How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

  1. You have chosen to ignore posts from prolate0spheroid. Show prolate0spheroid's posts

    How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    One thing that hasn't been discussed much on this site is how the NFL team owners' dispute about revenue sharing has led to their decision to end the CBA and try to cut player salaries.

    Currently, the salary cap is set based on league "total revenues." But the revenue sharing agreement means that only a portion of those total revenues are shared. Currently about 20% of total revenues aren't shared--and a disproportionate amount of that unshared revenue goes to a few wealthy teams. Furthermore, the amount of unshared revenue made by the few wealthy teams is increasing quickly, especially as those teams earn big luxury box income. 

    What does this mean?  In a nutshell, it means that all teams have the same salary costs and that salary costs grow proportionally to the growth in total (shared and unshared) league-wide revenue. But individual team revenue doesn't grow at an equal pace for each team. Instead, the big market teams (that can make big unshared luxury box revenues) have revenue growth that exceeds the growth in salaries while small market teams (that don't have big growth in unshared revenues) have revenue growth below the rate of salary growth.

    Now there are two ways to correct this problem. One is for the large market teams to share more of their currently unshared revenue with the small market teams.  This would allow salary growth and revenue growth for all teams to be more balanced.  But this, of course, would mean the owners of the richest teams (like Jerry Jones) would have to give some of their earnings to smaller market teams like the Packers.  And Jerry Jones has already gone on record saying that he doesn't want to share any more of his revenue with other owners.  (He also isn't sharing it with the taxpayers who funded more than a quarter of his luxury-box-filled stadium either, but that's another story.)

    The alternative to more revenue sharing, of course, is to limit the growth in player salaries to a rate the poorest teams can afford  Apparently, this is exactly what the owners' last-minute offer did. It took a lot of future revenue off the table in calculating the salary cap. This way salaries would grow at a much slower pace, matching the revenue growth for the poorest teams. Overall NFL earnings, however, could grow at a much faster pace than salary growth, with the rich teams' owners keeping most of that money in their own pockets. 

    The players, of course, recognized what was going on. The owners of rich teams don't want any more revenue sharing.  So the owners instead proposed a CBA that would essentially limit growth in player salaries for all teams (rich and poor) to what the poorest teams could afford.  This helps the poor teams of course, but it's a real windfall for a guy like Jerry Jones who would end up sharing none of his rapidly growing extra revenue with other owners, players, or taxpayers.

    Rather than sign a CBA that essentially set salaries at a level the poorest teams could afford, the players opted for a market solution.  No CBA, no salary cap. Let teams pay what they can afford--the rich teams will pay more and the poor teams less. If the owners aren't willing to share revenue equally to preserve competitive balance why should the players agree to restore competitive balance by limiting their pay only to what the poorest teams can afford?  The players are getting a lot of blame for threatening competitive balance in the league--but if owners of the wealthiest teams were willing to share more of their revenue with the less wealthy teams the whole problem could have been avoided from the beginning. 

     
  2. You have chosen to ignore posts from p-mike. Show p-mike's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    I guess in a league that is funded primarily by television revenue, a team without fans could probably survive. Perennially bad teams in secondary markets survive in Major League Baseball, where revenure is largely turnstyle-driven (but where they also play skatey-eight games), so it may be an apples-and-oranges comparison, but encouraging successful ownership to further subsidize poor ownership -- or ownership in indifferent markets -- seems a little like the snake feeding on its own tail to me.

    Where I live, ownership is looking for as much as half of its stadium development plan to be financed on the backs of the taxpayers in a state currently running a budget deficit approaching $6 billion. The Vikings have allowed their stadium situation to deteriorate the same way they let their quarterback situation deteriorate, and if I'm at the top of the revenue stream, I would be doing my partnership a disservice if I didn't question continuing to support that kind of behavior. Now, Minnesota isn't Jacksonville or Buffalo. The fans are here and it's a viable television market. What taxpayers (as opposed to fans) wonder aloud is why the Wilf consortium should keep getting what amount to welfare payments from both its customers (the fans) and its colleagues (flush owners like Jones), when they've got plenty of collateral to finance their own development . . .   the way, for instance, Mr. Kraft did in the Boston market.

