems you discussed.

I think it will be tougher for the players to be unified and that may be a bigger problem to get them all to agree. In 2006, it was easy because the owners gave them most of what they wanted. This time around, it will be the players who will be compromising. You have about 1,500 people with different agendas trying to come to an agreement. You got about 300 free agents who most likely are thinking short term and just want to be able to get a deal. You have several hundred older players and scrubs who are thinking about their post NFL career and want to make sure they are taken care of. You got other players who are concerned about the players in general and want to make sure the players get a fair deal both now and the future. You got agents whispering in their players' ears who not only want to maximize their commissions with current players, but also with rookies when they sign (agents who focus on getting top tier rookie prospects are going to get screwed with a rookie cap).

People look at 2006 as the norm with CBA negotiations, but they aren't. Typically, the owners are unified and the players cave. In 2006, Tagliabue looking to retire and maintaining labor peace as part of his legacy played a big role in the owners agreeing to the CBA that was in the players' favor. Without that, they might have been much more of hardliners.

 

[MoLewisrocks]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

I still believe that the most difficult negotiations will NOT be between the owners and the players. In the end, the owners and players will agree regarding total compensation, pension and health issues. The players need to be shown that their total compensation will not go down (except for 1st round rookies). Mediators can do the math for everyone, and help iron out differences and correct misrepresentations.

The much more difficult negotiations will be between the owners who have mismanaged their teams and those that haven't. The financially troubled teams will try to get as much welfare as they can from the financially stable owners.

I support the financially stable owners. I support the players. In the end, I can certainly accept missing a few games once every few years. Issues are difficult.

HOWEVER, I do not support the whining poor excuses for business folk who need more money because the thier local taxpayers aren't giving them enough corporate welfare, so they need to make up the difference.

I don't think you get that this negotiation isn't about shared revenue from an ownership standpoint. That was settled last time out. And it isn't about pension and health benefits either, it's about total revenue and how it will be split between owners and players. Even with shared revenue distribution the have nots can't keep pace with player contract inflation since 2006 when the players landed in high cotton as a result of the change from DGR (essentially TGR-$2B) to TGR - $1B while retaining their roughly 60% cut of the revenue pie. The owners want their lost billion back. They are willing to look at recouping that money or mitigating what the players give back by various means like expanded schedules, rookie contract caps and even recovery protection for signing bonuses. Thing is the union is only interested in those proposals if all the revenue flows to players while the status quo otherwise remains intact.

 

[Joker]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

heh....uh...OK..the players aren't impressed with DeMaurice...right...great...so, moving on...who the hell is impressed with Omissioner Zero Clouseaudel and his 100% lack of vison, leadership, clarity and intelligent decision making?

Personally speaking,I will not participate as a fan if the NFL does NOT come to an agreement fair to both sides. I expect nothing from this nitwit however.

 

[Patjew]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

I couldn't care less how this gets resolved and who gets what. I just want it resolved quickly so we don't waste another Brady season.

 

[upstater1]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

Doing great on paper isn't the same as making cash money hand over fist. It's hard to pay an inheritence tax on an $800M asset if you want to retain it and it's your only asset... Geesh, this isn't nuclear physics... Sure they can pay it if they sell out...but then they no longer own that $800M asset, they just have about half the cash value of the asset to split among the grandchildren.

There are several owners from back in the day whose only real asset is the value of their NFL team less all the money they have borrowed over the years against that asset to invest in maintaining it and themselves. Irsay is a prime example. His father left him half the team, and he borrowed $$$ and bought out his step mother to gain the other half. He doesn't have a nickel to his name short of what the Colts make him. And for many years that wasn't much comparatively speaking (say to a Kraft or Allen or Ross who made their initial fortunes elsewhere before buying their teams). In fact when he signed Peyton to his last record deal he had to auction off personal assets accumulated over his lifetime (including a music memorabelia collection) because the Colts 2004 revenue stream didn't generate enough cash to pay one player a $34M signing bonus...and still pay the rest of them. But he needed that player onboard if he was to have a shot at a taxpayer funded sweetheart stadium deal that would seemingly help facilitate his cash flow via luxury box and signage revenue...had they not had to get folded into the collective now dubbed Total Revenue as a result of the 2006 CBA...

But everyone from the late 90's on has paid at least half a billion and counting for their franchise and often had to then deal with getting a new stadium deal done, 80% of which used to be taxpayer funded but 50% of which are now being done of necessity with private (borrowed) funding. KC just completed a $375M renovation of Arrowhead Stadium...$125M of which the Hunt family had to fund even though they don't own the stadium. The Steeler's little ownership debaucle recently required them to consolidate ownership under Dan Rooney to achieve the mandated 30% level and that meant that several partial owners had to be bought out at a cost of borrowing $250M. In addition to the bath they took building a joint use stadium in the Meadowlands on leased land, the JETS and Giants each spent around $75M to build new seperate training facilities and fields in the adjacent area. All these facilities and grand new stages benefit the players. Many of them remain un named in this present economic environment, where even teams desperate to sell naming rights can't come up with a company comfortable with taking that kind of plunge. Advertising budgets and revenue have fallen off dramatically over the last 2-3 years in case you haven't noticed...even as competition for them has increased.

I'm still not with you on this. In fact, the Wilsons have all said that they would be much better off if Ralph sold to them now. But the Wilsons do not want the team. Ralph is holding on because he wants to win. Otherwise, they'll take the $$ thank you.

As for Irsay, how can I possibly feel sorry for a guy who is getting a huge amount of money from taxpayers. come on, you have sympathy for that?

 

[upstater1]

Re: Don Banks: Behind the rhetoric...what a fair deal in NFL labor debate will look l

There is only so much luxury box revenue you can hide. The NFLPA knows how many boxes and club seats are in each stadium and how much they sell for. I don't think the league hides how many boxes and club seats aren't sold in the stadium. It is simple math to figure out. The players want the league to open their books for other revenue more than the luxury boxes. Plus it is a negotiating ploy to make it look like the owners are hiding something when they don't open their books.

As for stadiums, there are plenty of older stadiums that will need major upgrades or replacements in the next 5-10 years, but not neccessarily now. KC has a large fanbase and is in desperate need of a new stadium. Sun Life Stadium probably will need to be upgraded again (granted after it changes names about three or four more times) or replaced in the next 5-10 years. The Superdome is a pit and is constantly needed to be fixed even without hurricanes doing damage. Candlestick Park is 50 years old (they have been talking about building a new stadium for them possibly making it a joint stadium with the Raiders for a few years now). The Georgia Dome is going to be 20 next year and will probably need significant upgrades in the next 5-10 years. When Ralph Wilson dies, the Bills will likely be moved to Toronto which will require a new stadium. Eversbank Field (Jags) will be 20 in four years and will need upgrades in the next 5-10 years if the Jags aren't moved to LA or somewhere else.
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The only one I see here that's a problem is Candlestick. The Bills aren't moving to Toronto. That experience has turned into a big failure as they can't even sell 40,000 seats. This year, when I went to the Bills game I sat next to a Bills season ticket holder. He was a Polynesian guy. Lives in Ottawa, 7 hours away. Would not want to go to Toronto to see a game. It's just not going to happen.

As for Jax, yes maybe they'll move, but why would they build a stadium if they stayed? That stadium has hosted a Super Bowl, and the market is limited.