Help me with the numbers

[spacecrime]

What am i doing wrong, because this doesn't make sense.

Scenario: all revenues, including stadium naming rights, are included in shared revenue.

The Colts just signed a long-term agreement for naming rights to the former RCA Dome for $120 million dollars. I think the deal was for twenty yeaars.

So, Upshaw wants it included in revenues, and the palyers want 60%. Union gets $72 million. (if they accept 56%, they only get 67 million.

Okay, so the Dolts get either 48 or 52 million dollars, depending on 56 or 60%.

Now they share that will the other 31 teams.

The Colts get eithe 1.5 million or 1.6 million over twenty years, or either $75 or $82 thousand a year.

The Colts sell the naming rights for $120 million, and they get to keep less than a HUNDRED K A YEAR!!!!!!????!? that won't even pay for the paint to put the new name up.

Now, I hate the stupid Colts as much as anyone, but this is hardly fair.

Obviously I missed something. What?

 

[Willie55]

That's why the smart owners are fighting tooth and nail to be able to keep their local revenues so the Bill Bidwells of the league dont just sit back and sponge off them.

 

[InBillITrust]

The reason that the players want more local revenue is that the NFL often lends owners money to build stadiums. The money that is loaned comes straight from the general revenue fund that the salary cap percentage is based from. Therefore, whenever a new stadium is built, the players have a "share" of that, which is why they believe they deserve some of the new revenue streams that are derived from it.

 

[flutie2phelan]

What am i doing wrong, because this doesn't make sense.

Scenario: all revenues, including stadium naming rights, are included in shared revenue.

The Colts just signed a long-term agreement for naming rights to the former RCA Dome for $120 million dollars. I think the deal was for twenty yeaars.

So, Upshaw wants it included in revenues, and the palyers want 60%. Union gets $72 million. (if they accept 56%, they only get 67 million.

Okay, so the Dolts get either 48 or 52 million dollars, depending on 56 or 60%.

Now they share that will the other 31 teams.

The Colts get eithe 1.5 million or 1.6 million over twenty years, or either $75 or $82 thousand a year.

The Colts sell the naming rights for $120 million, and they get to keep less than a HUNDRED K A YEAR!!!!!!????!? that won't even pay for the paint to put the new name up.

Now, I hate the stupid Colts as much as anyone, but this is hardly fair.

Obviously I missed something. What?

Small point first. They just sold naming rights to their NEW stadium. RCA Dome goes the way of Sullivan Stadium. (But still ... a pretty canny sweetheart deal. Colts pay less than half the cost. Taxpayers pay the rest. D'ya s'pose the taxpayers receive any portion of the naming rights? Duh.)

Your main point. Add up the naming rights for all 32 NFL stadia. Divide evenly, and cut 32 checks for that amount. That is the redistributionist ideal formula.

I know. Doesn't make sense to me either.

 

[patchick]

I haven't been assuming that it's an all-or-nothing proposition...suppose you said 30% of such revenues went into a common pot, to be divided 32 ways. 60% of each team's share was allotted to player salaries.

Then from that one naming deal, each team's total salarly number would rise by $33,750 per year, for a total value to all players of $21,600,000 over twenty years; a total value to each other team owner of $187,500 per year for a total of $1,125,000 over 20 years; and a total value to the Colts of $4,387,500 per year for a total of $87,750,000 over 20 years.

I think you can come up with a fair formula that rewards the individual team's effort, but also recognizes that the dollars the Colts commanded for those rights derived in large part from the mutual efforts of all the owners and players to deliver a quality product.

 

[shirtsleeve]

What am i doing wrong, because this doesn't make sense.

Scenario: all revenues, including stadium naming rights, are included in shared revenue.

The Colts just signed a long-term agreement for naming rights to the former RCA Dome for $120 million dollars. I think the deal was for twenty yeaars.

So, Upshaw wants it included in revenues, and the palyers want 60%. Union gets $72 million. (if they accept 56%, they only get 67 million.

