Revenue Sharing.

[Daseal]

Could someone explain this to me a bit? From what I understand the teams that make more money (Redskins, Cowboys, Raiders, etc.) have to share money with teams that don't? To me this doesn't make sense at all. Owners like Snyder get crucified for being a money hungry wolf, then is forced to share his money? He spends a lot of money marketing and making the skins have mass appeal -- yet for some reason has to share his income with a team that doesn't work so hard.

Is it simply to make it so poor teams fill the salary cap and keep the league competitive? I just don't understand why successfull owners, at least in the income department, are forced to help owners who aren't nearly as good.

[wolfeskins]

i think most owners try to market thier teams well but some teams just don't have the fan base that other do. some teams don't get the same support from thier fans etc...
thats not the owners fault.
and yes , the league does this to keep every team competitive, which is a good thing. at least i think it is.

[mooby]

some teams aren't in a bigger market like dallas, or philadelphia, or washington. this is just an idea that they are thinking of, it hasn't actually been approved yet. it's so teams like the browns get a little money to get off the ground, because they don't make as much because cleveland doesn't have a large market, plus the team isn't that good. teams that make the playoffs more often make more money. i know washington doesn't support that statement, but that's because we are in a larger market.

[CRT3]

Washington maximizes revenue streams. They are the most active in creating revenue thru marketting and merchandise sales. While teams like Buffalo refuse to go after the market that is there. So the CBA is being held up till the can come to a conclusion of how to share the other revenues that are being generated such as luxury boxes, club seats, merchandise and marketting $. This is why I think you will see no cap in the 2007 season as this will be a bone of contention with many and it will be a serious fight for the $

[FRPLG]

Originally Posted by mooby

some teams aren't in a bigger market like dallas, or philadelphia, or washington. this is just an idea that they are thinking of, it hasn't actually been approved yet. it's so teams like the browns get a little money to get off the ground, because they don't make as much because cleveland doesn't have a large market, plus the team isn't that good. teams that make the playoffs more often make more money. i know washington doesn't support that statement, but that's because we are in a larger market.

Yes and no. The league has used revenue sharing for decades. Since Pete Rozelle became commissioner the focus has been on parity in the league because it is believed that the best way to be successful as a league (and therefore all the teams) is to the make the league the product and not the individual players and teams. It is believed that having parity allows fans to always have hope and therefore sucks them in better than the other sports. It has clearly worked as professional football has gone from an enigmatic fringe league in the 50's to certainly the most popular sport in the US while passing both baseball("America's Pastime") and bastketball by leaps and bounds.
The revenue sharing they currently use is based mostly on TV revenues. See in football the teams do not sign their own tv distribution rights but particpate in the league wide distribution contract which is of course billions of dollars. All this money is divided equally among the teams each year. The amount available plus some other stuff determines each year's salary cap by the way. The other stuff is generally league generated team revenues and the like. In baseball each team does it owns tv deal and basketball has a similar structure as football. Because the NBA plays so many games though the value of the TV contracts is actually less as the supply of games far exceeds the demand whereas in footballl the opposite is true.
The issue that is on the table now is the individal team generated revenues. Stuff like concessions, team apparel, and anything that is generated through individual team marketing. This stuff is not included in the revenue sharing. Te result being that some teams spend upward of 80% of their revenues(total) on salary while others spend maybe 65%. Successful marketing teams like DC and Dallas( you can debate why they are more successful. Snyder and Jones would say they do a better job of marketing while the smaller market teams would say they simply hav a bigger market and therefore more opportunity.) end up spedning near the 65 mark and the smaller market teams complain that it makes it more difficult to sompete. For a league where everyone is supposed to be on the same monetary level this an obvious problem.
I would say that in general I think Snyder probably does the absolute best job of marketing in the league. I don't think it is even close because he has a team that has struggled for over a decade and has turned it into the most valuable sports franchise in the world.
In the end they'e going to have to start including at least some portion of the team revenues simply becuase it is the way the league became successful and to abandon that now would be totally retarded. It seems completely unamerican to me but is has worked for sure and I can't see why they would stop now.

[Sheriff Gonna Getcha]

Good post CRT3, you took the words right out of my mouth. Unfortunately, the revenue sharing screws over the 'Skins.

[saden1]

Originally Posted by Ramseyfan

Good post CRT3, you took the words right out of my mouth. Unfortunately, the revenue sharing screws over the 'Skins.

How you figure it screws over the Redskins? Or would you prefere teams either go out of business or the NFL turns to the MLB? No one is getting screwed because ultimately a strong and united league is better than weak and fragmented dominated by rich teams.

Here is a question, what would the Redskins do if all of a sudden the Saints said we're moving to Norther Virginia so we can be in a better market? Or the Dallas if the Saints want to move to San Antonio?

