Tuesday, September 08, 2009

An Acceptable Profit

Jason Cole of Yahoo! Sports has an article on the looming Collective Bargaining Agreement battle in the NFL.

I will get into our own issues with the upcoming battle in a moment--I think this is the key thesis of the Cole article (the "all of this" referenced is players getting ready to sock money away to better fight the ownership):

All of this comes in response to the owners’ decision to opt out of the collective bargaining agreement in May 2008, a move that was seen by the late Gene Upshaw, the former head of the NFLPA, as a prelude to hard-line negotiations. Upshaw had negotiated the extension of the CBA in 2006 which resulted in the players getting 59 percent of the revenue, a figure that is the largest among the top professional sports in the United States.

In the three-plus years since that agreement, owners believe that the partnership got out of whack; that too much money is being guaranteed to players. The most significant issue for owners is that the need for new stadiums has forced them to dig into their own pockets for building and upkeep while the players have profited from the additional revenue. Combined with the impact on advertising and sponsorship caused by the downturn in the economy, owners have increasingly worried about how they can maintain an acceptable profit while paying players a growing share of the pie. [my emphasis]

Who defines "acceptable profit"? The owners! Who gets to look at their bookkeeping? Hardly anyone! As I have discussed, the idea that owners paying for their own stadiums is often their own fault. The most famous new stadium, the Cowboy Stadium, cost Jerry Jones some $600 million of his own money (using the term "own money" pretty loosely there) because his stadium went some $600 million overbudget. Jerry Jones didn't have to build a $1.2 billion dollar stadium, it wasn't part of his announced public plan, and it certainly isn't the fault of the tax payers or the players on the roster that he did.

Also, it should be noted briefly that owners who have paid for a good chunk of their stadium have only raised the value of their franchise. Jack Kent Cooke paid for a good chunk of what became FedEx field, and it is one of the only reasons that the Washington Drunken Savages are one of the top 2 most valuable franchises in the NFL, and why Danny Snyder paid more money for an NFL franchise than anyone else ever had.

But let's get back to the phrase, "acceptable profit". As a fan, I'd say an acceptable profit, if I owned my favorite team, would be a couple of hundred dollar loss, if it meant that they won the Super Bowl. So what might an acceptable profit be to owners? Barnyard did a bit of research on his favorite team, the Green Bay Packers, which have an helpful advantage for Google Researchers like ourselves--they are publicly owned.

Barnyard said:

"The Packers recently renovated Lambeau Field for $295 Million in 2003. After five tumultuous years of post-construction financial uncertainty (sarcasm added), the Packers profited $20.1 Million dollars in 2008 despite spending eighty percent of "new revenue" on player costs since 2006 (from the NY Times article.)

Any business with recent multi-million dollar renovations plus significant diversions to employee salaries plus $20 million in profits is a model business, and not one that should be considering hard bargaining to the point of a potential lockout."

So here we are, with owners claiming they can't make it with the profits they are making. Meanwhile, the smallest market team in the league, on the back of a 6-10 season, with a rookie quarterback, injured starting running back, and suspect defense that was never in contention, cleared $20 million dollars in profit.

How much is Jerry Jones going to make with his $60 parking fees alone? Let's assume a conservative 10,000 cars per game, $60 a car, for 8 games--that's $4.8 million dollars. In PARKING FEES. Fuck you, Jerry Jones.

Many of us may wonder why owners would look forward to an uncapped year--and the answer is simple enough--there is a league minimum cap, too. That minimum goes away in an uncapped year, and plenty of teams, with cheap owners, would love nothing more than to jettison players and save themselves $20-40 million dollars. Would the Detroit Lions have been any worse last year if they had spent $30 million less dollars? Hard to see how. But that is because of buffoonish general management, not because of outlandish spending on free agents in Detroit. Also, that uncapped season hurts players to an unbelievable degree--it is a weapon in the hands of ownership--as Cole reports, "players would not become unrestricted free agents until after their sixth year. "

The owners are counting on shit like that to make the players buckle. But I don't see it happening. The idea of some poor rookie being stuck for six years on The Oakland Raiders is not acceptable for current players, and if veterans like Brandon Stokley are willing to take a hit to protect the next generation, the owners have already lost. More specifically, if young veterans like Maurice Jones-Drew are serious when they say things like (from Cole again) “I’m one of those guys who believes you have to fight for the good of all the players and the guys in the future, not just yourself,” the owners aren't ready for this fight. That is real labor union talk, right there.

Cole mentions that owners are throwing around the fact that the current CBA has the highest percentage of revenue going to the players. That is undoubtedly true, but it is also fair, as the NFL is the most dangerous sport in the country, and most likely to end a player's future early. Baseball features tons of guys in their late 30's and even early 40's. You will never see an offensive lineman aged 38. These guys need to get paid while they play, because they won't outlast their projected effectiveness very often.

In short, the general view of this blog is, "Fuck you, owners. If you are on in so much trouble, open up your books and prove it. Until then, how about you eat a bag?"

(hey maybe we are the lefty sportswriters Jay Nordlinger was complaining about?)


Barnyard said...

Huzzah BBM 2. Well said, and well summarized at the end.

Andrew Wice said...

Fine work. I have a feeling it will be hard to make the average NFL fan care about whether millionaires (players) or billionaires (owners) make enough money.

The only motivator for the fans would be a strike or lockout. No NFL?

A cold shiver up my spine.