The New Lords of the Realm

Hi Everybody!

Good piece by Helyar, as always.

So, in a sense, the rush to new cities and the stadium/city fiance deals which lured some owners (and new owners) mortgate the future and structure debt based on the non-sharing part of the revenue pie is catchting up to the NFL.

This prompts Oiler Troll, naturally, to burp up instinctively, “Damn you, Bud Adams!”.

The NFL should have seen this one coming, but then again, Art Modell and Bud were both on the expansion committee and once they saw what kinds of stadium deals cities were will to donate, they ran, so who was going to warn them. Plus, Al Davis had won his day in court.

Sorry, excuse me. Back to the Cowboys, you have to figure that Jerry Jones was literally banking on the old structure of some revenues are shared, some aren’t, in order to finance his responsibilities of the new stadium.

Question: From day one in 1960, the AFL operated under revenue sharing with their first TV contract. When did the NFL first figure out that was the way to go?

Damn you Bud Adams. Sorry – there it goes again.

This is a pickle.

Rafael:

Great article, I’ve liked Helyar a lot ever since I read ‘Barbarians at the Gate’ back in college. I used that book as motivation then, because it is about one of my heroes when I was studying business back then (Henry Kravis, the man who was Oliver Stone’s inspiration for the character ‘Gordon Gecko’ in the movie ‘Wall Street’). Helyar is one fo the best and most objective writers around when it comes to distilling complicated topics into a digestable read.

I don’t think Upshaw is the only one at fault in this, I just happen to think he has thrown his credibility and his union’s future in with the wrong side, and he’s done it for purely greedy purposes. Instead of encouraging guys like the Bengals owner to sell naming rights to the stadium rather than naming it after the guy’s father, he’s in effect asking Jerry Jones and Dan Snyder to subsidize the Bengals owner’s family tribute. Upshaw is encouraging more of that type of behavior by asking for teams like the Cowboys to subsidize these franchises that don’t care about maximizing revenue, whether it is because of incompetence or nostalgia. Upshaw should realize that his goals would be realized much more easily by cooperating with the New Breed instead of asking for them to be penalized financially for their success. Is it not bad enough the TV revenue is split equally when the Cowboys had 4 of the top 10 rated games on television last year? The divisions amongst the owners are going to be there as they always have. I can recall the Cowboys having to face a far tougher uphill battle in the early days of the franchise than any of the current ‘small market teams’ do. It’s funny that a league that is built on hard nosed competition wants to eliminate as much of it as possible in the way its franchises run their business.

While we’re on the topic of good books, I might recommend another one that seems highly appropriate at this time: ‘Harrison Bergeron’. What is being asked of owners like Jerry Jones reminds me very much of what the hero in that book had to endure.

What do you expect from closet socialists like Upshaw? Redistrubution of wealth, not creating it, is their mantra.

The problem is that the league is too sucessful. The ONLY thing that motivates parties in negotiations like this is FEAR…and no one is feeling it right now, all three sides—high rev, low rev, players—dont feel threatened yet.

This year will not see an agreement—remember we are talking about billions of dollars and the fate of family fortunes—nothing will get down until some group of the owners really fear for the future of their own fortunes.

People who are blaming the Upshaw and the union haven’t really been following this. They are actually playing their hand with some skill. The league’s trying to foist a weak deal on the players so they don’t have to deal with their own internal issues. Although, I would concede that their margin of error is pretty low here, because the players are going to be very short sighted about all this—i.e., an uncapped league will greatly benefit them, but the transition period is really rough.

There is a recent article by Tom Curran of the Providence Journal which addresses the issue of some teams not working to maximize profits. He points out that the Patriots rose from the least profitable franchise in the NFL to one of the most profitable ones.

He also listed the profits of every NFL team for 2004, from a Forbes source. Notice that Green Bay is at #13, while the Giants are at #20, the Jets are at #23, and the Cardinals are at #32. [Phoenix is NOT a small market.] Obviously, market size is not the only factor in a team’s profitability. A team’s success certainly helps, but even there, there is no direct correlation. What is obvious is that hard work and ingenuity can affect both the team’s product on the field and its bottom line.

http://www.projo.com/patriots/content/projo_20060305_05beat.3348472.html

Team revenues

Here is how NFL teams ranked in revenue in 2004, the most recent year for which numbers are available. Figures are in millions:

1. Washington Redskins 287
2. New England Patriots 236
3. Dallas Cowboys 231
4. Philadelphia Eagles 216
5. Houston Texans 215
6. Cleveland Browns 203
7. Denver Broncos 202
8. Carolina Panthers 195
9. Tampa Bay Buccaneers 195
10. Chicago Bears 193
11. Baltimore Ravens 192
12. Miami Dolphins 190
13. Green Bay Packers 189
14. Tennessee Titans 186
15. Detroit Lions 186
16. Seattle Seahawks 183
17. Pittsburgh Steelers 182
18. Kansas City Chiefs 181
19. St. Louis Rams 176
20. New York Giants 175
21. New Orleans Saints 175
22. Buffalo Bills 173
23. New York Jets 172
24. Cincinnati Bengals 171
25. San Francisco 49ers 171
26. Jacksonville Jaguars 169
27. Oakland Raiders 169
28. Atlanta Falcons 168
29. Indianapolis Colts 166
30. San Diego Chargers 165
31. Minnesota Vikings 164
32. Arizona Cardinals 153

— SOURCE: Forbes Magazine

burmafrd,

So the players create no wealth for the game? I’d like to see Jerry Jones and Dan Snyder make a penny selling themselves as attractions.

They’re marketing wizzes, but they’re worth zero without the game on the field. And they can’t play it.

And I forgot to add, who develops the players for them?

For all the talk of “hard work” by the owners, NFL guys have it much easier than baseball or hockey. Those people pay to create farm systems, scout the world, sign 16 year old foreigners and 18 year old American high schoolers and develop them.

All the NFL owners have that done for free by the American colleges. That’s a huge expense they receive gratis.

they have the most profitable Pro Sports league. And that has increased over the last 10 years. And most of the excess profit has come from new sources. The players had nothing to do with those. The owners that work the hardest DESERVE to keep more of that money. The PLAYERS are making PLENTY. NOW if they were to use that extra money for the seniors and pensioners and to help out with health insurance for the old players- that is a different story. BUT I do not see Upshaw or the union wanting to do that.