    There's a reason most of these guys avoid risking their own investments whenever possible.

    It's the same reason a dog licks its balls . . .   but the times, they are a changin'.


     
  3. You have chosen to ignore posts from LazarusintheSanatorium. Show LazarusintheSanatorium's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    I slept in very late today...  What I mean to say his: Please Mike, don't make me google "Why DOES a dog lick his b#lls?"  (Ya already know where I was on that Leopard one...Is this more, or less complicated than that?). 
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    I slept in very late today...  What I mean to say his: Please Mike, don't make me google "Why DOES a dog lick his b#lls?"  (Ya already know where I was on that Leopard one...Is this more, or less complicated than that?). 
    Posted by LazarusintheSanatorium
    I would imagine he means because it can.
     
  5. You have chosen to ignore posts from tcal2-. Show tcal2-'s posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    I'm not going to share my money with my neighbor just because we live on the same street.
     
  6. You have chosen to ignore posts from prolate0spheroid. Show prolate0spheroid's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    . . . encouraging successful ownership to further subsidize poor ownership -- or ownership in indifferent markets -- seems a little like the snake feeding on its own tail to me.

    I tend to agree with this and think football might be better off with a few fewer teams.  The question the richer-market team owners need to ask is whether they benefit from a league with a broad fan base (in part created by having teams in smaller markets) and by competitive balance.  If Jerry Jones (and Bob Kraft) can make more money for themselves because there are teams--and reasonably competitive teams--in places like Jacksonville and Green Bay, then it's not so outrageous for them to subsidize those teams. Remember, the teams in small markets do contribute to larger overall TV revenue--in large part because their presence means more eyes in medium-sized markets tuning into the TV each Sunday--and that does translate into higher Nielson ratings and higher advertising revenue for the networks, which in turn means a bigger league TV contract. But if Jones and Kraft could make just as much (or more) without the smaller market teams--and keep a strong enough fan base to score the large TV contracts--then it does make sense for them to stop the subsidies. For the fans, a less diluted league could mean even better top teams and even better games--just not in so many cities.  

    The question, though, is if we don't expect the owners to subsidize the weak teams through greater revenue sharing, why should the players subsidize those weak teams by signing a CBA that ties their pay to what weak teams can afford?  If the owners are going to stop "socialism" in their ranks, what's wrong with the players ending the union type of socialism and selling their services on the market too?  Yeah, there will be fewer jobs for the players and the "weak" players will lose money or be unemployed.  But the really good players will make every bit as much if not more in a market system.  As they say, what's good for the goose is good for the gander. 

    As far as the taxpayers go, I guess I don't mind them subsidizing stadiums--but if they do so, they should demand a portion of the luxury box and other stadium-generated revenues for themselves. What drives me nuts about the taxpayers' funding of football stadiums is that they do so without getting any share at all of the revenues!  What other investor would be such a pushover! At least the players aren't that dumb . . . 



     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    I slept in very late today...  What I mean to say his: Please Mike, don't make me google "Why DOES a dog lick his b#lls?"  (Ya already know where I was on that Leopard one...Is this more, or less complicated than that?). 
    Posted by LazarusintheSanatorium


    Because he can.
     
  8. You have chosen to ignore posts from BBReigns. Show BBReigns's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : Because he can.
    Posted by p-mike


    "Why does he lick his balls?....Because he can."

    ......

    Stompie has been practicing this for many years, since 1979 when he graduated from Lawrence High School.  But, to no avail. He one day hopes to break into the Guiness Book of World Records to accomplish this lifetime goal of licking his own balls.

    He almost pulled it off a few years ago, but he was interrupted when he was spotted by the Girl Scout looking through his 1st floor apartment window in Lawrence.

