NFL Revenue Sharing: Wilson vs Kraft...

[upstater1]

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.

OK, here, I'll try again. I really don't give a damn about Kraft, Wilson or McNair. All of them have become filthy rich off the fans.

I'd just as soon, however, prefer that the NFL doesn't go the route of MLB. That's my only point. Some of you can gear up your interest to watch the red Sox v. Royals in May, or Penn St. against Akron. Me, that kind of stuff bores me to death. That's why I'm a big NFL fan. Any Given Sunday will not turn into Once Every Blue Moon.

 

[E Belichick Unum]

Part of the problem is the way that the two teams think. Kraft has been a businessman. He came into the Patriot situation knowing what he had to do to succeed and invested his own money to make sure that he did succeed. Ralph Wilson did not have to invest his own money to build a stadium. He became an owner in 1960 and as one probably had to pay an entrance fee of $25,000. Below is a brief history of the stadium. Seems he has sold the naming rights and then reacquired them.

http://www.stadiumsofnfl.com/afc/RalphWilsonStadium.htm

Home of the Buffalo Bills for nearly thirty years, Ralph Wilson Stadium has undergone many changes over the years. In 1959, Ralph Wilson was awarded a NFL franchise, that began playing in 1960 at War Memorial Stadium. War Memorial Stadium was a small stadium consisting of approximately 30,000 seats. In 1965, the stadiums' capacity was increased to 46,000. However, in the late 1960’s Bills owner Ralph Wilson wanted a new stadium for the team. After bonds were approved to build a new stadium, a 130 acre tract of land outside Buffalo was bought to build the stadium. Construction began on April 4, 1972. Once the stadium was completed in 1973, Rich Foods, bought the naming rights to the stadium, thus getting its name Rich Stadium. The Bills became one of the first teams ever to sell the naming rights to their stadium. In 1998, the stadium was renamed Ralph Wilson Stadium after the Bills owner.

The Buffalo Bills christened Ralph Wilson Stadium on August 17, 1973. The stadium consists of three decks of blue and red seats. The lower and second levels of seats circle the entire Fieldturf playing field. An upper level of seats are located on both sides of the playing field. The playing field is located 50 feet below ground level, eliminating long walks to the upper deck. Ralph Wilson Stadium has underwent many changes over the years. In 1984, the stadium's capacity was increased to 80,290 with the addition of 16 executive suites, and in 1992, when 24 more executive suites were added. More additions were completed in 1994. The Red Zone and Goal Line clubs, which are enclosed of glass and consist of 500 seats were added, along with 14 executive suites. The main addition in 1994 was a massive 31.5 feet high and 41.5 feet wide JumboTron video/scoreboard. Additional expansions occurred in 1999. Renovations included the addition of 76 dugout suites, seat warmers for club seats, and cup holders for all seats. Ralph Wilson Stadium continues to be one of the NFL’s best stadiums.



I don't know what his lease situation is like. I am not sure if he get any luxary box money. I am pretty sure that there aren't any PSLs. If you have ever been there the stadium is huge, it reminds me of old Sullivan Stadium. It is a contrete bowl in the ground. Parking is $10.00. It is in the middle of a neighborhood and the people who live there also make money off of the stadium. Buffalo is a pretty depressing town, but there are millions of people in the area and in Canada who follow the team.

Bob Kraft isn't telling them to screw, he's telling them to make an effort to maximize your situation. Didn't Jonathon Kraft use Ralph Wilson as one of the people who needed help, and Mike Brown as one wh shouldn't get any? Seems to me that the Krafts were sympathetic toward the Bills at one time. There must be more to this than is out in the press.

 

[unoriginal]

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.

Meanwhile, in the recent past...

If the Patriots can use 30% of gross revenues (i.e. not the revenues defined by the CBA) to pay their players, and Buffalo has to use 60%, well then guess what? The Patriots are the new Red Sox, and the Bills are the new Royals.

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.

So, are the Bills a "low revenue" team in the fourth quartile of earnings, feeling the cash flow burn as Arthur Blank implies, and making half as much in revenue as the Patriots, or are they making "a lot of money," as you say elsewhere?

Based upon what I've read in the article and in the thread, I've come to the conclusion that the Bills are substantially under-performing most other NFL teams financially, both now and, quite likely, in the future as well. I don't see what is so "handsome" about either their current performance or their future business plan, which consists primarily of whining about the money that's going to the players, hiring second-rate coaches, giving away tickets, and generally treating their players like crap.

Nobody wants to see the MLB happen to the NFL, which means nobody wants to see stupid owners sit around on their ass all day naming things after themselves instead of doing their job and figuring out ways to get their revenue in the vicinity of the league median, a task which has been made very easy for small market owners thanks to the twin blessings of unprecedented revenue sharing and the hard salary cap.

