Think the owners are being the stubborn ones? Think again

[Ring 6]

Simply not true. The owners' gave up their right to keep their books entirely secret when they made a deal with the NFLPA involving percentages of revenue.

What? Where does the deal say the union gets to look at the books?

There is no dispute over revenue calculations. If there were, then I would agree, but they have been 100% transparent with revenue. They have no obligation to be transparent with what they do with their 40%.

Between Celador v. Disney and a handful of other major court decisions in the entertainment industry these past two years, as well as Doty's decision over the NFL's lockout insurance in the TV deal, it's fairly clearly established that the NFL is obligated to deal in good faith to maximize the revenues it splits with the NFLPA, and if the NFLPA feels the NFL has failed to do this, the NFL will be forced to defend its operations in court.

They have not alleged this. Now you are saying the NFL should turn over their financials willingly so that the NFLPA can pore over them and see if they can sue them for something else? Really?

The financial information the league offered was deemed opaque to the point of uselessness by the banks and accounting firms advising the NFLPA.

Source? Rooney says they didnt even look at them, how did there banks and accounting firms pass judgement on what they did not even look at? I think you made this one up.

I've given several answers to this question. I don't think I've gotten a response to any of them.

I would respond if I saw one.

Again, if the owners turned over the financials(assuming they did it before decertification), what do you think would happen after that?
Because the reakl answer is that it would divide the sides further, because now they would each interpret them differently, and with 320 annual financial statements there is a gap as wide as the Grand Canyon for interpretation, and would now have to stop negotiation the agreement while they argue over what the financials say.

What do you think would happen if they did turn them over, and how would it help anything?

 

[convertedpatsfan]

If you are right, then the players initial offer was:

$9.3B x 50% = $4.65B / 32 teams = $145M per team - $20M benefits = $125M cap

That would be lower than the 2009 cap even though the revenue pool would be higher. If the benefits were more than $20M, then the cap would be even lower.

The owners 42% offer would result in about a $100M cap which would be a stunningly low figure. Every team in the league would be in cap jail at that figure.

So if you are correct and those percentages include benefits, then the players talk of "not giving anything up until the owners opened their books" doesn't make sense. Their offer would result in a cap decrease of over $10M per team versus what the old CBA would have paid in 2011. Somehow I can't see them being that generous and the owners not taking that generosity straight to the bank.

The 2009 cap figure isn't a good measuring stick because the owners opted out of the deal well before they even knew what that figure would be. They opted out before the 2008 season started, when the cap went from $109M to $116M. That was enough to unanimously vote to opt out. The 2009 cap figure was just like salt on a wound.

I factored in $27M based on the numbers from DeMaurice Smith. The owners figure was stunningly low, I agree, though the "final" figures showed them coming up quite a bit to $114M. However, that compares with the 2007 cap, when revenues were in the $6B range, not $9B+.

In 2005, the year before the previous CBA was negotiated, the cap was $84M. But the CBA deal changed the revenue formula, included all sorts of new revenue to split, and the cap went from a projected $94M to $102M in 2006, an increase of over 20%, and almost a 10% jump from what the previous CBA had forecast.

Which makes me think the owners were trying to reject all of the gains from the previous CBA, to pretend it never happened and start over. As a rough projection of 65% of TV/ticket revenues like in the old CBA, the 2009 cap would have been around $105 to $110M (with a zillion assumptions) compared to the $123M. Meanwhile, the players were offering a starting point that looked like the 2008 cap that made them opt out. It was lower than 2009 and what we would have seen in 2011 had the owners not opted out, but it wasn't about the 2009 figure so much as the owners hating the entire last CBA.

 

[upstater1]

What country are you in? And can I move there?

The highest cost most any business is its people. Paychecks, Benefits, Pensions, Insurance, Productivity etc.

Any business that employs people has been dealing with

Increased health insurance - up to 20% a year of a very high cost in the first place
Increased transportation costs - $.51 a mile as the feds currently set it - which is actually low compared to the true cost of fuel today
Increased utilities (killing manufacturing)

... and trying to meet this all on a "fixed income" as neither public nor private interests are able to foot the bill to accommodate all those increasing costs, with competition and a "take it or leave it" attitude keeping the economy halfway solvent

If you're seeing expenses going down anywhere its only because certain businesses are just getting by on their bootstraps, balancing both increased costs and increased competition.

