NFL Revenue Sharing: Wilson vs Kraft...

[DaBruinz]

Calm down, man. You're practically frothing.

I'm quoting the NFL figures for TOTAL revenues.

I am calm. This conversation was had LAST YEAR during all the talks about the CBA.

Now, would you care to actually provide a true quote? You have claim you did, but you haven't provided them.

I can provide you with the numbers from the NFL contracts and the numbers that those contracts provided last year.

I have no idea what numbers you're looking at. But the total revenues for the Bills last year were $150 million, and that includes TV rights fees, obviously. They made about $28 million in ticket sales. They also made $10 million in tax from the city. That means, with a 102 million cap, they spent $60% of revenues on player costs. The Patriots, who make twice as much revenue, spent 30% on player costs. That's well and good. The Patriots deserve to make more of a profit because they are a big market team. But if you take this scenario into the future with the new CBA with a salary cap that's rising much much faster than the revenue growth of small market teams, it's easy to see that a bigger and bigger chunk of the Bills' revenues will have to go toward paying its players.

Really? So want everyone to believe that the Bills didn't make anything on concessions? Anything on sales of merchandise?

What's so hard to understand? Why are you confused by this?

There is nothing hard to understand. What you clearly missed is that the Bills have to spend very little, if any, of the money they make outside the TV contracts on the actual paying of player's salaries.

See, the difference here is that I don't count the TV revenue that each team gets because each team gets it. That makes them even in that aspect. I'm talking about the contracts from ESPN, DirecTV, ABC, and CBS. That is what pays the player salaries. Not ticket sales.

As for this quote: "Also, why is there no way that these teams aren't going to sell million dollar luxury boxes, nor regional tv rights or regular season radio rights? You haven't offered up squat for an argument as to why they won't be able to do that."

The Patriots market to 6-10 million people, the Bills to 2 to 3 million people. let me know the next time an advertiser agrees to pay just as much for a market that's 1/3rd the size of the 5th biggest market in America. In short, Boston is a big fish. One of the biggest markets in the US. You can't ask Buffalo to compete against that unless you want to move to a Major league Baseball model.

This isn't well thought out by you. Advertisers pay the TV Netowrks. Its through them that the NFL gets its lucrative contracts. Those contracts are divided evenly. So, in essence, advertisers are paying the same for the Pats as they are for Buffalo because the money they provide is going into the same pot.

Now, for individual advertisers, I agree to an extent. But, one of the things that Kraft has done is invest locally. And that helps bring in advertising dollars. And there is nothing that says that Ralph Wilson can't come to an agreement on naming rights that include his name. Like, for instance, HSBC's Ralph Wilson Stadium.

Toronto isn't a small city and they do like football up there. What says that Wilson can't work with the NFL to develop a marketing campaign for that area. That would increase the size significantly.

And by the way, Baseball shares its national TV package, But they still have revenue disparities, huge ones. Yankees pay players $210 million, the Royals pay $35 million. Good luck.

There are revenue disparities in Baseball because teams like the Yankees are still allowed to own their own TV network and generate millions from that because they have exclusive rights to it and it generates hundreds of millions of dollars. That isn't allowed in the NFL. The Cowboys and Patriots both tried to do it and were told they couldn't.

 

[upstater1]

I am calm. This conversation was had LAST YEAR during all the talks about the CBA.

Now, would you care to actually provide a true quote? You have claim you did, but you haven't provided them.

I can provide you with the numbers from the NFL contracts and the numbers that those contracts provided last year.





Really? So want everyone to believe that the Bills didn't make anything on concessions? Anything on sales of merchandise?



There is nothing hard to understand. What you clearly missed is that the Bills have to spend very little, if any, of the money they make outside the TV contracts on the actual paying of player's salaries.

See, the difference here is that I don't count the TV revenue that each team gets because each team gets it. That makes them even in that aspect. I'm talking about the contracts from ESPN, DirecTV, ABC, and CBS. That is what pays the player salaries. Not ticket sales.



This isn't well thought out by you. Advertisers pay the TV Netowrks. Its through them that the NFL gets its lucrative contracts. Those contracts are divided evenly. So, in essence, advertisers are paying the same for the Pats as they are for Buffalo because the money they provide is going into the same pot.

Now, for individual advertisers, I agree to an extent. But, one of the things that Kraft has done is invest locally. And that helps bring in advertising dollars. And there is nothing that says that Ralph Wilson can't come to an agreement on naming rights that include his name. Like, for instance, HSBC's Ralph Wilson Stadium.