[Sheriff Gonna Getcha]

Originally Posted by saden1

How you figure it screws over the Redskins? Or would you prefere teams either go out of business or the NFL turns to the MLB? No one is getting screwed because ultimately a strong and united league is better than weak and fragmented dominated by rich teams.

Here is a question, what would the Redskins do if all of a sudden the Saints said we're moving to Norther Virginia so we can be in a better market? Or the Dallas if the Saints want to move to San Antonio?

I'm not disagreeing with the current system. If there were no revenue sharing, competition would go out the window as teams that don't draw as much money might not spend enough on players. So, I am not saying I want the scheme that MLB has.

All I am saying is that it sucks for the Redskins that we don't get to keep all of our revenue. It's unfortunate not only for Daniel Snyder, but also for 'Skins fans since the revenue sharing affects ticket prices.

[saden1]

Originally Posted by Ramseyfan

...It's unfortunate not only for Daniel Snyder, but also for 'Skins fans since the revenue sharing affects ticket prices.

Sorry mate, ticket prices have nothing to do with revenue sharing. The thing that drives ticket prices is demand. Redskins have a long waiting list. While they have to be somewhat reasonable they have the luxury of having so many well off people in the DC area on the waiting list.

If revenue sharing had anything to do with ticket prices then NFL teams would be smart to start charging $100 for shitty seats.

[Sheriff Gonna Getcha]

Originally Posted by saden1

Sorry mate, ticket prices have nothing to do with revenue sharing. The thing that drives ticket prices is demand. Redskins have a long waiting list. While they have to be somewhat reasonable they have the luxury of having so many well off people in the DC area on the waiting list.

If revenue sharing had anything to do with ticket prices then NFL teams would be smart to start charging $100 for shitty seats.

If a team loses revenue (via revenue sharing), it, like any other company, is going to try to make up such losses by some other method (i.e. jacking up ticket prices, food prices, or whatever else it can get away with). The revenue sharing is essentially a built in cost of doing business in the NFL. Who does that cost get passed onto if not us fans? I'm sure Daniel Snyder isn't going to "take one for the team." That's just my two cents.

But, if you are privy to some information that I am not, please share it.

[skin4Life28]

Its basically the same thing as the luxury tax in baseball. Except the Yankees can sign who ever they want. Oh wait, we do that to.

[BigSKINBauer]

This is an idea right it hasn't been approved. This is just as likely to pass as the idea saying that a team's salary cap will be determined by its revenue which i think is bogus . Obviously it will help the skins but i wouldn't want football to become baseball.
But if the idea that we are talking about, the sharing revenues, i would hate it just as much. If an owner knows that they will increase their own profit by doing things for the fans like fan support day or making new stadiums or improving the ones that they have,they will for their own profit. BUUUUUT if they know they are gonna split the shit 32 ways it won't be that great of an incentive to put up a new jumbotron or make special merchandice. The only good i see comming from this is a possible decrease on ticket prices just to build spirit for the team because it doesn't really affect the team it only affects the league allittle with the revenue loss.

Really why would an owner do ANYTHING to increase ticket sales by adding to the stadium if they are gonna end up only getting 1/32 of the profit?

[Defensewins]

Originally Posted by Daseal

Could someone explain this to me a bit? From what I understand the teams that make more money (Redskins, Cowboys, Raiders, etc.) have to share money with teams that don't? To me this doesn't make sense at all. Owners like Snyder get crucified for being a money hungry wolf, then is forced to share his money? He spends a lot of money marketing and making the skins have mass appeal -- yet for some reason has to share his income with a team that doesn't work so hard.

Is it simply to make it so poor teams fill the salary cap and keep the league competitive? I just don't understand why successfull owners, at least in the income department, are forced to help owners who aren't nearly as good.

I agree with your concern with this system, there is no incentive for the poor teams to be more lucrative and perform on the field.

The NFL's complicated economics works like this:

The NFL is making about $5.2 billion in revenue per year. Every owner starts out with nearly $100 million a year each from national television and radio contracts and national sponsorships. In addition they get one-third of ticket revenue from each game played, which is pooled and redistributed equally among all teams. The clubs also receive equal portions from a 12 percent royalty on every NFL-branded piece of merchandise. In all, about $3 billion of the $5.2 billion pot is shared equally.
Under the current collective bargaining agreement, which expires at the end of the 2007 season, an annual ceiling is placed on player payrolls of about 65 percent of defined league revenues. So even if Snyder makes more money, he cannot spend it on players salaries. After the $100 million distribution from the league, teams are largely on their own.
Because Snyder is a smart at generating additional revenue, the Redskins' annual revenue has increased from more than $100 million a year when Snyder took over the team in 1999 to around $245 million. So this proves there is no correlation between high-revenue teams and winning percentage. And no correlation between salaries paid and winning percentage.

My major problem with this system is seeing cheap teams like the Cardinals perform so poorly on the field and the owner is a cheap lazy SOB. But yet he is pocketing millions and under spending by $10m on players salaries. Then he complains when his stadium is empty. He is creating the problem. He has not incentive to improve, because the leagus is subsidizing his team. Hard working owners like Snyder are paying his salary and bills.