But things are VERY very tight for nearly all businesses these days and they're just hoping to get by until the economy picks up. Not all will make it.

Their employees are in the same boat - with little if any increase in salary, but their share of benefits increasing along with the costs to the employer, making for a net loss to all

I'm not trying to use this to take sides with the owners - I'm just saying, if don't think expenses are increasing for business, you're not doing business in the USA.

Utility costs are down, I should know, I've been tracking them in my portfolio over the last couple of years! Transportation? Huh? You cited per mile transport. I assume you're talking about gasoline then. Oil is down from 1.40 a barrel. But, transport costs typically refer to the transport of goods. Shipping and fast freight. Cost for shipping are down 90%.

 

[upstater1]

I work in the real estate industry in New York, and live there as well.
They absolutely do not have full value assessment and absolutely do not reassess every year. It an assessment law. As far as I know there is only 1 community, in the Binghamton area the does not comply.
Your TAX ASSESSMENT RATES change every year, your assessed value can change based upon inflation, but your home is not reassessed every year. Could you imagine the expense involved in the tax collector inpecting and apprasing every house every year?
Assessments are based upon a year in the past (for some reason 1968 sticks in my mind but I'm not sure about that) and they are adjusted for inflation. If market values in your community have been in pace with inflation assessed value and market value may be similar, but thats just dumb luck.

You keep saying that but you're wrong. I mean, I don't know what to tell you. It is assessed every year. At full value. I went in four years in a row for assessment challenges. The person assigned to my neighborhood knew the particulars of my property down to square footage. She had to be corrected on the carriage house out back which has only storage space on the first floor. She knew all about the prices of all the homes on my street. They reassess every year at full value. I'm in NY state.

 

[upstater1]

I dont think NFL teams are renting ships.
Look, if you want to argue that operating a business is getting cheaper, there is nothing I can do about that, you simply are wrong.

You guys are the people that are generalizing this to business. So don't be ridiculous. So then let's start talking about the NFL. Maybe the cost of staple refills are going up.

 

[upstater1]

Because you were reply to my post where I typed what I just bolded.
It was ME who asked you where you got your info about what I just bolded, there was nothing about squabbling.

Yet, you still have absolutely nothing showing they are more profitable other than your impression that the HAVE TO BE.
Do you know what the cap was in 2006? Do you know what salary expenditures were? Do you think 40million dollar signing bonusses may have something to do with their profitability?

We're crossing wires here.

You quoted this from me:

The main factor in all of this is the Supplemental Revenue Plan. That was the hang-up last time, it's the same hang-up this time.

It has nothing to do with expenses or revenues since the margins for NFL teams have expanded since the signing of the last CBA. The NFL is not experiencing the hard times that other businesses have.

You then asked:

What are you basing this on? You cannot know whether this is a fact or not. What is your source?

Based on what I read, I thought you wanted clarification on what I wrote about the hangups with the Supplemental Revenue Plan, based on the post.

As for revenues, the league increased its TV package by 50%. For the same amount of games. The whole league, including players, was making more money with this deal than they were making in 2006.

That doesn't mean they are on sound financial ground. I was just pointing out they were making more money. If the cap continues to rise, then some teams are not going to keep up. That's the problem with the last CBA. That's what owners are trying to address.

 

[upstater1]

What Patriots franchise expenses would Kraft face and have they risen or dropped since the last CBA?

Utilities - electricity, gas/oil etc. in MA sharply higher
Property Taxes - in MA they have risen regardless of 'assessed value' - a joke in NE
Wages for non-players - assume a small % increase but I recall an article about some Patriots jobs eliminated (am I correct?) which would make this a net decrease
Health Insurance - substantial increase
Supplies for concessions - small decrease, not part of his cost structure as I believe he gets a % of revenue, so actually irrelevant
Travel - increase in airline, etc. fares; cabs & limos charge more now in MA region
Financial - increased govt paperwork requirements have raised the cost of doing business for all
Legal - self inflicted wound of preparing for Lockout has certainly raised Kraft's legal costs substantially

Revenues are another matter

Are we getting things confused here? We're talking since the last CBA, right? At the time of the last CBA, oil was at $140 a barrel.

Yes I know oil is up from last year. We're talking about the BOOKS though since 2006. Heck, since before 2009 since that's when the owners opted out.

