generaLee83 Posted December 31, 2006 Share Posted December 31, 2006 If there is unspent cap money does it go into the organizations pocket? (i.e. profits, re-investment blah blah blah) I'm just curious, if so I can see the Bills being 25 million under the cap with Ralph at the helm. Link to comment Share on other sites More sharing options...
mead107 Posted December 31, 2006 Share Posted December 31, 2006 he would have to play to get money Link to comment Share on other sites More sharing options...
/dev/null Posted December 31, 2006 Share Posted December 31, 2006 If there is unspent cap money does it go into the organizations pocket? (i.e. profits, re-investment blah blah blah) I'm just curious, if so I can see the Bills being 25 million under the cap with Ralph at the helm. Cap money has nothing to do with profit. Its just the annual spending limit enforced on all 32 teams Link to comment Share on other sites More sharing options...
Buffaloed in Pa Posted December 31, 2006 Share Posted December 31, 2006 25 mill try more like 35.Ralph is done spending so were DOOMED Link to comment Share on other sites More sharing options...
generaLee83 Posted December 31, 2006 Author Share Posted December 31, 2006 Cap money has nothing to do with profit. Its just the annual spending limit enforced on all 32 teams Dev I understand that aspect of it. My question is: Salary cap 100 million Bills salary 80 million _______________________ free cap space 20 million If the Bills in fact have 20 million real dollars left over where does that money go? I'm sure it gets complicated with the CBA and revenue sharing as all of that 20 million may not have been generated by the BB. Link to comment Share on other sites More sharing options...
ofiba Posted December 31, 2006 Share Posted December 31, 2006 Dev I understand that aspect of it. My question is: Salary cap 100 million Bills salary 80 million _______________________ free cap space 20 million If the Bills in fact have 20 million real dollars left over where does that money go? I'm sure it gets complicated with the CBA and revenue sharing as all of that 20 million may not have been generated by the BB. The Bills aren't given the money for the salary cap by the league. That's just how much of their own money they are allowed to spend on players. Yeah Ralph (or more specifically, the Buffalo Bills) gets to keep any money that isn't spent on player salaries, but he isn't pocketing any extra money that he never had. Link to comment Share on other sites More sharing options...
generaLee83 Posted December 31, 2006 Author Share Posted December 31, 2006 The Bills aren't given the money for the salary cap by the league. That's just how much of their own money they are allowed to spend on players. Yeah Ralph (or more specifically, the Buffalo Bills) gets to keep any money that isn't spent on player salaries, but he isn't pocketing any extra money that he never had. I thought with revenue sharing all teams took in money from a general fund, so this money isn't to be used on salaries? Link to comment Share on other sites More sharing options...
ofiba Posted December 31, 2006 Share Posted December 31, 2006 I thought with revenue sharing all teams took in money from a general fund, so this money isn't to be used on salaries? Yes revunue sharing is all taken from a general fund, but that is completely independent of the salary cap. Teams get a certain percentage of the shared revenue, and they can do whatever they want with it. The team allows them to spend so much of it on player salaries. It's not as if they lose out on 20 million dollars of money since they decided to stay 20 mil under the cap. They simply have 20 million dollars to spend on hot dogs or whatever else they want. Link to comment Share on other sites More sharing options...
generaLee83 Posted December 31, 2006 Author Share Posted December 31, 2006 Yes revunue sharing is all taken from a general fund, but that is completely independent of the salary cap. Teams get a certain percentage of the shared revenue, and they can do whatever they want with it. The team allows them to spend so much of it on player salaries. It's not as if they lose out on 20 million dollars of money since they decided to stay 20 mil under the cap. They simply have 20 million dollars to spend on hot dogs or whatever else they want. Thanks ofiba, on a side note I wonder what $20 million worth of hot dogs looks like. Link to comment Share on other sites More sharing options...
BillnutinHouston Posted December 31, 2006 Share Posted December 31, 2006 Cap money has nothing to do with profit. Its just the annual spending limit enforced on all 32 teams Not sure how you are looking at this, but I disagree with your statement. Cap money has a lot todo with profit - like any business, reduced payroll (assuming revenues stay the same) = more profit. Link to comment Share on other sites More sharing options...
clumping platelets Posted December 31, 2006 Share Posted December 31, 2006 Left over cap space is applied to any "not-likely-to-be-earned" incentives earned by players on the roster Link to comment Share on other sites More sharing options...