The task facing the Bills is not onerous. One of the most distinctive franchises in the most popular sport in the country with access to the media mecca of Toronto should be able to cover operating expenses when only 65% of the revenue goes towards your most important asset, your various employees. If that looks like a gauntlet to Wilson its because he's not willing to take even the first small step. I can understand the frustration about changing a great name, like "Mile High Stadium." Not one person in the world other than Ralph Wilson would be upset if the Ralph was no longer the Ralph.

Just so this isn't all about Wilson, how about Arthur Blank? That man is a fool. The only way you could fail to mint money in Atlanta is if you consistently fielded a terrible team that no one cared about, played in an indoor facility for no reason, and embraced the wrong QB as your adopted son. Seeing as how Art Blank has done none of these things, I can only suppose he must be really bad with money.

 

[Rob0729]

The biggest problem isn't as much small market vs. big market as it is smart, forward thinking businessmen (Kraft, Daniel Snyder, Jerry Jones) vs. either foolish businessmen (Mike Brown from Cincy) or out of touch businessmen (Wilson).

There are plenty of small market teams that are not complaining and are doing fine. The two biggest complainers are Brown and Wilson and the common thread between the two is neither seem to know a single thing about marketing and are both notoriously cheap.

Neither Brown or Wilson do 1/10th of the marketing deals that guys like Snyder, Kraft, or Jones do for their team and many of the marketing revenue programs can be done in any market. The Bills or Bengals can easily have Pepsi be the official soft drink of their stadium or the Reebok being the official shoe. Those two teams may not get the same amount of money as a Patriots or Redskins might get, but it will still be a substancial chunk of change. Kraft, Snyder, and other smart businessmen sell sponsorship rights for anything not nailed down from parking lots to the official sponsors of TD celebrations (anyone who has been to a game knows that Monster.com pops up on the jumbotron whenever we score). Wilson won't even sell the name to his stadium and in fact bought the rights to the naming rights himself (he leases the stadium) so the county wouldn't sell the naming rights to a company.

And it doesn't matter if there is no local company in Buffalo to buy the naming rights. Naming rights are usually bought by national companies and many times, they are not headquartered in the city or state of the stadium including Staples Center (Mass company for a LA team), RCA Dome (NY/NJ company for an Indianapolis team), Pro Player Stadium which is a brand of Fruit of the Loom out of KY for a Miami team (at least until recently), and FedEx Field (a Tennessee company for a Washington or actually Virginia team).

Speaking of leasing the stadium, that is another reason why Wilson has problems with his cash flow. He doesn't own his own stadium. Even large market teams like the Jets are hurt for this reason. The Jets are in the largest market in the country and they are one of the have-nots in terms of revenue because they lease Giants Stadium from the Giants and the Giants own all concessions and naming rights. Wilson needs to find funding for his own stadium.

 

[upstater1]

So, are the Bills a "low revenue" team in the fourth quartile of earnings, feeling the cash flow burn as Arthur Blank implies, and making half as much in revenue as the Patriots, or are they making "a lot of money," as you say elsewhere?

Both. Why are they mutually exclusive? The Bills made $10 million last year. That qualifies as a lot of money.

The task facing the Bills is not onerous. One of the most distinctive franchises in the most popular sport in the country with access to the media mecca of Toronto should be able to cover operating expenses when only 65% of the revenue goes towards your most important asset, your various employees. If that looks like a gauntlet to Wilson its because he's not willing to take even the first small step. I can understand the frustration about changing a great name, like "Mile High Stadium." Not one person in the world other than Ralph Wilson would be upset if the Ralph was no longer the Ralph.

The media mecca of Toronto, eh? Frankly, the Buffalo Bills have so very little to do with anything Toronto. The Canadian fans that come to Bills games are from Ft Erie and Mississauga. If you think Toronto fans sit there rooting for the Bills, that's frankly not what's happening. The whole point of this is that 65% is going to the players now. And that's just fine. Wilson should be happy as pie that he's making 10 mill a year. But that number, with the new CBA, is about to increase to 100%. In other words, revenues $150 million. The cap will equal $150 million. Can the Bills grow fast enough to stay ahead of the cap? I doubt it.

The players are now going to get upwards of 60% million of the total in revenues. That means on average teams will be paying 60%+. The old number was an average of 55%. So the Bills skewed it with their 65%. The Bills can exect that their payroll cost as a percentage of revenues will rise AT LEAST as much as the percentage rose for the players in the new CBA. At least 5% but really a heckuva lot more.

