yungmack Posted January 14, 2011 Share Posted January 14, 2011 This is the clearest article I've read on the CBA. Plus it has some excellent info on the $$$ floating around the league. http://blogs.forbes.com/sportsmoney/2011/01/10/numbers-show-nfls-economic-realities-for-lockout-unwarranted/?partner=dailycrux Link to comment Share on other sites More sharing options...
CosmicBills Posted January 14, 2011 Share Posted January 14, 2011 This is the clearest article I've read on the CBA. Plus it has some excellent info on the $$$ floating around the league. http://blogs.forbes.com/sportsmoney/2011/01/10/numbers-show-nfls-economic-realities-for-lockout-unwarranted/?partner=dailycrux Good find! Thanks!!! Link to comment Share on other sites More sharing options...
Fezmid Posted January 15, 2011 Share Posted January 15, 2011 Good find! Thanks!!! Nice article, but I seem to have made a different conclusion than the author... They state: "The club (Packers) pulled in $9.8 million in profits for the fiscal year that ended March 31" According to Kurt Badenhausen of Forbes SportsMoney, “The NFL has never been more profitable by our count with the average team earning $33 million in 2009 in operating profit (earnings before interest, taxes, depreciation and amortization) thanks to huge incomes for teams like the Cowboys, Patriots and Redskins.” We all know that the "average team earning $33M" is worthless, and anybody who has taken a high school stats class can see why. So let's focus on the Packers like they said. They made nearly $10M, but that's BEFORE taxes. Now let's look at player salaries. I pulled up Ryan Fitzpatrick's numbers, and he earned $3M in 2009: http://content.usatoday.com/sports/football/nfl/salaries/playerdetail.aspx?lname=fitzpatrick&player=3742 Peyton Manning earned $14M in 2009: http://content.usatoday.com/sports/football/nfl/salaries/playerdetail.aspx?lname=manning&player=1448 So should a team, which is assuming all of the business risk, make only a few million more than an average quarterback in the league? Should the business earn $4M less than the starting QB? I just don't think less than $10M in profits in a year is really that high when you look at how much the team has to spend in order to earn that $10M. Maybe it's just me? Link to comment Share on other sites More sharing options...
Dan Posted January 15, 2011 Share Posted January 15, 2011 Interesting read. The article certainly paints the owners in a bad light. I agree with Fez. The $33million profit is undoubtedly skewed by a few clubs. So, if you assume the Packers are closer to the actual average, that's not a lot of money and I could easily see an owner wanting more money. A billion dollar business only making 10million profit almost seems impossible. Is that 1%? (I hate math). So, If you had a $1million dollar business, but at the end of the year you only made $10 grand; would it be worth it to run that business? Who knows where this goes... Link to comment Share on other sites More sharing options...
flmike Posted January 15, 2011 Share Posted January 15, 2011 Remember that most sports teams are just sidelines for owners. Only a few depend on them for primary income. The low figures sound about right considering that everyone has to keep up with Jones and Snyder's reckless spending habits. Link to comment Share on other sites More sharing options...
todd Posted January 15, 2011 Share Posted January 15, 2011 I'm sorry, but that sounds suspiciously like a PR piece for the NFLPA. Whaaaa! The owners want testing for HGH! Whaaa, the owners want a rookie cap like every other league! Whaaa whaaa! I call BS. Not that I'm on the league's side, but that is not journalism. It doesn't look at both sides of the situation. This is the clearest article I've read on the CBA. Plus it has some excellent info on the $$$ floating around the league. http://blogs.forbes.com/sportsmoney/2011/01/10/numbers-show-nfls-economic-realities-for-lockout-unwarranted/?partner=dailycrux Link to comment Share on other sites More sharing options...
Ramius Posted January 15, 2011 Share Posted January 15, 2011 Remember that most sports teams are just sidelines for owners. Only a few depend on them for primary income. The low figures sound about right considering that everyone has to keep up with Jones and Snyder's reckless spending habits. Exactly. The owners aren't in the business to make some profit each year. They own a team for the long term gain. They buy it at 500 mil and expect to sell it for almost double it's value down the road. They'll gladly operate at a minimal profit for that long term payoff. Link to comment Share on other sites More sharing options...