Toronto isn't a small city and they do like football up there. What says that Wilson can't work with the NFL to develop a marketing campaign for that area. That would increase the size significantly.





There are revenue disparities in Baseball because teams like the Yankees are still allowed to own their own TV network and generate millions from that because they have exclusive rights to it and it generates hundreds of millions of dollars. That isn't allowed in the NFL. The Cowboys and Patriots both tried to do it and were told they couldn't.

You may have missed this, but I wrote this a ton of times. The Bills are not suffering right now, they are making a lot of money. $10 million in profit would make any businessman happy. I've repeatedly stated this.

What we're talking about here is the FUTURE. The current CBA will take the salary cap above the Bills projected TOTAL revenue. Unless you can tell me how you can pay more than you take in without taking out a loan, that means that, although they are making money now, in the future, they won't be.

Here, read this: http://www.jacksonville.com/tu-online/stories/012107/jag_7466894.shtml

As the Patriots are now paying 30-35% of total revenues, the Bills are paying 60% or more. As the cap rises, the Patriots will be paying the same amount if they can increase revenues at the same rate, but if revenues flatten out, then more money will go the players. Whereas in Buffalo, without a huge increase in revenue, the players salaries will rise to near 100% of revenues in several years, unless Buffalo takes the baseball approach and decides to spend only 2/3rds of the cap.

 

[DESERTPAT]

I'm one of the senior citizens on this panel. I don't suggest for a

minute that the Bills move to another city. I would be quite unhappy

if the Pats were a low revenue team.

I just question why Ralph Wilson can't set his ego aside and collect

two or three million dollars a year for naming rights to the stadium.

Also, why can't he raise ticket prices a little to be more in line with

the rest of the NFL. Buffalo may be a depressed area with relatively low

wages but I know that the fans who pay over $100 a ticket to watch the

Pats play aren't all doctors and lawyers. They're mostly regular guys.

and don't forget the Patriots are PAYING FOR THEIR OWN STADIUM unlike the cincinatti's, phoenix's and indianapolises of the world. How old is Ralph Wilson Stadium? is it not paid for already? I agree with Bob Kraft, let em show a little drive and stop trying to take the easy way out.

 

[FreeTedWilliams]

Wilson is one of the last of the "old guard" owners. And he needs to go. I have spent some quality time in upstate New York, and the Bills have a great fanbase up there. Do not discount the population of what they call the "golden horseshoe" which is the basically area from Buffalo to Toronto (about 100 miles). The total population for that area is 8.6 million people. Wilson needs to start drawing from these areas. He also gets to negotiate radio broadcasting rights in both the US and Canada. There are plenty of people and plenty of money in the area to support a pro-football team.

If it is too much on WIlson, I guarentee there are plenty of people in Toronto who would glady buy his football team and move them into the Rodgers Center. Imagine what they would get for those hotel rooms that look out over the field?

 

[DaBruinz]

You may have missed this, but I wrote this a ton of times. The Bills are not suffering right now, they are making a lot of money. $10 million in profit would make any businessman happy. I've repeatedly stated this.

What we're talking about here is the FUTURE. The current CBA will take the salary cap above the Bills projected TOTAL revenue. Unless you can tell me how you can pay more than you take in without taking out a loan, that means that, although they are making money now, in the future, they won't be.

Here, read this: http://www.jacksonville.com/tu-online/stories/012107/jag_7466894.shtml

As the Patriots are now paying 30-35% of total revenues, the Bills are paying 60% or more. As the cap rises, the Patriots will be paying the same amount if they can increase revenues at the same rate, but if revenues flatten out, then more money will go the players. Whereas in Buffalo, without a huge increase in revenue, the players salaries will rise to near 100% of revenues in several years, unless Buffalo takes the baseball approach and decides to spend only 2/3rds of the cap.

A few things.
1) Teams are required to spend, I believe, a minimum of 85% of the allocated cap money.

2) The television contracts that were just renewed, break down like this:
FOX - 712.5 million
NBC - 622.5 million
DirecTV - 700 million
ESPN/ABC - 1.15 billion

(I am correcting myself from when I said 4 billion, its only 3.1 billion).

http://en.wikipedia.org/wiki/NFL_on_television
http://sports.espn.go.com/nfl/news/story?id=1918761
http://coba.georgiasouthern.edu/depts/sed/inthenews/2006_10_30_Tony.pdf

At 3.1 billion divided across 32 teams, that is 96.875 million per team. So, this year, every team had to shell out 6 million (plus signing bonuses) from their own pockets.

In 2012, if everything were to stay the same, each team would be shelling out 51.2 million. So, yes, I can see how that would put the Bills under while teams, like the Patriots who have maximized their revenue through local advertising and putting money back into the surrounding businesses, would be at an advantage.

