Owners,players discussing almost 50/50 reveue split

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    Owners,players discussing almost 50/50 reveue split

    Source: Owners, players discussing almost 50/50 revenue split

    • By Associated Press
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    ROSEMONT, Ill. -- NFL owners and players are discussing a straight split of income in the next collective bargaining agreement that would net the players just under 50 percent of total revenues.

    The Top 100: Players of 2011
    "The Top 100: Players of 2011" countdown continues on www.nfl.com/nflnetwork">NFL Network on Sunday, June 19 at 8 p.m. ET. Stay tuned for a reaction show after players Nos. 21-30 are revealed.

    A person familiar with the negotiations told The Associated Press the players' share would approach the 50 percent the NFL Players Association has said it has received throughout the past decade. But the expense credits -- about $1 billion last year -- that the league takes off the top would disappear.

    The person spoke on condition of anonymity because the negotiations are supposed to be confidential. The owners are holding a special meeting Tuesday to discuss proposals made in recent negotiations with the players.

    The key topic in these negotiations is unquestionably how to split revenues in the
    future. The NFL is a $9.3 billion industry, with projections such revenues will increase substantially soon when broadcast contracts come up for renewal. For the 2010 season, the NFL set TV ratings records.

    Although no teams are claiming they aren't profitable, they say their profit margins are shrinking rapidly. Many franchises have heavy debts from stadium constructions, too. So the owners have sought an additional $1 billion of league income before sharing with the players; the league already gets more than $1 billion off the top.

    Those expense credits have been a major sticking point, though both sides recently have made some movement toward compromise. How much compromise is needed for labor peace is a key topic being discussed Tuesday.

    Copyright 2011 by The Associated Press

     
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    Re: Owners,players discussing almost 50/50 reveue split

    I state again: almost only counts in horseshoes and handgrenades!
     
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    Re: Owners,players discussing almost 50/50 reveue split

    That would be a big win for the owners.  Isn't it currently 60/40 in the players favor?
     
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    Re: Owners,players discussing almost 50/50 reveue split

    Seems like a pretty good compromise to me.  The players proposed a 50-50 split of all revenues a while back.  It sounds like the owners are now on board with that idea.  The three major pluses of this arrangement, I think are:

    1. In the short term, the players get almost the same amount they would have gotten under the prior CBA

    2. In the longer term, it helps the owners if revenues grow faster than the expense credit they got under the old CBA.  

    3. It doesn't give the owners a windfall if revenues grow very fast (as might have happened if the growth in the salary cap were pegged to a fixed percentage).

    Overall, it seems like a good compromise that has some pluses and minuses for both sides. 

    And since I'm pretty much agreeing with Rusty (and we've been on opposite sides of this all along), I think it really must be a good deal!



     
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    Re: Owners,players discussing almost 50/50 reveue split

    The owners will give up 48%, but still want expense credits, which makes it not a true 48%...

    48% of ALL REVENUE would be fair, taking 10-20% off the top, and then giving up 48% would be a huge win for the owners.

    Tcal - they were getting 60% after the credit. Which, if memory serves, of the 9 bil last year, 1 bil came off the top before the 60% was doled out, if that makes sense.
     
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    Re: Owners,players discussing almost 50/50 reveue split

    In Response to Re: Owners,players discussing almost 50/50 reveue split:
    The owners will give up 48%, but still want expense credits, which makes it not a true 48%... 48% of ALL REVENUE would be fair, taking 10-20% off the top, and then giving up 48% would be a huge win for the owners. Tcal - they were getting 60% after the credit. Which, if memory serves, of the 9 bil last year, 1 bil came off the top before the 60% was doled out, if that makes sense.
    Posted by ma6dragon9


    It does, thanks dragon
     
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    Re: Owners,players discussing almost 50/50 reveue split

    It sounds like the proposed agreement has a much more limited expense credit than the old agreement did. I think even in the old CBA there was some recognition that owners should be able to raise and invest money for stadium improvements that would increase overall revenue.  The players have an interest in letting the owners do this, since that increase in overall revenue benefits both players and owners.  I assume the new deal is going to continue to give the owners breaks to allow them to invest in better stadiums that can then generate additional revenue for both themselves and their players.  That kind of revenue-generating investment is a win for both sides, I think.

    Overall, this seems like a good deal that will ease future salary pressures on owners, but also leaves players without any significant loss in the short term and with some guarantees that they'll share evenly in future revenue growth.   
     
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    Re: Owners,players discussing almost 50/50 reveue split

    Babe's argument is partially right, partially wrong.  His characterization that the players have been "routed" however seems a bit more like Babe's wishful thinking than the truth.  After all, as Z points out above, a 50-50 split of all revenue was the players' original counter offer to the owner's original proposal.  So if anything, the final deal is looking like it will closely resemble what the players offered back in February.  
    • There's no doubt that a 50-50 split will be better for the owners than the old CBA if revenue growth is strong (and if the deal is a long one).  This is because the expense credit (about $1 billion last year) is not likely to grow as fast as revenue and therefore, under the old deal, the players actual take might have grown from the recent 50% to something closer to 60%.
    • It's doubtful, however, that the 50-50 split is worse for the players than the owners' original proposal.  As I understand it, the owners originally wanted to take a larger (and possibly faster growing) expense credit off the top, plus reduce the split of remaining revenue from 60-40 to something more like 50-50.  DeMaurice Smith said that the owners original proposal would have dropped the salary cap to about 40%-42% of all revenue from the recent 50%.  That's where the widely quoted 18% pay cut comes from. (A 9 percentage point drop from about 50% to about 41% would equate to an 18% reduction.)  
    • The owners' second proposal (the last minute one before the union decertified) was not much better for the players, since it took most of future revenue growth out of the equation.  Players would have gotten about 50% of revenue initially, but their portion would likely have shrunk significantly over time.   
    • What's good for the players in the current 50-50 split is it ensures their proportion of the revenues over the entire life of the deal stays about equal to what it has been over the past few years.  Compared with the old CBA, the future growth potential for the players isn't as high, but the new agreement does "keep players whole" at the current percentage.   
    Overall, I see this as a good deal for both sides.  It stabilizes the players' share of revenues at the current 50% of revenue, protecting the players from future reductions in that percentage and the owners from future increases.  

    This was the unions first counter proposal . . .  and so the owners coming around to it bodes well for an eventual deal since this is something the players seemed ready to accept back in February. 






     
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    Re: Owners,players discussing almost 50/50 reveue split

    Babe's got his story and he's stickin' to it! Wink


    It looks like a compromise to me, not a "rout" for either side . . . 

    And Babe is right that none of us knows the details of this offer yet . . . or really of any of the other, earlier offers.  And the devil really is in the details.  Still, we can make reasonable guesses on what was being offered at different times. 

    I don't think it was just the players who got scared of losing money.  I think a lot of owners were looking at lost revenues and big loans they need to pay back and didn't want to risk turning their deep pockets into much shallower pockets. 
     
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