    Here he is warming up for another try:


     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    First Prolate pick a different small market team as an example because since the Packers are publicly owner they are essentially meant to be a non-profit organization. Trust me the Packers aren't complaining they are getting a smaller piece of the pie.

    Second why should the team owners share more money with smaller based teams. I understand that in their market some market sharing is needed but why should a team like SD who has trouble putting people in the seats make nearly as much money as say the Cowboys? If they did you'd see a Pirates situation where the owner wouldn't care 1 ounce to make the team better. In the Pirates case they have been in the top 5 profitable teams in the MLB for a number of years because they get the revenue sharing and pocket it. Larger amounts of revenue sharing actually decrease competition because the owners have no reason to invest back into the team regardless if they are selling 50% of tickets or 100%.

    Third a owner like Kraft took a losing team that couldn't make a profit to save it's life and turned it into one of the most successful teams in the market. Doesn't he deserve to maximize his profit on that investment instead of losing a larger percentage of that created market share to a team that doesn't care?

    Listen everyone including the NFLPA fully admitted the players got a lop sided deal last time. Everyone knew the owners were going to opt out and try to balance it back out. Now the players are demanding at least the same contract or better back and telling the owners who invested back into their teams to take less money in order to make up the profit difference for the smaller teams?

    Last time I checked D&D's wasn't giving Starbucks extra money because they have less shops in Boston and I don't remember IBM cutting me a check because my company doesn't do as much business as them. Taking a larger percentageof profits from better teams to protect lower market teams profits ensuring an already high percentage devoted to employees during a time that has seen a gradual decrease in revenue in all sports (which could eventually affect the NFL) is just plain wrong. The best way is to work out a more balanced deal for both sides which helps make up the profit margin for those smaller teams without raiding the coffers of owners who have built up their own market share

    BTW you can also have named the thread "How the NFLPA refusal to renegotiate a lope sided deal is leading to the NFL's labor problems"  and both would be true
     
  10. You have chosen to ignore posts from UD6. Show UD6's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    First, I think its slanted to describe teams as richer markets and poorer markets.  Simply describe them as larger markets and smaller markets and you'd have the same thing. 

    Pete Rozell had the foresight to see the ability of the large markets to generate revenues well beyond that of the small markets and instituted revenue sharing for league in general and not for teams specifically.  It is exactly this kind of thinking that has allowed 14 small market teams to win superbowls since its inception and another 19 to compete in it.   

    If the NFL wants to become the MLB, then they can mess with the rev sharing calc, but this won't benefit the league, or (imo) the vast majority of the players.  Just recently, former NY mets GM, Steve Phillips, said that what the KC Royals were doing with a 35 mill payroll was a disgrace to the league. 

    If we are to begrudge small market teams for not being successful on the field, lets do the same to the large market teams with the same problems.  Their only ability to generate more revenue is due to the size of their market along with the loyalty of their fans and nothing else. 
     
  11. You have chosen to ignore posts from prolate0spheroid. Show prolate0spheroid's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    PatsEng . . .

    First, the Packers are in fact a perfect example for two reasons: one, we know their financial situation and two, we know that they complained about salaries growing faster than revenue.  What's interesting about this is that the salary floor and salary cap are linked to league-wide revenue, so salaries must increase at roughly the same rate as league-wide revenue.  If a team like the Packers is seeing its revenues grow much slower than its salary costs then other teams must be seeing their revenues grow much faster than their salary costs.  The way the salary floor and cap are calculated makes it mathematically impossible for anything else to be the case. 

    It's fine to be against revenue sharing, of course.  And some of the negatives you mention may make it a bad thing.  However, if you're not going to have cross-team revenue sharing, then it also doesn't make sense to set a salary cap across teams. It's true that Starbucks and Dunkin Donuts don't share revenue--but they also don't have a common salary cap or a draft or any of the other provisions in the CBA that set wage levels and hiring practices for both businesses collectively. 