 

[upstater1]

The biggest problem isn't as much small market vs. big market as it is smart, forward thinking businessmen (Kraft, Daniel Snyder, Jerry Jones) vs. either foolish businessmen (Mike Brown from Cincy) or out of touch businessmen (Wilson).

There are plenty of small market teams that are not complaining and are doing fine. The two biggest complainers are Brown and Wilson and the common thread between the two is neither seem to know a single thing about marketing and are both notoriously cheap.

Neither Brown or Wilson do 1/10th of the marketing deals that guys like Snyder, Kraft, or Jones do for their team and many of the marketing revenue programs can be done in any market. The Bills or Bengals can easily have Pepsi be the official soft drink of their stadium or the Reebok being the official shoe. Those two teams may not get the same amount of money as a Patriots or Redskins might get, but it will still be a substancial chunk of change. Kraft, Snyder, and other smart businessmen sell sponsorship rights for anything not nailed down from parking lots to the official sponsors of TD celebrations (anyone who has been to a game knows that Monster.com pops up on the jumbotron whenever we score). Wilson won't even sell the name to his stadium and in fact bought the rights to the naming rights himself (he leases the stadium) so the county wouldn't sell the naming rights to a company.

And it doesn't matter if there is no local company in Buffalo to buy the naming rights. Naming rights are usually bought by national companies and many times, they are not headquartered in the city or state of the stadium including Staples Center (Mass company for a LA team), RCA Dome (NY/NJ company for an Indianapolis team), Pro Player Stadium which is a brand of Fruit of the Loom out of KY for a Miami team (at least until recently), and FedEx Field (a Tennessee company for a Washington or actually Virginia team).

Speaking of leasing the stadium, that is another reason why Wilson has problems with his cash flow. He doesn't own his own stadium. Even large market teams like the Jets are hurt for this reason. The Jets are in the largest market in the country and they are one of the have-nots in terms of revenue because they lease Giants Stadium from the Giants and the Giants own all concessions and naming rights. Wilson needs to find funding for his own stadium.

This is just wrong. Have you been to Ralph Wilson stadium? There are marketing ads, banners and logos all over the place. Delaware North, M&T, HSBC, Wegmans, it's all over the place. As for leasing the stadium, not only does he get it for free but the taxpayers PAY HIM $10 million a year!!

 

[BigEZPatsFan76]

This is just wrong. Have you been to Ralph Wilson stadium? There are marketing ads, banners and logos all over the place. Delaware North, M&T, HSBC, Wegmans, it's all over the place. As for leasing the stadium, not only does he get it for free but the taxpayers PAY HIM $10 million a year!!

Well, then, that being the case, I would say more of the "problem" lies on Ralph Wilson, or his subordinates, or something that they are doing wrong, rather than the actual system itself. Sounds to me like HE is the one to blame for whatever "hard times" he may be drawing up.


EZ76

 

[Rob0729]

This is just wrong. Have you been to Ralph Wilson stadium? There are marketing ads, banners and logos all over the place. Delaware North, M&T, HSBC, Wegmans, it's all over the place. As for leasing the stadium, not only does he get it for free but the taxpayers PAY HIM $10 million a year!!

He may have some of the marketing deals, but not nearly as many as most teams. The biggest one is the stadium naming rights which he spent about $4 millions buying from the county in 1998 because the county had sold it to Rich Foods in 1973 and it had expired and Wilson thought that was wrong to sell sponsorship in the naming rights and bought the rights himself. The naming rights even for a small market team is like $3-4 million a year.

As for the rent, Wilson does pay rent to the stadium based on their average ticket price which maybe in some years. The county is repaying the Bills for renovations done to the stadium, but Wilson does not get paid to stay in the stadium. Wilson added club seats and luxary boxes about a decade ago and the county is paying him. No way does a relatively poor county like Erie County pay $10 million a year to keep them. Eventhough Pataki and Wilson are friends, no way would Pataki agree to pay $10 million a year out of the state coffiers to keep the Bills.

 

[upstater1]

Well, then, that being the case, I would say more of the "problem" lies on Ralph Wilson, or his subordinates, or something that they are doing wrong, rather than the actual system itself. Sounds to me like HE is the one to blame for whatever "hard times" he may be drawing up.


EZ76

Well, let me repeat myself again. Selling name rights isn't going to make up the huge shortfall. I opened my posts by blaming Ralph Wilson for not selling name rights. But that extra $3-4 million will take his payroll from $100 million to $104 million (assuming he stays at 65% of revenues). When the salary cap hits $150 million (and Ralph dies, doesn't exist on the face of the earth) the Bills will have a huge shortfall to make up. Unless they grow revenues at a faster pace than any team in the NFL has ever grown them before.