Gasoline is high, but I haven't paid $4.50 a gallon yet, as I was doing in 2006.

 

[Ring 6]

We're crossing wires here.

You quoted this from me:



You then asked:



Based on what I read, I thought you wanted clarification on what I wrote about the hangups with the Supplemental Revenue Plan, based on the post.

As for revenues, the league increased its TV package by 50%. For the same amount of games. The whole league, including players, was making more money with this deal than they were making in 2006.

That doesn't mean they are on sound financial ground. I was just pointing out they were making more money. If the cap continues to rise, then some teams are not going to keep up. That's the problem with the last CBA. That's what owners are trying to address.

Saying one source of revenue increase is a long, long way from claiming profit margins are growing.
I don't know the numbers but someone said before TV is 1/3 of the revenue. If you pay 60% of the revenue to the players, increasing 1/3 of it by 50% means the portion you keep after paying the players is a 10% increase in overall revenues. Hardly earth shattering enough to say their profit margins are growing.

 

[Ring 6]

Are we getting things confused here? We're talking since the last CBA, right? At the time of the last CBA, oil was at $140 a barrel.

Yes I know oil is up from last year. We're talking about the BOOKS though since 2006. Heck, since before 2009 since that's when the owners opted out.

Gasoline is high, but I haven't paid $4.50 a gallon yet, as I was doing in 2006.

According the the first numbers I googled, your facts are wrong

Gas Price Historical Price Charts - GasBuddy.com

 

[Ring 6]

As for revenues, the league increased its TV package by 50%. For the same amount of games. The whole league, including players, was making more money with this deal than they were making in 2006.

.

Are you sure about this?

According to this
'97 through '09 Statement of Income

The Packers TV and Radio revenue increased by only about 8mill from 2006 to 2010 which is less than 10%, and in the years you are talking there was virtually no change.

Also, their 'player costs' grew ropm 102mill to 160 mill from 2006 to 2010.

Since they are publicly held, we have to assume these are real numbers or someone is going to jail.

This paints a very different picture than what many posters are claiming.

 

[Ring 6]

Packers Financials
'97 through '09 Statement of Income
From 2006 to 2010 revenues grew by about 50mill and expenses increased by about 60 mill.

The Packers made a profit of 25mill in 05, 18mill in 06 then 4mill in 09(the last capped year) and 5mill in 10.

Additionally players costs were 98mill and 102mill in 05 and 06 and grew to 138 mill and 160 mill in 09 and 10.

So from 2005 to 2010 the players got a 'raise' of 62mill, or 63%, and the owners saw their profit decrease by 20mill, or an 80% decrease.

I can see why the Packers wanted to opt out and won't agree to a deal that doesnt decrease the % of revenue going to the players.

It really is very interesting.

For the Packers, 258mill came in the door. Out of every dollar they earned in revenue about:

63 cents was paid to players
37 cents was retained by the team of which
33 cents went to other expenses
4 cents was left for profit
2 cents of that went to 'other expenses' and taxes
2 cents was left for net profit

Does anyone who thinks the owners are greedy scumbags have anything to say about the 2010 Packers?
The players walked away with 63 cents of every dollar and the owners with 4, 2 after taxes.

 

[lurker1965]

Yes, the owners are being the stubborn ones. They could have gotten an extension just by agreeing to audited reviews of their finances.

Would you want your tax returns made public?

Yes, I know they would be secret to those in the room, but leaks happen. Don't believe me, as the MLB owners.

It is the same privacy issue players bring up about drug testing. I don't think either is right, but I don't see the union giving up on that issue.

 

[upstater1]

Saying one source of revenue increase is a long, long way from claiming profit margins are growing.
I don't know the numbers but someone said before TV is 1/3 of the revenue. If you pay 60% of the revenue to the players, increasing 1/3 of it by 50% means the portion you keep after paying the players is a 10% increase in overall revenues. Hardly earth shattering enough to say their profit margins are growing.

Well, I think you need to do the math again. It's 16.7%. But we're talking about increased revenue with no additional investment. That's just straight money. By the way, I'm giving you the network numbers. The DirectTV deal increased by 300% to $700 million a year. Add NFL Network, and I'm sure the owners doubled their TV money. Although with the NFL Network I'm sure also that there are a lot of expenses involved.