    Ultimately, without greater revenue sharing, the only salary cap that will be viable for the poorest teams is one that adjusts salaries to what the poorest teams can afford. Apparently, this is what the owners last proposal did. But you can't blame the players for not accepting a proposal like that.  Why would I agree to link my pay to the rate that the poorest employer can afford?  Wouldn't I rather get rid of a cap altogether and negotiate with each employer separately in the hopes of getting more from a richer employer rather than accepting the salary a poorer employer can afford? If the owners get to abandon collectivism and stop sharing revenue, then shouldn't the players also get to abandon collectivism by tossing out a salary cap and negotiating with teams individually?  It seems like some people think the owners should have the rights to maximize their individual income but the players should submit to rules that limit their income only to what the poorest teams can afford.  How is that fair?  Certainly, the players would be idiots to agree to any such proposal.  You really can't blame them for doing what they did (decertifying and throwing out the CBA) given the owners' desire not to share revenue more broadly.  As I said before, if a free market approach is good for the goose, it's good for the gander too.
       

     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    Do we even know the wording of the last CBA on what is shared, etc?

    If someone has the info, please post it. Otherwise this is just speculation.

    I think it speaks volumes that Judge Nelson bitchslapped the union, basically telling them to get back to the table.

     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    Do we even know the wording of the last CBA on what is shared, etc? If someone has the info, please post it. Otherwise this is just speculation. I think it speaks volumes that Judge Nelson bitchslapped the union, basically telling them to get back to the table.
    Posted by BBReigns


    Google "CBA NFL text" and you can find it.  I've read much of the CBA.  It describes in detail how the salary cap is calculated.  It doesn't, however, describe the revenue sharing agreements reached between the teams (those are in separate documents that are referenced in the CBA but not included in the CBA).  I don't have time to dig up those documents now (and am not sure they are available online) but I'll try later today.  If you read the CBA, however, you will see that it explictly includes certain non-shared revenues (from luxury boxes, for instance) in the reveneu calculation for the salary cap.  So by itself, the text of the CBA supports my argument.
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    PatsEng . . . First, the Packers are in fact a perfect example for two reasons: one, we know their financial situation and two, we know that they complained about salaries growing faster than revenue.  What's interesting about this is that the salary floor and salary cap are linked to league-wide revenue, so salaries must increase at roughly the same rate as league-wide revenue.  If a team like the Packers is seeing its revenues grow much slower than its salary costs then other teams must be seeing their revenues grow much faster than their salary costs.  The way the salary floor and cap are calculated makes it mathematically impossible for anything else to be the case.  It's fine to be against revenue sharing, of course.  And some of the negatives you mention may make it a bad thing.  However, if you're not going to have cross-team revenue sharing, then it also doesn't make sense to set a salary cap across teams. It's true that Starbucks and Dunkin Donuts don't share revenue--but they also don't have a common salary cap or a draft or any of the other provisions in the CBA that set wage levels and hiring practices for both businesses collectively.  Ultimately, without greater revenue sharing, the only salary cap that will be viable for the poorest teams is one that adjusts salaries to what the poorest teams can afford. Apparently, this is what the owners last proposal did. But you can't blame the players for not accepting a proposal like that.  Why would I agree to link my pay to the rate that the poorest employer can afford?  Wouldn't I rather get rid of a cap altogether and negotiate with each employer separately in the hopes of getting more from a richer employer rather than accepting the salary a poorer employer can afford? If the owners get to abandon collectivism and stop sharing revenue, then shouldn't the players also get to abandon collectivism by tossing out a salary cap and negotiating with teams individually?  It seems like some people think the owners should have the rights to maximize their individual income but the players should submit to rules that limit their income only to what the poorest teams can afford.  How is that fair?  Certainly, the players would be idiots to agree to any such proposal.  You really can't blame them for doing what they did (decertifying and throwing out the CBA) given the owners' desire not to share revenue more broadly.  As I said before, if a free market approach is good for the goose, it's good for the gander too.    
    Posted by prolate0spheroid


