Salary Cap Analysis

Salary cap is here to stay.

NFLPA President Gene Upshaw has stated publicly that without a new CBA or an extension of the current CBA it would render the 2007 season as a "cap-less" season. He stated emphatically that if that happened there would be a player lockout and a strike would be inevitable.

Biggest hurdle for the CBA right now, and has really always been, revenue sharing. It basically states that teams that bring in the largest revenues, like Washington and Philly, would be forced to share a portion of those revenues with smaller market teams, like Buffalo.

Biggest hurdle for the CBA right now, and has really always been, revenue sharing. It basically states that teams that bring in the largest revenues, like Washington and Philly, would be forced to share a portion of those revenues with smaller market teams, like Buffalo.


And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

I can go on and on all day long about this topic.

In life, I like capitalism and reaping the benefits of your own labor. But not in sports.

In sports, the nature of the business is to put the most exciting product on the field, and generate more fan interest so that you can charge more for tickets, more for merchandise, and reach more eyeballs which brings in more advertising money. Revenue sharing helps ensure that each team is on equal financial footing so that the only place they are competing against one another is on the football field. If teams are competing against each other financially speaking, the competition shifts away from the football field and into the marketplace. Fans of small market teams will begin to perceive their teams have no chance and their interest wanes. The KC Royals are a perfect example. Major League Baseball can't get much out of that area, financially speaking, because nobody wants to see the Royals because they stink, nobody wants to buy Royals jerseys, and nobody wants to watch them on TV. But look at the KC Chiefs. Same market, but because of revenue sharing they can always field a competitive team. And because of that the fan interest is there in droves. The NFL can market to the entire country because of their revenue sharing plan. MLB is more limited.

In life, I like capitalism and reaping the benefits of your own labor. But not in sports.

In sports, the nature of the business is to put the most exciting product on the field, and generate more fan interest so that you can charge more for tickets, more for merchandise, and reach more eyeballs which brings in more advertising money. Revenue sharing helps ensure that each team is on equal financial footing so that the only place they are competing against one another is on the football field. If teams are competing against each other financially speaking, the competition shifts away from the football field and into the marketplace. Fans of small market teams will begin to perceive their teams have no chance and their interest wanes. The KC Royals are a perfect example. Major League Baseball can't get much out of that area, financially speaking, because nobody wants to see the Royals because they stink, nobody wants to buy Royals jerseys, and nobody wants to watch them on TV. But look at the KC Chiefs. Same market, but because of revenue sharing they can always field a competitive team. And because of that the fan interest is there in droves. The NFL can market to the entire country because of their revenue sharing plan. MLB is more limited.

Amen.

I like STJack! He comes with a bit of "tude" every time, but not nasty or insulting!

I just like throwing the "sand" back at him!

I see your point Schneed10. Don't like it particularly, but I see it.

The NFL is where it is today because of revenue sharing.

And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

Not my point...but as long as you bring it up the Redskins LEAD THE LEAGUE in revenue. They are higher in revenue than Dallas by about 40 million.

So you need to be mentioning Dan Snyders name way before Jerry Jones.

If the teams go to some sort of Draconian revenue sharing, what would be the motivation for any club to increase its revenues, or to field a winning team at all? If every team in the league ends up in the same place financially, why not just field a bunch of scrubs and wait for the money to roll in from elsewhere.
The stadium naming example is perfect. If Green Bay wants to continue with the name 'Lambeau' thats fine. How are they entitled to any of the money from teams who choose another way. Likewise why should a team that can sell 100,000 seats at a $100 each be penalized for the loyalty of its fans. It feels like the welfare teams are banding together to stick it to the more succesful franchises. They're already being subsidized as it is but they want even more.
Does anyone know exactly where the various owners stand? Is it part of the CBA negotiation or is it seperate? Does the NFLPA have a stand on this issue? Any help would be greatly appreciated.

If the teams go to some sort of Draconian revenue sharing, what would be the motivation for any club to increase its revenues, or to field a winning team at all? If every team in the league ends up in the same place financially, why not just field a bunch of scrubs and wait for the money to roll in from elsewhere.
The stadium naming example is perfect. If Green Bay wants to continue with the name 'Lambeau' thats fine. How are they entitled to any of the money from teams who choose another way. Likewise why should a team that can sell 100,000 seats at a $100 each be penalized for the loyalty of its fans. It feels like the welfare teams are banding together to stick it to the more succesful franchises. They're already being subsidized as it is but they want even more.
Does anyone know exactly where the various owners stand? Is it part of the CBA negotiation or is it seperate? Does the NFLPA have a stand on this issue? Any help would be greatly appreciated.

about scrubs teams: if you're under the salary cap, at the end of the year whatever you're under by gets taken and distributed evenly to all the nfl teams i believe, so its not like there's much to gain there.

again, if you let people reap their own rewards, there's a much higher chance of less income and less interest further down the road. Right now the MLB only has 2-3 teams of any importance and that's really sad.

I think one point that Snyder should push in terms of revenue sharing relates to public financing of stadiums and facilities. Mr. Cooke spent about 300 million dollars on the Redskins Stadium in the nineties. Since then Mr. S has spent 100 million or more on additional improvements. P.G. County paid for some infrastucture improvements, access roads, etc. Around the same time, Denver succeeded in convincing local voters to authorize funding for their current home Invesco Field. A number of other localities (Baltimore, Cleveland) have done the same for their teams. In terms of real revenue the Redskins are actually operating a defecit as it pertains to these teams. When voters give a team a 500 million dollar stadium shouldn't that be regarded as revenue for that team and payed back to other clubs under a revenue sharing regime? Its not as though the skybox money goes back to the city or state. The team keeps that money. The team may not technically own the stadium, but they benefit from it just as though they did. This is a huge windfall.

The reality is that what the less entrepenuerial owners want is not revenue sharing but rather revenue redistribution. When its to their benefit they sing the "we have to do what's best for everyone" tune. In circumstances where they benefit from operating unilaterally, as in the example above, they seem to have a less egalitarian spirit. Update: For example, witness Art Modell on the Pete Rozelle "Spotscentury" program I just saw. Modell: "The motto with us has always been 'Think League'". (May he RIP)

While there are unique situations like New Orleans where teams face legitimate financial hardships, most teams should be creating ample revenue on their own. Is Paul Brown's name more sacred than Mr. Cooke's? Not to me. Cincinatti could sell the naming rights for at least as much as the Redskins did. They choose not to. Furthermore, we have to face the reality that N.O. may no longer be a sustainable market. Teams have moved before.

In the end any additional revenue sharing should be limited to revenue streams that all teams necessarily engage in. These might include radio, preseason ticket, preseason television, concessions, and even parking. Maybe these disincentives will have the unintended benefit of stabilizing the costs to fans. Again, an owner may say why raise prices and anger fans if I'm not getting the money? As Redskins fans that's the most we can hope for.

Finally, am I wrong in assuming that some owners are now using the possibility of an unrenewed CBA as a threat to pry concessions on revenue from other owners? I would really appreciate some instructive engagement from those of you who are so well versed in the financial aspects of all this.