The stadium, by the way, was redone a few years ago, luxury boxes added, etc. It already had the Lambeau makeover.

 

[Brady-To-Branch]

I'm not taking sides on this issue, but I can help but feel that none of this would be taking place if an out-going commissioner didn't go behind the owners' backs to negotiate a CBA with the NFLPA and then tell the owners to take it or leave it.

IMO, the NFLPA is actually being run by a good 'ol boy group of agents and that Gene Upshaw is Tom Condon's stooge. It wouldn't surprise me if there's a work stoppage in 2 years. The NFLPA is getting brazen by the season.

 

[upstater1]

He may have some of the marketing deals, but not nearly as many as most teams. The biggest one is the stadium naming rights which he spent about $4 millions buying from the county in 1998 because the county had sold it to Rich Foods in 1973 and it had expired and Wilson thought that was wrong to sell sponsorship in the naming rights and bought the rights himself. The naming rights even for a small market team is like $3-4 million a year.

As for the rent, Wilson does pay rent to the stadium based on their average ticket price which maybe in some years. The county is repaying the Bills for renovations done to the stadium, but Wilson does not get paid to stay in the stadium. Wilson added club seats and luxary boxes about a decade ago and the county is paying him. No way does a relatively poor county like Erie County pay $10 million a year to keep them. Eventhough Pataki and Wilson are friends, no way would Pataki agree to pay $10 million a year out of the state coffiers to keep the Bills.

I'm an Erie county taxpayer, and I can tell you, our taxes go DIRECTLY to the Bills and, yes, the stadium. We just boguht a jumbotron this week!

By the way, we're talking about Erie County taxes. Pataki has nothing to do with this. In case people didn't know, county taxes in New York far exceed state taxes.

 

[Brady-To-Branch]

Market-wise, the one thing that the Bills have going for them is that they are the only NFL team that plays in the state of NY.

 

[Rob0729]

I'm an Erie county taxpayer, and I can tell you, our taxes go DIRECTLY to the Bills and, yes, the stadium. We just boguht a jumbotron this week!

By the way, we're talking about Erie County taxes. Pataki has nothing to do with this. In case people didn't know, county taxes in New York far exceed state taxes.

I looked at the lease online. The county pays the Bills back for renovations which includes the jumbotron, but they do not pay them any money to stay in the stadium.

Also, looking closer at the lease. Wilson probably keeps the tickets sales down specifically because of his lease because Erie County gets 50% of the net sales of revenue from ticket sales of tickets over the league average ticket price. So his own lease prevents him from competiting as much or more than the new CBA. So he really only has himself to blame because he cannot raise ticket prices to increase his revenue. The market won't support a huge increase and he cannot really generate much revenue unless he has a huge increase because of his lease.

 

[spacecrime]

There must be more to this than is out in the press.

You can't go wrong with a statement like this!

 

[spacecrime]

I'm an Erie county taxpayer, and I can tell you, our taxes go DIRECTLY to the Bills and, yes, the stadium. We just boguht a jumbotron this week!

Hey, that was nice of you, helping buy a jumbotron for them. Do you know what specific pixels you bought? Wouldn't it be great if all the taxpayers could control their pixels (turn them on or off) for one minute per game. You could send out a nice message to the county

 

[upstater1]

Hey, that was nice of you, helping buy a jumbotron for them. Do you know what specific pixels you bought? Wouldn't it be great if all the taxpayers could control their pixels (turn them on or off) for one minute per game. You could send out a nice message to the county

Believe me, I'm not doing cartwheels over this, especially as a Patriots fan! :bricks:

 

[Return of the Nizz]

Well, let me repeat myself again. Selling name rights isn't going to make up the huge shortfall. I opened my posts by blaming Ralph Wilson for not selling name rights. But that extra $3-4 million will take his payroll from $100 million to $104 million (assuming he stays at 65% of revenues). When the salary cap hits $150 million (and Ralph dies, doesn't exist on the face of the earth) the Bills will have a huge shortfall to make up. Unless they grow revenues at a faster pace than any team in the NFL has ever grown them before.

The stadium, by the way, was redone a few years ago, luxury boxes added, etc. It already had the Lambeau makeover.

Well the cap won't hit 150 until revenues have grown quite a bit. It's the beauty of the cap, it is based on revenues. The Bills make money every year. Comparing them to the Royals is a joke because in order to spend as much as the Yankees or even the Sox, they would have to lose about 100 million a year. When poor Ralphie starts losing that kind of coin then we can talk. But the simple fact is that guys like Kraft and Jones have made a ton of money for Ralph Wilson with what they've done to help this league.