    Actually it is mathematically possible. For instance the revenue is based on existing escallating contracts between various sponsors (team and league) many of which agreed to before or during the first portion of the recession. Those numbers are added into the total revenue thus it increases but revenue say from jersey sales and ticket sales are trending downward the revenue would still be increasing. Expiring sponsership contracts in the next couple season can't be counted on for future projection revenue. The negotiations for these contracts could be going badly (lower then previous contracts) and we would never know. So looking at that even though revenue has increased over the last couple years they could be seeing a major downward trend that the increases in players salaries will overtake future revenue projections. We've already seen this happen in MLB, NASCAR, and the NBA it just so happens that the NFL is less susceptible to these fluctuations, however, the longer the recession drags on the more likely it will eventually affect the NFL as well. Therefore it is a correct statement to make that even though current financial revenue is looking good a year or more down the road it might fall off the cliff, it's all a matter of POV. The players are looking at the current revenue numbers saying see you can afford it while owners could be looking at future projections saying if the economy doesn't improve we are looking at a major lose of revenue right around the corner.
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : Actually it is mathematically possible. For instance the revenue is based on existing escallating contracts between various sponsors (team and league) many of which agreed to before or during the first portion of the recession. Those numbers are added into the total revenue thus it increases but revenue say from jersey sales and ticket sales are trending downward the revenue would still be increasing. Expiring sponsership contracts in the next couple season can't be counted on for future projection revenue. The negotiations for these contracts could be going badly (lower then previous contracts) and we would never know. So looking at that even though revenue has increased over the last couple years they could be seeing a major downward trend that the increases in players salaries will overtake future revenue projections. We've already seen this happen in MLB, NASCAR, and the NBA it just so happens that the NFL is less susceptible to these fluctuations, however, the longer the recession drags on the more likely it will eventually affect the NFL as well. Therefore it is a correct statement to make that even though current financial revenue is looking good a year or more down the road it might fall off the cliff, it's all a matter of POV. The players are looking at the current revenue numbers saying see you can afford it while owners could be looking at future projections saying if the economy doesn't improve we are looking at a major lose of revenue right around the corner.
    Posted by PatsEng



    PatsEng--if the salary cap is 60% of league-wide total revenue, then the salary cap will rise and fall in lockstep with league-wide total revenue.  If one team is seeing its salary expenses rising (significantly) faster than its revenue, another team must be seeing its salary expenses rising more slowly than its revenue because overall revenue growth and salary growth are connected thanks to the formula for calculating the salary cap--a forumula which makes salaries a fixed percentage of revenues (more or less--I know that teams actually have a narrow range between the salary floor and salary cap in which they can set pay and there are some complications in the formula for determining salary caps that don't quite make it a straight percentage of revenue calculation--but for our purposes that won't make a huge difference in the argument).

    I think you are talking about projections of future revenue growth . . . that's not what I was talking about.  If future revenues decline, the salary cap will decline too, since that cap is set based on revenues.
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    There is no way all the details of the CBA are on the web, though. We're not privy to that information.
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    Just my oversimplified view from 35,000 feet:

    If more successful players can earn more than other players under a Salary Cap, then why can't more successful businesses earn more than others and still Share Revenue?