Casey D Posted December 31, 2006 Share Posted December 31, 2006 Dev I understand that aspect of it. My question is: Salary cap 100 million Bills salary 80 million _______________________ free cap space 20 million If the Bills in fact have 20 million real dollars left over where does that money go? I'm sure it gets complicated with the CBA and revenue sharing as all of that 20 million may not have been generated by the BB. Let's go through at a basic level the economics of an NFL franchise, and then you can answer your own question. We'll use two teams as examples, with numbers that are not actual, but a good guesstimate. There are two basic sources of revenue for all NFL teams--shared and unshared. Shared revenue includes 1/32 of the TV money, and formulaic sharing of ticket sales. Unshared income includes private suites, charging for training camp, private seat licenses(PSLs), merchandise, and stadium deals. Each team also has costs. Salaries are the biggest. Right now the cap is around 64% of TOTAL League revenue under the new CB(which has not yet been ratified by the owners, by the way). Under the last CBA, the cap was linked to total shared revenues only, and this change adversely effects the Bills, let me illustrate in a moment. Teams have other costs as well, such as debt service on the purchase of the team and stadiums. These costs do not adversely effect the Bills--as Ralph owns the team free and clear and did not build the stadium--but it does effect teams like NE, Philly, etc who have new stadiums. Let's use Buffalo and Washington as examples. Let's say the Bills get $110 M in shared revenue. Let's say they make $35M in unshared revenue. That's $145 M they can spend on EVERYTHING and stay in the black. Say Washington also gets the same $110 M in shared, but earns $125 M in unshared. It has $225 M to spend and stay in the black. Let's also assume that the average team has total revenues of $175 M, so the salary cap is set at 64% of $175 m, or roughly $111 M. In this example, the amount that the Bills can spend under the cap is actually 76% of its total revenues, while Washington only has to spend 49%. In $$$ terms, after spending to the cap, the Bills are left with just $34 M to pay for everything else--all overhead, coaches, debt service(none right now), out of pocket bonus money,etc. Washington has $114 M. If the Bills do not "spend to the cap" as you suggest, it does not create more revenue, it simply let's them keep money for other things. For example if they only spent $100 M on salaries, they would have $45 M left for other things--still far less than Washington. What Ralph wants is more of the unshared revenue to be shared, to fix this imbalance. While this might seem like asking for a handout--and it is a bit-- actually it is fair because now that the cap is a % of all revenues(as opposed to only shared revenues under the old CBA), the unshared revenues from teams like Wash, Philly and NY(especially when they have a new stadium) drives up the cap, and creates revenues for the big teams to pay the increase, but adds nothing to Buffalo's revenue stream. In other word, the big teams drive up the Bills costs with their unshared revenue schemes, but provide no new income to Buffalo to pay for it. Now the big teams argue that they have a lot more costs--mostly debt service for their stadiums and/or paying the debt on purchasing the franchise)-to make the extra revenue, and its not fair for them to give money to Buffalo who, while having low revenue, have lower costs. But that's why Ralph gets all worked up about a new NY stadium, it just is going to make worse the problem the Bills and other small teams already have. Now the Bills will be OK until Ralph dies, but then we will be screwed unless new revenue sharing has been put into place. The reason is the new Bills owners will have to pay say $700 M for the team. They will have to borrow money to finance some of this-- let's say half or $350 M. If they have to pay 10 % interest on this annually--that's $35 M more each year in costs for the new owner that Ralph does not have. That makes the Bills a non-viable operation in Buffalo, without revenue sharing. So that's what all this is about. I believe that ultimately there will be more revenue sharing that will keep our Bills safe. But until we get it, Ralphie will B word. And it's not because he is whiny, it's because of the economics I just laid out. Sorry this is long, but it's a little complicated... Happy New Year... CD Link to comment Share on other sites More sharing options...