Okay, so the Dolts get either 48 or 52 million dollars, depending on 56 or 60%.

Now they share that will the other 31 teams.

The Colts get eithe 1.5 million or 1.6 million over twenty years, or either $75 or $82 thousand a year.

The Colts sell the naming rights for $120 million, and they get to keep less than a HUNDRED K A YEAR!!!!!!????!? that won't even pay for the paint to put the new name up.

Now, I hate the stupid Colts as much as anyone, but this is hardly fair.

Obviously I missed something. What?

Now that you've mastered the disaster of revenue sharing, please, oh please, try to explain that train wreck of rules called the salary cap. I just cant seem to quite get it. I think I have a handle on it and out comes another curve ball. You gotta be a CPA to understand all that crap. How about letting everything crash to the ground and start over in '08 with a straight up cap number, all money counts in the year prorated for, no rule of 51's, no "expected vs. unexpected" incentives, all incentives reached in year 1 count against year 2's cap. Period. No incentive money unclaimed counts for or against the cap, nor does it affect the total cap number. Simple straight up -it is what it is- numbers. Basic math stuff. And leave local revenue streams alone. If the union is dealing from a straight up number, no need for all that revenue sharing crap. But no, that would make too much sense, and let the leeches of the league fail.

 

[InBillITrust]

This is perfectly fair given the NFL's all for one, one for all formula. Basically, every team is contributing to the overall welfare of the league. So you can say that the Colts make more local revenue that they are contributing to the general fund than say Buffalo. However, that's the way the system works. A millionaire also pays more in taxes than you or I do? Is that fair to the millionaire who works so much harder than we do? Same analogy here.

 

[patchick]

A millionaire also pays more in taxes than you or I do? Is that fair to the millionaire who works so much harder than we do? Same analogy here.

The millionaire also keeps more money than we do. So for the analogy to hold, you need a middle ground...you get to keep enough of the individual rewards to motivate you to keep squeezing out every dime of potential revenue, but share enough to keep a reasonably level playing field.

 

[spacecrime]

This is perfectly fair given the NFL's all for one, one for all formula. Basically, every team is contributing to the overall welfare of the league. So you can say that the Colts make more local revenue that they are contributing to the general fund than say Buffalo. However, that's the way the system works. A millionaire also pays more in taxes than you or I do? Is that fair to the millionaire who works so much harder than we do? Same analogy here.

Sorry, but this analogy is absolutely nothing like what I was talking about. You make more money you pay more taxes. Nothing wrong with that.

You keep saying it is fair because that is the way the system works. Fairness is independent of whether the system is being utilized or not. Fairness is: Is the system in place equitable. Why do the Bengals get $75,000 if the Colts rename their stadium?

I'm saying why should the Colts bother to sell the rights for $120 million if they get to keep $75,000 a year?

Why should the Bengals get $75,000, the same as the Colts, when they (the Bengals) choose not to sell the righrts to their staidum. The Colts LOSE money on the deal when you figure in cost of maintaining the name signs. The Bengals get to keep $75,000 a year.

Taxes? Please don't come back with another lame analogy like supersizing your fries, or adding options when buying a car or some other lame idea.

 

[InBillITrust]

The millionaire also keeps more money than we do. So for the analogy to hold, you need a middle ground...you get to keep enough of the individual rewards to motivate you to keep squeezing out every dime of potential revenue, but share enough to keep a reasonably level playing field.

Yes, that's the entire sticking point here. The lower revenue teams want all of it to go into the general fund; the higher revenue don't want to contribute one red cent. You'd think if they'd figure around 30% or some other reasonable figure, this deal would get done in 5 minutes, but they're all idiots.

 

[flutie2phelan]

Tom, did you see this?

Your main point. Add up the naming rights for all 32 NFL stadia. Divide evenly, and cut 32 checks for that amount. That is the redistributionist ideal formula.