In-A-Gadda-Levitre Posted January 15, 2011 Share Posted January 15, 2011 plus the author totally discounts the rookie contract issue as if it's just a percentage of total revenue and nothing more good information in the article, but very partisan on the players side Link to comment Share on other sites More sharing options...
todd Posted January 15, 2011 Share Posted January 15, 2011 Maybe it's just me? No, that isn't an article, it is an editorial probably paid for by the NFLPA. Link to comment Share on other sites More sharing options...
Dan Posted January 15, 2011 Share Posted January 15, 2011 (edited) Remember that most sports teams are just sidelines for owners. Only a few depend on them for primary income. The low figures sound about right considering that everyone has to keep up with Jones and Snyder's reckless spending habits. Exactly. The owners aren't in the business to make some profit each year. They own a team for the long term gain. They buy it at 500 mil and expect to sell it for almost double it's value down the road. They'll gladly operate at a minimal profit for that long term payoff. Good points. Although I'd imagine it's more complex for at least a number of the owners. Edited January 15, 2011 by Dan Link to comment Share on other sites More sharing options...
yungmack Posted January 15, 2011 Author Share Posted January 15, 2011 For those who think this is a puff piece for the NFLPA, please note this is from FORBES, about the most pro-ownership, anti-labor magazine going. As to the GB profits, note that this is a one off, that earnings were much higher in previous years (about three times as much) and most likely will be again. The value of the franchise is different from the annual gross and net income so you can't compare one year's profit against the total value of the franchise. Well, you can. But it's loonie to do so. Link to comment Share on other sites More sharing options...
major Posted January 15, 2011 Share Posted January 15, 2011 The owners are committing professional suicide. It's funny in a way. Link to comment Share on other sites More sharing options...
spartacus Posted January 15, 2011 Share Posted January 15, 2011 They state: "The club (Packers) pulled in $9.8 million in profits for the fiscal year that ended March 31" We all know that the "average team earning $33M" is worthless, and anybody who has taken a high school stats class can see why. So let's focus on the Packers like they said. They made nearly $10M, but that's BEFORE taxes. "They made nearly $10M, but that's BEFORE taxes." It's also before interest, depreciation and amortization, numbers which are far larger for teams that own their stadiums and carry large loans used to purchase the team itself. Items that teams like the Cowbous, Patriots and Redskins need to be concerned with. It also does not include the non P&L item of cash needed to repay the principal on the company debt. Those operating profits sure can disappear real quick. Link to comment Share on other sites More sharing options...
....lybob Posted January 15, 2011 Share Posted January 15, 2011 If the NFL has a lockout would the players be free to sign with an upstart league. Link to comment Share on other sites More sharing options...
Vinny4sum Posted January 15, 2011 Share Posted January 15, 2011 Interesting read. The article certainly paints the owners in a bad light. I agree with Fez. The $33million profit is undoubtedly skewed by a few clubs. So, if you assume the Packers are closer to the actual average, that's not a lot of money and I could easily see an owner wanting more money. A billion dollar business only making 10million profit almost seems impossible. Is that 1%? (I hate math). So, If you had a $1million dollar business, but at the end of the year you only made $10 grand; would it be worth it to run that business? Who knows where this goes... I agree, without understanding the Packers actual profit and loss you have no idea what the 9 million represents. I also disagree with the writers comment about, how would you feel if you worked for a profitable company and took a pay cut. I do work for a profitable company, but much like Green Bay our profits decreased in 2010 and as part of the top 10% in salary I took a 8% direct pay cut and 2 furlough weeks per year. He mentions the Packers went from 20 miilion to 9 million and he glosses over that. Any company that saw profit cut in half would go crazy. Link to comment Share on other sites More sharing options...
Hapless Bills Fan Posted January 15, 2011 Share Posted January 15, 2011 I agree, without understanding the Packers actual profit and loss you have no idea what the 9 million represents. I also disagree with the writers comment about, how would you feel if you worked for a profitable company and took a pay cut. I do work for a profitable company, but much like Green Bay our profits decreased in 2010 and as part of the top 10% in salary I took a 8% direct pay cut and 2 furlough weeks per year. He mentions the Packers went from 20 miilion to 9 million and he glosses over that. Any company that saw profit cut in half would go crazy. I suspect there is more to it than that. Keep in mind that the Green Bay Packers ownership is unique: "The Packers are the only non-profit, community-owned major league professional sports team in the United States" They are owned by shareholders, and if sold, the money goes to the Green Bay Packers Foundation, a charity. We'd need to look at last year's balance sheet and this years, to understand the drop in profit, but as a non-profit organization, it's not clear to me what happens to their "profit" anyway. I doubt fan attendance dropped, even in the bad economy. Green Bay is one of the few places with more fervent fans than the Bills (hence the traditional Lambeau Leap) and the team is winning. And the fans like beer. I'd be surprised if their revenues dropped that much. My guess is: 1) the drop in profits reflects something else - donation to a charity, infrastructure investment, or increased expenses 2) Green Bay is not at all reflective of the NFL as a whole because their ownership is such a different beast Link to comment Share on other sites More sharing options...
