Issues in NFL labor

Discussion in 'The Business of Hockey' started by fan mao rong, Jan 9, 2005.

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  1. fan mao rong

    fan mao rong Registered User

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    Collective Bargainings fans- some of you may have interest in this. Seems certain NFL owners--Jerry Jones, Dan Schneider, and the usual suspects, representing around 8 teams(including Philadelphia, Houston and the like) seem to be discontented with the NFL's revenue sharing equality----it says Here Gene Upshaw has suggested that if some owners are not generating enough revenues they should be cut like players are. The article says that. Some people should read it.
     
  2. Epsilon

    Epsilon #basta

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    I can certainly see where they are coming from. Perhaps something more like a fine for owners who do not generate enough revenue?
     
  3. hockeytown9321

    hockeytown9321 Registered User

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    Excellent article. The pro cap, anti revenue sharing contingent should look closely at this paragraph:

    "Under the system, every NFL owner starts the year on a level playing field, with nearly $100 million from NFL broadcast rights, national NFL sponsorships with companies such as Gatorade, and a redistributed portion of ticket sales. This all-for-one-and-one-for-all spirit, its supporters say, has been the backbone of the NFL's economic and competitive success, since it spreads the wealth and helps give every team, from the Packers in tiny Green Bay, Wis., to the Giants in metropolitan New York, a shot at winning a title -- and turning a nice profit."

    It talks about how level the playing field is and how profitable healthy each team is, but attributes that to revenue sharing, not the cap. Hmmm.
     
  4. CarlRacki

    CarlRacki Registered User

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    Actually, the article is incorrect. Every team does not start the year on a level playing field because of disparities in revenues from stadium naming rights, skybox sales, corporate sponsorships, concessions contracts, etc.
     
  5. PecaFan

    PecaFan Registered User

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    Except the point of the article is to point out how extensive revenue sharing is bad. Guaranteed profits leads to complacency, unfairness in that some are generating all the revenue but are not able to keep it, etc.

    The NFL is starting to see that the NHL has the right idea. This just confirms that a cap with reduced revenue sharing is the correct way to go.
     
  6. hockeytown9321

    hockeytown9321 Registered User

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    According to some owners.

    The article attributes the NFL's competitiveness and profitability to revenue sharing, not the cap.
     
  7. CarlRacki

    CarlRacki Registered User

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    Profitability? Yes. Comeptitiveness? No. The bottom line remains that some NFL teams - even with all the revenue sharing - make more money than others. If they could those teams would use that advantage in a heartbeat. The cap makes sure they can't.
     
  8. SuperUnknown

    SuperUnknown Registered User

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    Exactly, there are big problems with high revenue sharing. High revenue sharing is to sports what communism is to economy. Lower productivity and efficiency for two reasons:

    1- You don't have to optimize your revenue streams, you can sit on the ones you have and "leech" the rest on revenue sharing.
    2- A profitable business occasion without revenue sharing can become non-profitable with revenue sharing, which means you won't develop the revenue streams to their potential if there's a cost associated to it (because you pay the costs alone while you share the revenues).

    Also, in the NHL, sharing ticket revenue is almost not possible and wouldn't help all teams equally. Why?
    1- Teams play more games against their division/conference. If their division is rich, the impact of the revenue sharing is minor. However, if one "rich" team was playing in a division with only poor teams, the revenues of the rich team would be greatly impacted since they would reap almost nothing from the poor teams while paying out for every game at home. Besides, this means that you share the bulk of your revenues with your greatest rivals. Ie: Calgary plays what, once every two years in Philadelphia? This means they would receive once every two years 40% of the ticket sales there. When playing Edmonton and other "poor" teams they wouldn't receive much more than what they generate.
    2- Teams could cut ticket price and expense just to share less. Say a team can cut marketing expanses by $4M and this means they'll generate $6M less at the gates. That team saves money in 60/40 sharing scheme (since their costs go down $4M and their revenues $3.6M). Does this makes sense? Absolutely not. Apply this to everything else that's shared.

    Collectively generated revenues, like national tv deals, merchandising up to a point should be shared, but not ticket revenues, etc.
     
  9. Jaded-Fan

    Jaded-Fan Registered User

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    Which in my opinion is perfect. Why should an owner in NY make the same dollars as an owner in Greenbay? The NY owner likely spent more for his team (I know GB 'owns' the team, not an owner per se through long time ago sales of shares to individuals in GB, but you get my point). As long as it does not effect on the field competitive balance, how the profits are divided among owners makes sense to be by how much they generate to some degree or another.
     
  10. thinkwild

    thinkwild Veni Vidi Toga

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    This is funny, and Smail saying revenue sharing leads to communism.

    And then propose a cap?

    Hopefully Hockey, baskeball and football arent all out on strike at the same time two years from now.
     
  11. SuperUnknown

    SuperUnknown Registered User

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    It's just too bad that you can't grasp the difference. Also, I didn't say it leads to communism, I said that it has the same flaws (revenue sharing is to sports what communism is to economy). :help:

    A cap doesn't have any of those effects...
     
  12. Dr Love

    Dr Love Registered User

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    No, but the base of the pyramid is the same. The revenue from the TV contracts is about $5M higher per team than the salary cap.

    I just realized something we never take into account for NFL revenue--SB commericals. This year they'll take in $80,000 per second. That is not a typo.

    Re: the article.

    Keep in mind that Dan Snyder is a giant ******* and will squeeze every penny he can out of everything. Most notably he charged fans a fee to attend training camp, something that is free everywhere else (he stopped doing it after he got hell for it).
     
  13. CarlRacki

    CarlRacki Registered User

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    That $80,000 per second goes to the network carrying the game, not the NFL. The NFL indirectly gets its share of that revenue through its national broadcast contract.
     
