Forbes article

[mikey]

No free link. I have summarized the major points of the article:

Football Finance

Fumble?
by Monte Burke

The NFL is unquestionably America's healthiest and most popular pro sports league. But a fight over money could change that.

These are the glory days for the National Football League.

NFL recently signed deals with Fox, CBS, NBC, ESPN, and DirecTV worth $3.7 Billion annually.

Now, the owners are trying to hammer details of next collective bargaining agreement.

However, the owners are fighting among themselves.

On one side are smaller market, lower-revenue teams like the Jacksonville Jaguars and the Buffalo Bills; on the other are the big-market, big-revenue teams like the New England Patriots and the Dallas Cowboys.

The battle is over “local revenues†like concessions, suites, parking, and stadium-naming rights. This revenue accounts for almost 20% of total revenues.

Local revenues have grown 20% annually in the last five years, thanks to the entrepreneurial efforts of owners like the Cowboy’s Jerry Jones, the Washington Redskins’ Daniel Snyder, and the Patriots’ Robert Kraft.

The three teams account for 20% of the league’s local revenue.

Now, owners of smaller teams like Wayne Weaver of the Jacksonville Jaguars want the local revenue to be shared. They say it’s not for the money, but to keep the league competitive.

It is therefore no surprise that owners like Kraft, who transformed the moneylosing Patriots into a $1 billion asset are balking.

Kraft responds, “those of us who have taken financial risk did so with an understanding of certain rules that were in place and did our financing on those basisâ€.

Kraft further said the revenue sharing allows all 32 teams to be competitive but does no guarantee that all 32 owners will be profitable. “Every team should have an incentive to be entrepreneurial.â€

Players, too, want a share of the local revenues. They now want 65% of shared and local revenues.

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[donna_harris]

Very intresting. One point they forgot in all of this was the fans. At what point do they throw in the towel and decide not to pay the high prices anymore. Look at the Pats:

$75 for nose-bleed seats x 2 = $150 x 10 games = $1500

$40 for parking ($35 in stadium) = $40 x 10 games = $ 400

Sub-total: = $1900 (Family of four would be $3400)

Add in any drinks $3 and up and after five years, you could purchase a compact car.

Now, I am NOT slamming the Pats or the prices, only brining up the costs. At what point does the combination of the Pats not making the playoffs and the increas in tickets / parking cause the fans not to show up?

Look at the NHL. The Bruins are in the cellar, and even with the 2 for 1 deals they have right now, they still can not sell tickets.

 

[JLC]

Any time someone says, "its not for the money..."

 

[mikey]

What is so surprising about the Forbes article is the apparent 180* turn of Bob Kraft.

From all indications, Kraft was suppossed to be Tagliabue's front man to convince Snyder and company to agree to the sharing of the local revenue.

But from his remarks in the article, Kraft had apparently switched allegiance and joined the Snyder's camp instead.

If this is true, it does not bode well for the league's negoatiation process with the players' union later this year.


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[DaBruinz]

Very intresting. One point they forgot in all of this was the fans. At what point do they throw in the towel and decide not to pay the high prices anymore. Look at the Pats:

$75 for nose-bleed seats x 2 = $150 x 10 games = $1500

$40 for parking ($35 in stadium) = $40 x 10 games = $ 400

Sub-total: = $1900 (Family of four would be $3400)

Add in any drinks $3 and up and after five years, you could purchase a compact car.

Now, I am NOT slamming the Pats or the prices, only brining up the costs. At what point does the combination of the Pats not making the playoffs and the increas in tickets / parking cause the fans not to show up?

Look at the NHL. The Bruins are in the cellar, and even with the 2 for 1 deals they have right now, they still can not sell tickets.

I can't believe someone compared the Bruins to the Patriots. The problem with the Bruins stems from their OWNER. He doesn't care about the team and only has an interest in making money. Robert Kraft is not like that. Though he cares about making money, he also cares about the product that is on the field.

One of the BIGGEST reasons that the Bruins have lost fan support is that the management team is lousy and hasn't put a good team on the ice even though they spent a ton of money this year. In prior years, the Bruins had been penny wise and pound foolish (to put it extremely mildly).

One thing that I think you overlook in the scheme of things is that the Patriots are on a major upswing. It will continue to be that way for the next 3-7 years. Patriots games are a HOT commodity. Your $150 per game is a wet dream unless you are a season ticket holder. Otherwise, people are paying $90-150 per ticket, some of which are SRO. As long as people are willing to pay the even more outrageous pricing that ticket agencies offer, the Patriots can continue charge amongst the highest in the league (for a stadium that is only average in capacity, btw).

 

[DaBruinz]

What is so surprising about the Forbes article is the apparent 180* turn of Bob Kraft.

From all indications, Kraft was suppossed to be Tagliabue's front man to convince Snyder and company to agree to the sharing of the local revenue.

But from his remarks in the article, Kraft had apparently switched allegiance and joined the Snyder's camp instead.

If this is true, it does not bode well for the league's negoatiation process with the players' union later this year.


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Mikey -
A few things.
1) This article isn't new. Its old. It may be new to Forbes, but all the information that you put up was reported prior to the start of the season.
2) I think you are seriously over-reacting. Especially since the recent reports are that they are supposedly working to have the extension in place for the start of free agency.
3) Its not a change of stance on Kraft's part. Its the same stance he's had the entire time. I have no idea why you thought otherwise.

Kraft and Snyder have always been on the same side as Dan Rooney. And that is the side that the teams should get to keep certain revenues. The reason being that why should the Patriots, Redskins, and Steelers (just to name a few) be penalized because such small market teams as the Cardinals, Jaguars and Colts refuse to put money into marketing their teams. Its telling when the Patriots have a marketing staff of 20 and the Cardinals have a marketing staff of 1.

 

[Terry Glenn is a cowgirl]

Any time someone says, "its not for the money..."

I think Ty Law and Lawyer Milloy said "it's not for the money..."