    The devil is in the details (who gets how much).
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : PatsEng--if the salary cap is 60% of league-wide total revenue, then the salary cap will rise and fall in lockstep with league-wide total revenue.  If one team is seeing its salary expenses rising (significantly) faster than its revenue, another team must be seeing its salary expenses rising more slowly than its revenue because overall revenue growth and salary growth are connected thanks to the formula for calculating the salary cap--a forumula which makes salaries a fixed percentage of revenues (more or less--I know that teams actually have a narrow range between the salary floor and salary cap in which they can set pay and there are some complications in the formula for determining salary caps that don't quite make it a straight percentage of revenue calculation--but for our purposes that won't make a huge difference in the argument). I think you are talking about projections of future revenue growth . . . that's not what I was talking about.  If future revenues decline, the salary cap will decline too, since that cap is set based on revenues.
    Posted by prolate0spheroid


    But future projections are part of the equation. Even though it's true the cap is based on total revenue of the league and a drop in revenue would mean a drop in salary cap what isn't factored in is that most owners reinvest back into the team (ie facilities, staffs, stadiums) based on future projects of revenue. Teams like Dal and the Pats who funded massive projects that the total payment of would act like a mortgage spread out of a period of time count on those future projections to acquire loans and fund projects. Now if say a recession were to occur and all of a sudden they see the revenue level off or take a slight dip that the original reinvestment becomes like a 2 ton anvil over their heads were even though revenue says they should be making a profit that are in fact actually losing money. The cap doesn't allow for this type of fluctruation where regardless of previously invested income by an owner, players expect a known percentage where the owner could lose a ton of money through interest. This is where the owners biggest concern is and that the players don't see. The players see that they want a hard % of the profit but the owners want a safety net of flexibility if revenue takes a dive that the funds can be used to pay long term projects. Hence why Jones and a hand full of owners who have a lot of their capital tied up in major projects are overly concern about this. It also explains why everyone thought it was a one sided deal in the last CBA. I think most recognized that they were playing Russian roulette with the economy. The economy never properly recovered and now these teams are stuck in a bad situation and want that extra breathing room.
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    There is no way all the details of the CBA are on the web, though. We're not privy to that information.
    Posted by BBReigns



    Did you look it up?  It used to be on both the NFL and NFLPA site, but it's been taken down since it expired. However, you can still find it here--we're all privy to all 361 pages:



     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    I think it speaks volumes that Judge Nelson bitchslapped the union, basically telling them to get back to the table.
    Posted by BBReigns


    Odd way to bitchslap the union, approving the mediation approach they asked for and rejecting the approach the league asked for. 
     
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    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : But future projections are part of the equation. Even though it's true the cap is based on total revenue of the league and a drop in revenue would mean a drop in salary cap what isn't factored in is that most owners reinvest back into the team (ie facilities, staffs, stadiums) based on future projects of revenue. Teams like Dal and the Pats who funded massive projects that the total payment of would act like a mortgage spread out of a period of time count on those future projections to acquire loans and fund projects. Now if say a recession were to occur and all of a sudden they see the revenue level off or take a slight dip that the original reinvestment becomes like a 2 ton anvil over their heads were even though revenue says they should be making a profit that are in fact actually losing money. The cap doesn't allow for this type of fluctruation where regardless of previously invested income by an owner, players expect a known percentage where the owner could lose a ton of money through interest. This is where the owners biggest concern is and that the players don't see. The players see that they want a hard % of the profit but the owners want a safety net of flexibility if revenue takes a dive that the funds can be used to pay long term projects. Hence why Jones and a hand full of owners who have a lot of their capital tied up in major projects are overly concern about this. It also explains why everyone thought it was a one sided deal in the last CBA. I think most recognized that they were playing Russian roulette with the economy. The economy never properly recovered and now these teams are stuck in a bad situation and want that extra breathing room.
    Posted by PatsEng

    All businesses that borrow for future growth have to worry about future revenue being sufficient to cover their debt payments and other obligations, if that's what you're saying. This isn't anything terribly unusual.  If you want to argue that NFL expenses (to cover debt, reinvestment, or anything else) are so high that a small dip in revenue (a large dip is unlikely, especially given that league revenue grew pretty much through the recession) would throw the teams into bankruptcy, then you'll have to back up that argument with some accounting for the teams' expenses.  I think that's what the players asked to see. But the owners refused. The argument you're making can only be made by seeing actual expenses. Unfortunately, none of us have that expense detail.