3) If the revenue flattens out, then so does the salary cap. You won't see the giant leaps that are currently projected. That was the beauty of the salary cap the way the NFL did it. If revenues don't increase much, then neither does the salary cap.

 

[DaBruinz]

and don't forget the Patriots are PAYING FOR THEIR OWN STADIUM unlike the cincinatti's, phoenix's and indianapolises of the world. How old is Ralph Wilson Stadium? is it not paid for already? I agree with Bob Kraft, let em show a little drive and stop trying to take the easy way out.

Just a minor correction, Kraft did get a $150 million loan from the NFL to help build the stadium, though he's been paying that back as part of his expenses, I am sure.

 

[spacecrime]

IMO, all sides in this have good points. Even if Wilson sold naming rights it really isn't that much money and there isn't much for local business's to put thier names all over the stadium like the Razor that'd pull in much money either.

No one is asking Wilson to make up the deficit. They are asking him to do what he can. Most teams get money from selling stadium rights. Wilson wants some of this money. Isn't the first step to sell the rights to his stadium?

I agree with revenue sharing. Everyone make what they can and share in the profits.

It isn't revenue "sharing" when some teams will not be bothered to try to make what they can, and only want handouts.

Further, Wilson's statement, "Go to a poor person and get money, go to a rich person and get advice" should be challenged. Kraft, the rich person, IS giving him money. Wilson is being ungrateful not to recognize that Kraft is putting money in his pocket. Further, that "Go to a poor person and get money" is equally bogus. Wilson, the supposed poor person, is not giving anyone any money. He is demanding that money be given to him.

I cannot believe his statement is allowed to stand.

At times like this, I really hope guys like Wilson torpedo the revenue sharing program and let it be every team for himself. It would serve him right.

 

[upstater1]

A few things.
1) Teams are required to spend, I believe, a minimum of 85% of the allocated cap money.

2) The television contracts that were just renewed, break down like this:
FOX - 712.5 million
NBC - 622.5 million
DirecTV - 700 million
ESPN/ABC - 1.15 billion

(I am correcting myself from when I said 4 billion, its only 3.1 billion).

http://en.wikipedia.org/wiki/NFL_on_television
http://sports.espn.go.com/nfl/news/story?id=1918761
http://coba.georgiasouthern.edu/depts/sed/inthenews/2006_10_30_Tony.pdf

At 3.1 billion divided across 32 teams, that is 96.875 million per team. So, this year, every team had to shell out 6 million (plus signing bonuses) from their own pockets.

In 2012, if everything were to stay the same, each team would be shelling out 51.2 million. So, yes, I can see how that would put the Bills under while teams, like the Patriots who have maximized their revenue through local advertising and putting money back into the surrounding businesses, would be at an advantage.

3) If the revenue flattens out, then so does the salary cap. You won't see the giant leaps that are currently projected. That was the beauty of the salary cap the way the NFL did it. If revenues don't increase much, then neither does the salary cap.

Just as an FYI, Wilson isn't moaning that the Patriots are making a lot more money than he is. Nor is he oaning because the Patriots get to keep their luxury box money. He's complaining that they want to keep that money, and they went ahead and agreed to increase the player's share of the total revenues. That's the main difference for him. So, not only is the salary cap skyrocketing (which, presumably, as you argue, will be contained by the TV revenues) but every team--including the Patriots--is going to operate on a significantly lower margin because of the % increase. Wilson is simply saying he's now feeling the squeeze because the TV money can't compensate for the % increase.

 

[upstater1]

No one is asking Wilson to make up the deficit. They are asking him to do what he can. Most teams get money from selling stadium rights. Wilson wants some of this money. Isn't the first step to sell the rights to his stadium?

I agree with revenue sharing. Everyone make what they can and share in the profits.

It isn't revenue "sharing" when some teams will not be bothered to try to make what they can, and only want handouts.

Further, Wilson's statement, "Go to a poor person and get money, go to a rich person and get advice" should be challenged. Kraft, the rich person, IS giving him money. Wilson is being ungrateful not to recognize that Kraft is putting money in his pocket. Further, that "Go to a poor person and get money" is equally bogus. Wilson, the supposed poor person, is not giving anyone any money. He is demanding that money be given to him.

I cannot believe his statement is allowed to stand.

At times like this, I really hope guys like Wilson torpedo the revenue sharing program and let it be every team for himself. It would serve him right.

Everyone here is criticizing Wilson, including me. I'm more concerned about the game of football. And I think he has a point that's being lost in his old crotchety brain.