finknottle Posted January 15, 2011 Share Posted January 15, 2011 Exactly. The owners aren't in the business to make some profit each year. They own a team for the long term gain. They buy it at 500 mil and expect to sell it for almost double it's value down the road. They'll gladly operate at a minimal profit for that long term payoff. Really? Why exactly do they want to renegotiate the deal, if they are not interested in making a yearly profit? If there were any doubt that this was a pro-union piece, it is dispelled by this straight-faced answer: Are the players willing to bend on any issues? Yes. The NFLPA proposed changes to the rookie wage scale that has been in the works for over a year. The union for the players offered up what they call a “Proven Performance Plan”. The proposal would reduce rookie contract lengths to a max of 3 years. According to the NFLPA, that would reduce spending on rookie salary by approx. $200 million. The proposal would then take those savings and divert $150 million to players who signed relatively low contracts either as rookies or veterans, but whose performance has been much greater. The rest of the balance (approx. $50 million) would be devoted to a fund for new retired player benefits. The proposal is also seeking the league to match those funds creating a $100 million pool for retired player benefits. So the NFLPA's solution to spiraling rookie contracts is to reduce the length of time you can sign a rookie for, AND take the money you would have paid them in the fourth and fifth years and add it to money going to other players and the retirement fund. Oh yes, and kick in some extra matching money for the retirement fund too. Swell. Link to comment Share on other sites More sharing options...
dave mcbride Posted January 15, 2011 Share Posted January 15, 2011 Forbes writing a pro-union puff piece? I don't think so. It seems pretty clear to me that it's a power grab by the people who run the most profitable sports league in America. Asking for pay cuts despite overall mammoth profitability (which will increase when the new ESPN contract gets worked out) is rich. Link to comment Share on other sites More sharing options...
SoulMan Posted January 15, 2011 Share Posted January 15, 2011 Exactly. The owners aren't in the business to make some profit each year. They own a team for the long term gain. They buy it at 500 mil and expect to sell it for almost double it's value down the road. They'll gladly operate at a minimal profit for that long term payoff. This is flat wrong. Every owner without exception want both. Link to comment Share on other sites More sharing options...
JohnC Posted January 15, 2011 Share Posted January 15, 2011 (edited) This is the clearest article I've read on the CBA. Plus it has some excellent info on the $$$ floating around the league. http://blogs.forbes.com/sportsmoney/2011/01/10/numbers-show-nfls-economic-realities-for-lockout-unwarranted/?partner=dailycrux "The players have been asked to take a cut. As you look back over the numbers above, ask yourself if your company was thriving in this economy, and then asked you to take an 18 percent pay cut, how would you react? What the NFLPA is asking seems reasonable in light of what the owners are asking: show us your books and prove it." The owners are claiming that the economic environment has changed but are resolutely unwilling to open their books to prove their bogus claim. What does that tell you abut the legitmacy of their claim? There certainly needs to be changes to the rookie salary structure. That really isn't a source of discord. Both the players and the owners are in accord on that issue. The real conflict is between the big market teams that have substantially payed for their stadiums and then generate more money from their enhanced revenue producing stadiums and the smaller market teams that share in the now increased revenue pot. Going to a 18 game schedule is not only foolish, it is reckless. The rate of injuries is already very high under a 16 game schedule. Adding two more games at the point where the players are already battered is going to not only deplete the workforce further but it will also damage the quality of the product. In addition, the ticket prices are now high. Why would the customers want to spend more money for an extended season when they have an alternative of staying home and watching the game on their big screens while stretched out on their comfortable sofas? One way of adding revenue without adding regular season games is to add more games to the playoff format. That would be a reasonable alternative to the 18 game schedule. Edited January 15, 2011 by JohnC Link to comment Share on other sites More sharing options...
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