    None of this, though, gets at the issue presented in my original post, which is that a lot of what's driving the owners to renegotiate the CBA is a desire to avoid more revenue sharing. 

    ____________
    Later addition to this post:

    One other comment on this, PatsEng.  The owners have been talking a lot about the need to "reinvest" and build the future of the NFL.  That sounds nice, but what kind of investment is really required?  It's not like football teams have big R&D operations to develop new products.  Basically, all you need to put on a football game is a place to play and practice, players, coaches, equipment, and a marketing/sales department to sell tickets.  This isn't a terribly complex business.  The one big capital expense owners have is the cost of building and renovating stadiums.  And a lot of the owners get their stadiums financed in part or whole by taxpayers (and by selling naming rights). If there's all this high reinvestment expense outside of stadiums, what is it?  Setting up NFL Network? Sure that took some initial investment, but I doubt that's got the owners strapped for cash--in fact, I'd be willing to bet that that the NFL Network is generating a nice revenue stream that provides a very adequate return on whatever investment was made.  

    What other big investments are the owners making?  I'm sure that's what the players are wondering and one of the reasons they're asking to see expenses.

    Finally, as you consider the great risk owners are supposedly taking in building stadiums, contemplate this:

    If the NFL does return to a proposed stadium in downtown Los Angeles, the league's newest venue will be called Farmers Field.

    Developer AEG and Farmers Insurance Exchange announced the naming rights deal Tuesday in advance of a news conference attended by local politicians, athletes and businessmen.

    They did not reveal terms of the pact, but sources told ESPNLosAngeles.com that it is worth $700 million over 30 years, making it the largest naming rights agreement. Sources also said the deal could be worth $1 billion if the stadium were to attract more than one NFL team.



     
  22. You have chosen to ignore posts from zbellino. Show zbellino's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : Odd way to bitchslap the union, approving the mediation approach they asked for and rejecting the approach the league asked for. 
    Posted by prolate0spheroid


    Haha. Exactly. I bet the owner's committee can't wait for Nelson to b!tchslap the players again next week when the injunction is granted too.

    The funny part I am waiting for, is when the anti-players people (who have been complaining about how the players want this in court and how the players are holding negotiations up) feel when the owners continue to appeal this decision to the hilt, effectively trying to prolong the lack of football. 

    Everyone will (all of a sudden) be all for court then. 
     
  23. You have chosen to ignore posts from LazarusintheSanatorium. Show LazarusintheSanatorium's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : Because he can.
    Posted by p-mike


    Maaan Prairie...I gotta be honest, maybe If I was given a million guesses...there's really no chance I still woulda got this one.  Ya know I take things literally here, so I was more like, "...because he wants to keep them clean???"  For god's sakes, you know my writing by now...  I once took a creative writing course at school, and my teacher's mantra (again and again), was: "Show don't tell."  I got a good grade....but me and her both knew, I failed in this regard.  She was, "Why don't you show rather than explaining everything?"  And I was like, "Because I don't care to mislead my reader with ambiguity, and I don't really even care about having A reader...".  "Well I gotta read your stuff, it's my job."  Laz, "Oh...".  So either way, and as was the case above with your dog's b#lls...I wasn't qualified therefore to be very good with morality tales...    
     
  24. You have chosen to ignore posts from BBReigns. Show BBReigns's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems:
    In Response to Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems : Odd way to bitchslap the union, approving the mediation approach they asked for and rejecting the approach the league asked for. 
    Posted by prolate0spheroid


    No. The union wanted litigation in court as a desperate attempt to use their last bullet in the chamber.  The owners want negotiation at a table outside of court.

    You have it incorrect.
     
  25. You have chosen to ignore posts from jcour382. Show jcour382's posts

    Re: How Jerry Jones's Refusal to Share More Revenue Is Leading to the NFL's Labor Problems

    I believe a judge has been assigned to mediate where the actual talks will take place... according to profootball talk ...

     
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