 

[lobster]

The problem is the financial stakes are so large now for the profitable clubs, that types like Wilson could be shoved aside by the other owners.

 

[AzPatsFan]

Calm down, man. You're practically frothing.

I'm quoting the NFL figures for TOTAL revenues.

I have no idea what numbers you're looking at. But the total revenues for the Bills last year were $150 million, and that includes TV rights fees, obviously. They made about $28 million in ticket sales. They also made $10 million in tax from the city. That means, with a 102 million cap, they spent $60% of revenues on player costs. The Patriots, who make twice as much revenue, spent 30% on player costs. That's well and good. The Patriots deserve to make more of a profit because they are a big market team. But if you take this scenario into the future with the new CBA with a salary cap that's rising much much faster than the revenue growth of small market teams, it's easy to see that a bigger and bigger chunk of the Bills' revenues will have to go toward paying its players.

What's so hard to understand? Why are you confused by this?

As for this quote: "Also, why is there no way that these teams aren't going to sell million dollar luxury boxes, nor regional tv rights or regular season radio rights? You haven't offered up squat for an argument as to why they won't be able to do that."

The Patriots market to 6-10 million people, the Bills to 2 to 3 million people. let me know the next time an advertiser agrees to pay just as much for a market that's 1/3rd the size of the 5th biggest market in America. In short, Boston is a big fish. One of the biggest markets in the US. You can't ask Buffalo to compete against that unless you want to move to a Major league Baseball model.

And by the way, Baseball shares its national TV package, But they still have revenue disparities, huge ones. Yankees pay players $210 million, the Royals pay $35 million. Good luck.

What is the cost for the mortgage on Ralph Wilson Stadium, that cost $15 million in 1973? Is there one left? Or was it publicly financed back then by Erie county taxpayers?

What is the cost of the privately financed mortgage on $400,000,000 Gillette Stadium that Kraft pays every year?

Doesn't that count for anything?

By my easy guess it probably about $20 million a year outgoing, instead of $10 million incoming or a delta of $30 million a year toward the Bills.

I don't cry for the Indy or Tennessee teams they abandoned bigger markets and chose the tiny places to go there. Houston is the Fourth largest market that Oilers left. The bolts abandoned LA for SD, not choosing to compete and share the second biggest market. Phoenix is the 6th largest market and the Bidwells are always crying poverty. They abandoned Chicago the second or third largest market for tiny St Louis as did the Rams who abandoned LA for St Louis.

Shortsighted fools.

Before Al Davis dies, he will abandon Oakland for LA that he's already claimed, and will claim again.

 

[DESERTPAT]

Just a minor correction, Kraft did get a $150 million loan from the NFL to help build the stadium, though he's been paying that back as part of his expenses, I am sure.

What difference does it make, its a loan that has to be paid back! Don't recall what gillette costs but i figure at least $500 million which leaves another $350 million in loans, unless his father-in-law fronted him the cash.

 

[upstater1]

What is the cost for the mortgage on Ralph Wilson Stadium, that cost $15 million in 1973? Is there one left? Or was it publicly financed back then by Erie county taxpayers?

What is the cost of the privately financed mortgage on $400,000,000 Gillette Stadium that Kraft pays every year?

Doesn't that count for anything?

By my easy guess it probably about $20 million a year outgoing, instead of $10 million incoming or a delta of $30 million a year toward the Bills.

I don't cry for the Indy or Tennessee teams they abandoned bigger markets and chose the tiny places to go there. Houston is the Fourth largest market that Oilers left. The bolts abandoned LA for SD, not choosing to compete and share the second biggest market. Phoenix is the 6th largest market and the Bidwells are always crying poverty. They abandoned Chicago the second or third largest market for tiny St Louis as did the Rams who abandoned LA for St Louis.

Shortsighted fools.

Before Al Davis dies, he will abandon Oakland for LA that he's already claimed, and will claim again.

Well, like I said, Kraft should try to extract as much money as he needs. He's the investor. He deserves it.

My problem is with the balance of play on the field. I'd like tos ee the NFL preserve a balance so that each team brings a similar payroll to the table.

In the NFL, you have guys who there when the franchises started (Wilson) and they became filthy rich. Then you have the guys who got a municipality to build for them (McNair in Houston). And then the Krafts who did it alone (or borrowed from the NFL). You're not going to get any of these people to smpathize with the other. Kraft can complain to McNair that he had to finance it all himself. McNair can simply say, tough. You shouldn't live in a Democrat dominated state like Massachusetts. Wilson is like the dot.com guys who start things up, like Mark Cuban, and they become billionaires overnight because they were on the ground floor of a good thing.