 

[upstater1]

According the the first numbers I googled, your facts are wrong

Gas Price Historical Price Charts - GasBuddy.com

You linked to avg. gas prices. I was referencing oil per barrel. We're still 40 cents below the historic highs of 1.40 in late 2007. Apparently that indicates the price of oil precedes the rise in the price of gas by several months since the gas high was in early 2008. We're still not anywhere near the average of 2007 and 2008 however. if you take 2009 and 2010, it was well below the previous years.

 

[upstater1]

Are you sure about this?

According to this
'97 through '09 Statement of Income

The Packers TV and Radio revenue increased by only about 8mill from 2006 to 2010 which is less than 10%, and in the years you are talking there was virtually no change.

Also, their 'player costs' grew ropm 102mill to 160 mill from 2006 to 2010.

Since they are publicly held, we have to assume these are real numbers or someone is going to jail.

This paints a very different picture than what many posters are claiming.

I'm talking about the NFL as a whole.

The TV money is divided evenly.

Are you looking at local TV packages? Pre-Season?

The money went from $2 billion from networks a year to $3 billion.
DirectTV skyrocketed to $700 million.

This doesn't count the 8 games shown on NFL Network (not shown prior to 2007) or the Sunday Package money from Canada and elsewhere, nor the network money from Canada.

 

[upstater1]

I'm going to end my part in this conversation simply because I said several times that the sides are relatively close, and the fact that they are close makes me ambivalent about choosing sides. The owners are now a lot more reasonable (assuming their offer of 300m was real even though it came in the final hour) and the players chipped in too with 100m. They are only 200m apart. There is no excuse now not to get it done. Will the owners take 225m if the players offered it? That's my only concern. They should split it down the middle.

 

[PatsWickedPissah]

Are we getting things confused here? We're talking since the last CBA, right? At the time of the last CBA, oil was at $140 a barrel.

Yes I know oil is up from last year. We're talking about the BOOKS though since 2006. Heck, since before 2009 since that's when the owners opted out.

Gasoline is high, but I haven't paid $4.50 a gallon yet, as I was doing in 2006.

I listed several specifics which have increased. You cited oil which I don;t believe is a major expense for the NEP.

 

[Ring 6]

I'm talking about the NFL as a whole.

The TV money is divided evenly.

Are you looking at local TV packages? Pre-Season?

The money went from $2 billion from networks a year to $3 billion.
DirectTV skyrocketed to $700 million.

This doesn't count the 8 games shown on NFL Network (not shown prior to 2007) or the Sunday Package money from Canada and elsewhere, nor the network money from Canada.

Thats what I mean, if revenues are divided equally the Packers should illustrate your claim.
But they do not.
I am using tevenue directly from their financials.
Reviewing them is very interesting because they conflict with the popular perception that is being posted here.
And it would encompass those things because I looked at 05,06,07,08 and there was no appreciable change.

 

[Ring 6]

I'm going to end my part in this conversation simply because I said several times that the sides are relatively close, and the fact that they are close makes me ambivalent about choosing sides. The owners are now a lot more reasonable (assuming their offer of 300m was real even though it came in the final hour) and the players chipped in too with 100m. They are only 200m apart. There is no excuse now not to get it done. Will the owners take 225m if the players offered it? That's my only concern. They should split it down the middle.

None of that can happen though.
The players are no longer represented by the union. There is no one to have a CBA with.

 

[Ring 6]

Well, I think you need to do the math again. It's 16.7%. But we're talking about increased revenue with no additional investment. That's just straight money. By the way, I'm giving you the network numbers. The DirectTV deal increased by 300% to $700 million a year. Add NFL Network, and I'm sure the owners doubled their TV money. Although with the NFL Network I'm sure also that there are a lot of expenses involved.

I did the math in my head.

If TV is 1/3 of revenue and TV increase 50% and the players get 60% of revenue:

Before
Rev 100
TV 33
Players get 60
Owners get 40

AFTER...TV increase by 16.5
Rev 116.5
TV 46.5
Players get 69.9
Owners get 46.6

Owner kept revenue increase from 40 to 46.6 which is 16.5%.

So the share owners retain increased by 16.5% but player costs jumped by much, much more.

Again the point of this part of the discussion was it is wrong to conclude that 50% increase in TV money would increase profit margins, and in fact it seems that it lagged well behind the increase in player cost.