[Schneed10]

Originally Posted by Defensewins

I agree with your concern with this system, there is no incentive for the poor teams to be more lucrative and perform on the field.

The NFL's complicated economics works like this:

The NFL is making about $5.2 billion in revenue per year. Every owner starts out with nearly $100 million a year each from national television and radio contracts and national sponsorships. In addition they get one-third of ticket revenue from each game played, which is pooled and redistributed equally among all teams. The clubs also receive equal portions from a 12 percent royalty on every NFL-branded piece of merchandise. In all, about $3 billion of the $5.2 billion pot is shared equally.
Under the current collective bargaining agreement, which expires at the end of the 2007 season, an annual ceiling is placed on player payrolls of about 65 percent of defined league revenues. So even if Snyder makes more money, he cannot spend it on players salaries. After the $100 million distribution from the league, teams are largely on their own.
Because Snyder is a smart at generating additional revenue, the Redskins' annual revenue has increased from more than $100 million a year when Snyder took over the team in 1999 to around $245 million. So this proves there is no correlation between high-revenue teams and winning percentage. And no correlation between salaries paid and winning percentage.

My major problem with this system is seeing cheap teams like the Cardinals perform so poorly on the field and the owner is a cheap lazy SOB. But yet he is pocketing millions and under spending by $10m on players salaries. Then he complains when his stadium is empty. He is creating the problem. He has not incentive to improve, because the leagus is subsidizing his team. Hard working owners like Snyder are paying his salary and bills.

Great analysis, you're dead-on.

Dan Snyder and Jerry Jones (the highest revenue generators) contend that less revenue should be shared because of owners like that of the Cards. They contend that there isn't enough incentive for them to market themselves because they can grab a big chunk of shared revenues to make up for their laziness. I agree, to a point. The worst thing that could happen to the league is moving back to the un-capped era. The point was made earlier, Rozelle's theory, that league parity is what leads to compelling drama and interest across the entire country. Without a salary cap, big market teams like our Redskins will outspend the smaller market teams and gain a big advantage in player acquisition. This leads to the PERCEPTION amongst the public that the smaller market teams don't have a chance to compete, and hence interest drops. (It doesn't matter whether wins and losses are actually tied to payroll size or not, what matters is that people PERCEIVE that is the case, and consequently the non-die-hard fans lose interest once they realize their team can't afford to sign the household name players) And when some fans begin losing interest, demand for tickets decreases, as well as the number of people who will watch the games on TV. That leads to declining TV ratings, and that means fewer TV revenues for the NFL. That's the key, those TV revenues are the biggest chunk of the shared pot, if TV revenues start declining, ALL NFL teams will be worse off, including Dan Snyder and Jerry Jones.

Not to mention the quality of the league declines as the big market teams (like the Yanks and the Red Sox) just spend their way into the postseason.

I'm OK with wanting to adjust the amount of shared revenues, but not if it destroys the salary cap system.

[BigSKINBauer]

Originally Posted by Schneed10

Great analysis, you're dead-on.

Dan Snyder and Jerry Jones (the highest revenue generators) contend that less revenue should be shared because of owners like that of the Cards. They contend that there isn't enough incentive for them to market themselves because they can grab a big chunk of shared revenues to make up for their laziness. I agree, to a point. The worst thing that could happen to the league is moving back to the un-capped era. The point was made earlier, Rozelle's theory, that league parity is what leads to compelling drama and interest across the entire country. Without a salary cap, big market teams like our Redskins will outspend the smaller market teams and gain a big advantage in player acquisition. This leads to the PERCEPTION amongst the public that the smaller market teams don't have a chance to compete, and hence interest drops. (It doesn't matter whether wins and losses are actually tied to payroll size or not, what matters is that people PERCEIVE that is the case, and consequently the non-die-hard fans lose interest once they realize their team can't afford to sign the household name players) And when some fans begin losing interest, demand for tickets decreases, as well as the number of people who will watch the games on TV. That leads to declining TV ratings, and that means fewer TV revenues for the NFL. That's the key, those TV revenues are the biggest chunk of the shared pot, if TV revenues start declining, ALL NFL teams will be worse off, including Dan Snyder and Jerry Jones.

Not to mention the quality of the league declines as the big market teams (like the Yanks and the Red Sox) just spend their way into the postseason.

I'm OK with wanting to adjust the amount of shared revenues, but not if it destroys the salary cap system.

I completely agree, i just don't understand 1 thing,.... i heard that 2007 will be an uncapped year, is this true or will this be resolved. Does that mean we could sign players for 7 years and pay the full amount during that single year. we could cut all the players and not worry bout penalties and sign the probowl team. (I don't want this to happen) Is this a possiblility or will the situation be resolved..... or has it been resolved?