Kraft, like the Red Sox owners, is a bit late to the party. The Red Sox owners are paying a ton of money is penalties to poorer teams, even though, if you looked at their balance sheet, they owe a huge amount to the banks for the purchase price.

The way I look at it, Kraft lives in a big costly house with lots of property tax, and in the end he'll have to shell out a lot of money to live in that house. But because that house is in a rich suburb, and it's a beautiful house, it's also worth a lot more than Ralph Wilson tract house near the railroad tracks, a house which Ralph paid very little for.

As in life, Kraft is paying the property taxes which allow Ralph's kids to attend a pretty good public school.

 

[NJSportsFanatic]

Boston sports fans has zero regard for small market teams just like New Yorkers. It's the Twins fault that the Twins can't afford players because the Red Sox overpay people. It's the Vikings and BIlls fault that they got problems.

 

[WestPat]

Boston sports fans has zero regard for small market teams just like New Yorkers. It's the Twins fault that the Twins can't afford players because the Red Sox overpay people. It's the Vikings and BIlls fault that they got problems.

mmm...yes!

 

[BigEZPatsFan76]

Boston sports fans has zero regard for small market teams just like New Yorkers. It's the Twins fault that the Twins can't afford players because the Red Sox overpay people. It's the Vikings and BIlls fault that they got problems.

If you can't run with the big dogs, then stay on the porch !!!


EZ76

 

[unoriginal]

Boston sports fans has zero regard for small market teams just like New Yorkers. It's the Twins fault that the Twins can't afford players because the Red Sox overpay people. It's the Vikings and BIlls fault that they got problems.

The difference is the Bills do not need to spend as much as the two richest franchises, they only need to spend to about half the league average of per-team income. This is easily done, as evidenced by Buffalo spending the vast preponderence of their salary cap using revenue they ganied from the league TV contract. In the NFL, revenue sharing props up the small-market teams, while the salary cap keeps down the big-market teams.

If you're still having trouble turning a profit in that kind of anti-competitive market, maybe you shouldn't run an NFL team anymore. I'm sure there are 32 people somewhere in this country that can make every team in the league financially successful.

 

[PatsFan37]

I believe there's a different point here, tell me if this makes sense. If you bought an NFL team 10 years ago, you would have taken a swift ride to prosperity simply by being a part of this marvelous 32-team cartel. Yearly profits are only part of the equation. The other part is the sales value of the team as a business.

It's like owning a house on a street that just became the most desirable neighborhood in town. Wilson liked the way it was before and is complaining about the property taxes. Kraft wants him to mow his lawn and take that rusted car out of the driveway.

There's no denying that the Patriots meteoric rise in value put a luster on every other team. If Wilson really was poor, he'd sell, take the cash, and let some other owner spiff up the property. But Wilson is a rich old man who likes his membership in the country club and his name on the mantel. For him to make that quote about the rich and the poor is beyond disingenuous.

The NFLPA is demanding that teams maximize revenue so the players can make as much as possible. Kraft does that, and doesn't want to subsidize the teams that don't. So he makes the point about the name on the stadium because it's symbolic of rich old fans who refuse to run their team like a business.

Wilson's is a feel-good story if you feel good about a rich old egotist; someone who thinks having his name on the stadium is more important than paying the guys who take the field.

It's a symbol, but it's an important one.

 

[aabtec]

Boston sports fans has zero regard for small market teams just like New Yorkers. It's the Twins fault that the Twins can't afford players because the Red Sox overpay people. It's the Vikings and BIlls fault that they got problems.

Yes it is the fault of the Vikings and the Bills. Football is a business. If you can't make the money you want in spot A move to spot B. No one should be forced to subsidize the Vikings and the Bills.

 

[upstater1]

The difference is the Bills do not need to spend as much as the two richest franchises, they only need to spend to about half the league average of per-team income. This is easily done, as evidenced by Buffalo spending the vast preponderence of their salary cap using revenue they ganied from the league TV contract. In the NFL, revenue sharing props up the small-market teams, while the salary cap keeps down the big-market teams.

If you're still having trouble turning a profit in that kind of anti-competitive market, maybe you shouldn't run an NFL team anymore. I'm sure there are 32 people somewhere in this country that can make every team in the league financially successful.

We're talking abput the future. The Bills are turning a handsome profit right now. I thought this was pretty clear.

Maybe some of you enjoy watching the Yankees and the Red Sox. I don't. I can care less watching two rich guys with ego complexes and small you-know-whats trying to compensate by throwing money at sport.