  14. hockeytown9321

    hockeytown9321 Registered User

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    A cap levels the playing field, right? Isn't the ideal of communisim total equality? Isn't that the ideal of the cap? Has communisim ever accomplished its ideal?
     
  15. Jaded-Fan

    Jaded-Fan Registered User

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    Wow, so many errors so little time. A Cap would in theory remove an advantage that allows a handful of teams to spend multiples on the best players than the other teams. That is it. What you do with that restored somewhat leveling of the playing field is up to you, as the NFL has proven.

    Communism turned out to be about basically brutal dictatorship more than anything else.

    What other names will those who defend the indefensible resort too rather than address the real issue? Namely, iwhether their teams being able to buy up all the players they wish in a competitive sport is best for the sport or just best for them.
     
  16. hockeytown9321

    hockeytown9321 Registered User

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    It may have truned out that way, but those ditatorships are not what communisim is supposed to be. Communisim is about the proletariat(the have nots) seizing power from the bourgeois (ruling class). Marx beleived the bourgeois exploited the proletariat and used their creativity and production to generate more capital for themselves. The bourgeois then reinvested that human capital back into their business, which in turn generated more capital for them.

    First, the goal(or so misguided fans think) of a salary cap is equality for every team. Sounds like the ideals of communisim to me.

    Second, the cap would prevent reinvestment of capital into a team after a certain point. Isn't one of the ideas of capitalism to invest back into your business to make it better to generate more and more revenue? The NHL's plan sounds alot closer to Marx than Hamilton.
     
  17. Jaded-Fan

    Jaded-Fan Registered User

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    Not entirely sure how we got into political theory, and I highly doubt my wisdom in delving into this with you, as it is a red herring meant to distract from the real issues.

    I say it again, if hockey is going to compete for the sports dollars of fans in the other venues not named NY and a few others, it had better make it seem that the fans in those cities are not wasting their money, again perhaps $400 for a family of 4, on a team given a huge financial disdvantage. They will spend elsewhere.

    The big markets need the small markets or there will be no league. Simple.
     
  18. hockeytown9321

    hockeytown9321 Registered User

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    Thas fine. But the fact is the end game of communism is total equality, and thats what small market fans(not owners) want with a cap.

    The question you haven't answered to me yet is how low revenue teams can compete with the sigining bonuses the big revenue teams can pay under a cap system. Until that loophole is closed, you can't even begin to talk about total equality.
     
  19. djhn579

    djhn579 Registered User

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    What has been proposed for signing bonuses? If they use the NFL model, signing bonuses count against the cap but are spread out over the length of the contract. Since contracts in the NHL are guaranteed and I don't really see that changing, signing bonuses don't have to be huge in hockey like they are in football. In football, the signing bonuses are guaranteed money because their contracts are not guaranteed.

    If the above is used, Detroit can offer a player a $20M signing bonus and $3M per season for 5 years. The player gets the full $20M up front, but for cap purposes, Detroit has used up $7M of the cap for each of those 5 years.

    Buffalo can offer a player a $5M signing bonus on 5 year contract at $6M per year. The cap hit is still the same, $7M each of the 5 years.

    The player may be inclined to take the $20M signing bonus since he could possibly have a career ending injury before the end of the contract, but both teams could offer the same signing bonus since both teams will probably be paying for them the same way by taking out a loan for the amount of the signing bonus.

    In reality, the NFL also has some limits on how large the signing bonus could be. I think it may be set up so that the signing bonus prorated per year can't be more than the base salary.

    In the end, the signing bonus does not matter since it should count against the cap. If it does count against the cap, the big markets have no advantage over the small markets.


    As for small market fans wanting total equality, please show me where anyone has said that. I have heard people wanting the same chance to hold on to their players and go after free agents. I have not heard of anyone asking for everything to be equal.
     
  20. mackdogs*

    mackdogs* Guest

    Anyone who thinks the NHL wouldn't close a loophole as obvious as a signing bonus hasn't been paying attention. It's a moot point if ever there was.
     
  21. djhn579

    djhn579 Registered User

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    I know. But, since he asked...
     
  22. hockeytown9321

    hockeytown9321 Registered User

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    So you're agreeing with me, that some teams would have a financial advantage over another?
     
  23. hockeytown9321

    hockeytown9321 Registered User

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    Big market teams would have an advantage because they have the money to sign bigger bonuses. How can Calgary give Iginla a $12 million bonus upfront to match an offer Detroit gave him?

    So now all of a sudden (again) the NFL system isn't good enough for hockey, huh? Bet your ass that if the PA came to the league tomorrw and accpted the NFL system, the NHl would agree in a minute(minus the revenue sharing, of course) The loophole won't be closed because the NHL wants (and needs) to ensure that its biggest markets have good teams with marquis players.
     
  24. CarlRacki

    CarlRacki Registered User

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    Some teams will always have a financial advantage over others. This is exactly why a cap helps. It neutralizes, as much as possible, that financial advantage.
    This is also why I'm in favor of an NBA-style system. It won't prevent teams from spending as much as they want to spend. If the Rangers want to spend $100 million, then bully for them. Have at it.
    But what it will do is a) prevent smaller revenue teams from losing homegrown stars to other teams who can pay more b) install a maximum salary so that the market is not unduly influenced by the spending habits of the rich and famous (i.e. Mark Cuban).
     
  25. CarlRacki

    CarlRacki Registered User

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    My guess is the NHL would very willingly take is chances with the big bonus issue the second NHL players abandon guaranteed contracts. Where do you place the chances of that happening?
    Conversely, I'd bet NFL players would eschew the big bonus money in a hearbeat in exchange for guaranteed contracts.
     
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