 

[patchick]

Add up the naming rights for all 32 NFL stadia. Divide evenly, and cut 32 checks for that amount. That is the redistributionist ideal formula.

I know. Doesn't make sense to me either.

The 100% sharing of tv rights makes sense because the tv deal is negotiated collectively by the league. 100% sharing of rights negotiated by individual teams is quite obviously a bad business model -- you don't have the incentives in place for the negotiator to maximize the deal. If nobody's throwing themselves into pursuing sponsorships, the overall revenues of the league fall. So what you'd need is not merely shared revenues but a whole new centralized structure whereby the league negotiates all stadium revenues.

Or you could just let the team keep a cut.

 

[fgssand]

Yes, that's the entire sticking point here. The lower revenue teams want all of it to go into the general fund; the higher revenue don't want to contribute one red cent. You'd think if they'd figure around 30% or some other reasonable figure, this deal would get done in 5 minutes, but they're all idiots.

I find it incredible that a middle ground cannot be found. The owners, as a group, are highly successful businessmen, how can they possibly botch this negotiation. They are quite possibly ruining the game as we know it today. Of course the game will survive whatever they do, but this is so not necessary.

 

[flutie2phelan]

The 100% sharing of tv rights makes sense because the tv deal is negotiated collectively by the league. 100% sharing of rights negotiated by individual teams is quite obviously a bad business model -- you don't have the incentives in place for the negotiator to maximize the deal. If nobody's throwing themselves into pursuing sponsorships, the overall revenues of the league fall. So what you'd need is not merely shared revenues but a whole new centralized structure whereby the league negotiates all stadium revenues.

Or you could just let the team keep a cut.

As ever, a solid point by patchick!

I hope it is clear that i am not proposing or recommending the model i described. Rather ... that is my understanding of how the parties actually intend to implement their preliminary agreement we have heard about.

 

[spacecrime]

I find it incredible that a middle ground cannot be found. The owners, as a group, are highly successful businessmen, how can they possibly botch this negotiation.

It is only our opinion that they are botching it. They obviously believe they are working in their own best interests.

We have here 32 men who have the business acumen to become billionaires. They are in agreement that they are pursuing the proper tactic. We wage slaves, whose knowledge of what is required to keep a franchise fanancially viable is gleaned from talking to other wages slave on the internet and watching ESPN, sit back and say the financiers are botching it.

Kind of funny to think about it.

I suspect that they will do okay for themselves.

And I suspect in the end that football will survive just fine.

If we get this excited with the end of the contract still 2 years off, we'll all be having heart attacks if they don't get a deal done in two years.

Even if they don't have a cap, so what? Wasn't football fun to watch before 1994?

 

[spacecrime]

Your main point. Add up the naming rights for all 32 NFL stadia. Divide evenly, and cut 32 checks for that amount. That is the redistributionist ideal formula.

I know. Doesn't make sense to me either.

Perhaps if all the stadiums sold the naming rights it might make a little more sense. But the Bengals and others perfer not to bother to go through the effort, or for whatever reason, have not sold naming rights. So why should they get money from the teams that did all the work and sold the name?

A couple years ago, my sister-in-law in Georgia told me you could buy Atlanta seasons tickets for a hundred bucks. That's ten bucks a game. But why should Blank be concerned, because he can dump the all those hundred dollar checks into a pot, and collect $2000 checks from NE, Pitt, Seattle, GB, Denver, etc etc. Bidwell in AZ can alienate all his fans by not drafting home town hero T Suggs, perfering to trade down to avoid the high cost of signing a top draft pick. So no one attends games any more. Why should he be worry. Most owners work hard to fill seats. He can make just as much money doing nothing., and collecting checks whose money orginated with NE fans. pay your $40 parking, knowing most of it will go to other teams who don't get the parking revenue because the stadiums are owned by states/cities.

What kind of business model is this?

I jsut don't understand the logic of it.