MadBuffaloDisease Posted December 31, 2006 Share Posted December 31, 2006 Dead-on Casey. Also another important piece to the "Ralph isn't whining" puzzle is that every team that has built a new stadium, starting with the Pats, has received $150M in essentially free money from the NFL (that includes Ralph) to build their new stadia, yet they're not expecting to share "local" revenue. Link to comment Share on other sites More sharing options...
/dev/null Posted December 31, 2006 Share Posted December 31, 2006 Let's go through at a basic level the economics of an NFL franchise, and then you can answer your own question. We'll use two teams as examples, with numbers that are not actual, but a good guesstimate. ... Sorry this is long, but it's a little complicated... Happy New Year... CD Yeah what he said Long story short: Unused cap space does not result in additional revenue. However the money that would have been spent on player salaries can be used elsewhere or pocketed by the old man Link to comment Share on other sites More sharing options...
Casey D Posted December 31, 2006 Share Posted December 31, 2006 Dead-on Casey. Also another important piece to the "Ralph isn't whining" puzzle is that every team that has built a new stadium, starting with the Pats, has received $150M in essentially free money from the NFL (that includes Ralph) to build their new stadia, yet they're not expecting to share "local" revenue. I don't give much credence to the arguments of the big market teams. They basically want a baseball model, where they can buy a title. It's the only way a guy like Danny Snyder can do it, given his horrendous track record even on the mildly biased--in his favor--system now in place. When the Steelers become like the Pirates, you'll know the NFL has killed the golden goose.. Hopefully the owners will heed the motto "pigs get fat, hogs get slaughtered."...CD Link to comment Share on other sites More sharing options...
JimBob2232 Posted December 31, 2006 Share Posted December 31, 2006 Think of it as raising the minimum wage of NFL players. As the minimum wage increases, it hurts the smaller market teams. perhaps this should be in PPP Link to comment Share on other sites More sharing options...
NavyBillsFan Posted December 31, 2006 Share Posted December 31, 2006 You cant build Hotels until you have 4 houses guys.... Happy New Year! Link to comment Share on other sites More sharing options...
/dev/null Posted December 31, 2006 Share Posted December 31, 2006 You cant build Hotels until you have 4 houses guys....Happy New Year! But it's better to have the hotel on Illinois than on Mediterranian Link to comment Share on other sites More sharing options...
Koufax Posted December 31, 2006 Share Posted December 31, 2006 Casey said it well. But if Ralph stays under the cap AND makes a profit (I'm not sure on total revenues and other operating expenses, so don't know if this is the case), he is being a jerk. I can understand him being unhappy about the agreements and rules and sharing and percentages and stadium financing, and all that stuff, and hope he fights to improve the Bills chances in all that stuff. But if the choice ends up not making the best team possible under the rules so that a profitable team can be more profitable then I think I would be disappointed in a wealthy man with disappointing priorities. He shouldn't have to operate the team at a "loss" (although I put this in parenthesis because it is an annual loss on paper, but an investment in the value of his franchise and contributes to his equity indirectly), but if he cuts corners to move from a profit of $x to a profit of $y so he can be a 90 year old jazillionaire instead of a gabillionaire the guy doesn't get it. Ralph, you can't take it with you, and I think you would end up happier with a few less bucks left to your heirs and the memory of a Bills championship. That moment of the commissioner presenting you the Vince Lombardi trophy will matter a whole lot more than a few bucks on the balance sheet (and that moment will increase your franchise value more than the few bucks on the balance sheet cost you). So Ralph, please fight for the little guy with the media, the government, and the league and owners, but when it comes time for football decisions, don't put more profits ahead of fielding the best Bills team we are allowed to. Link to comment Share on other sites More sharing options...
clumping platelets Posted January 1, 2007 Share Posted January 1, 2007 Dead-on Casey. Also another important piece to the "Ralph isn't whining" puzzle is that every team that has built a new stadium, starting with the Pats, has received $150M in essentially free money from the NFL (that includes Ralph) to build their new stadia, yet they're not expecting to share "local" revenue. G-3 money is not free money...it's a loan and is subtracted from future TV revenue payouts to the team Link to comment Share on other sites More sharing options...
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