NFL to pull plug on $100 million revenue-sharing program - ESPN
From ESPN's Chris Mortensen: "In a significant move that could impact the flow of money to potential free agents and the competitive balance of teams, the NFL has notified the players' union that, effective next March, owners will pull the plug on the $100-million-per-year revenue-sharing program that has subsidized lower-revenue clubs, multiple sources said."
about 2 years ago
Brian Galliford
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It's official
We’re screwed.
Absolutly HORRIBLE move from the league. Detestable as well. And all in he name of a few greedy owners. Our team just suffered a sever blow folks.
by CanadianBillsFan on Dec 6, 2009 1:57 PM EST reply actions
The one positive out of this
the government is going to take another look at the NFL’s anti-trust exemption because of this and the NFL doesn’t want to lose that.
Baloney
A phony concession for the owners to make when negotiations heat up. No one actually wants this (except Jerry Jones, maybe).
Not time to panic yet
This is a power move by the owners to put pressure on the players union during CBA negotiations. Jerry Jones may not give a crap either way, but I am sure Goodell does. I will be surprised if this stands long term.
"The Bills have no playoff aspirations" – Dan Dierdorf
Why? Because the Bills would be less competitive than they already are??????
J/K…..I agree this is not a good thing, but it hasn’t actually happened yet.
"The Bills have no playoff aspirations" – Dan Dierdorf
If this is not a ploy by the owners, you can be sure that Chuck Schumer is going to have something to say about it. He can be very effective in situations like this. One concern I have is that, if it looks like it is for real, it may make it harder for us to attract the GM and HC candidates we want. It makes being a small market team even less attractive.
Good point....great.....just went you think the Bills couldn't get any less attractive...... the Bills are the Joan Rivers of the NFL
"The Bills have no playoff aspirations" – Dan Dierdorf
Even with the revenue sharing the Bills havent been competitive......so I dont see how this is gonna change anything.
You know there is a problem with the education system when you realize that out of the 3 R's only one begins with an R. - Dennis Miller
by norcaliangelsfan on Dec 6, 2009 4:15 PM EST reply actions
LOL!!!! Guess I should have read all the comments first.....said the same thing above :-)
"The Bills have no playoff aspirations" – Dan Dierdorf
lol.
You know there is a problem with the education system when you realize that out of the 3 R's only one begins with an R. - Dennis Miller
by norcaliangelsfan on Dec 7, 2009 11:00 AM EST up reply actions
NFL Pittsburgh vs. MLB Pittsburgh
NFL Minnesota vs. MLB Minnesota. We have the same problems as the Jets only a little more so. At least we are on the same playing field as the other teams. Without revenue sharing the Jets will always be better than the Bills.
How’s that for doomsday!
Pitt: One of the best ownership in professional sports vs. one of the worst. You can’t compare the two. The Pirates aren’t bad because they’re a small market club.
Minn: Vikings: 3 playoff appearances since 2000 and a team that may have to move. Zero SB wins.
Twins: 5 playoff appearances since 2000, a brand new stadium and 3 WS wins in their history
So I’m not really seeing your point here.
I don't know anything about baseball
but from what I hear, in baseball, if you are in a small market it is very hard to be a consistent winner. At least now, barring Alien/World Govt. conspiracies, I can believe that the Bills are a few players away from fielding a dominant team. Without revenue sharing we would just be a farm team.
Agree with BF
In MLB, there are 3 or 4 competitive teams in each of the NL and AL each year. Everyone else ranges from also-rans to tomato cans. The pecking order is pretty much established two months into the season and any lingering questions are settled by the All-Star break. I haven’t done the math, but I have a strong feeling that the overall decline in the interest in baseball in the US is because there really is no reason to root for your team in most markets after June (I wonder if Malcolm Gladwell has analyzed this yet?) (And even as a born and bred Yankees fan, I don’t get much thrill rooting for my team when I expect them to smash everyone every year) (or it could just be that Baseball is boring as heck).
Notwithstanding perpetually mismanaged teams, it seems an NFL team can be turned around and made competitive after bouncing off a low in 3-4 years. I assume that is a function of revenue sharing and the salary cap (and Football acumen in the front office – but the latter is not even a starter without the possibility of the former two factors).
Conceptually, it seems to me the NFL got it right when they saw the entire league as a product, not just individual teams. That makes a whole lot more sense – where is a football team without a league to play in? If a league is competitive, where as many fans across the country as possible thinks their team has a shot deep into the season, that spells business success. There might even be a secondary effect where fans will get interested in other teams just because they’ve been following the drama of the season more closely, albeit through the lens of their own team.
You don’t get these effects in in MLB in a place like KC, for instance, where the team hasn’t done squat since George Brett retired and the team can’t even contemplate competing for talent in the dog eat dog business model they have.
It would be a disaster for the NFL if this is allowed to happen. It would be the Giants, Cowboys and Pats every year for ever after. Blech.
You hear that?
That’s the sound of the freight-line trucks warming up for their trip to 1BD.
Twitter: helping to make anti-social people anti-socially social.
by TheAfghanTwilight on Dec 6, 2009 6:26 PM EST reply actions
The players union plans to fight the move before a special master because it contends that the collective bargaining agreement gives it the right to approve or challenge any changes to the revenue sharing model.
http://mobile.nytimes.com/article?a=514957&f=27
It seems nearly certain that no deal will be reached to avert an uncapped year and a management executive said the supplemental revenue sharing applied only to capped seasons. Management claims that the special rules set out to govern an uncapped season should maintain competitive balance even without the supplemental revenue sharing.
"Play like hell and win." - Perry Fewell
Your daily source for Buffalo Bills information.
This is going to hurt players more than owner. No minimum salaries for one.
"Play like hell and win." - Perry Fewell
Your daily source for Buffalo Bills information.
Right. I think it’ll be a large trickle-down effect though. First the players, then not having them in the city, causing the fans to stop buying season tickets…bad move by the NFL. Jerry Jones should stick to getting pedicures and perms. He’s a tool and a large reason this move spells doom.
Twitter: helping to make anti-social people anti-socially social.
by TheAfghanTwilight on Dec 6, 2009 7:05 PM EST up reply actions
Wait a second Matt. Are you saying this is true?
No minimum salaries for one.
Or is it just no “minimun salary cap”? I’ll be shocked if it’s the salary thing…
I’m not sure on the minimum salary part. I’ll have to check into that. I meant the minimum team salary.
"Play like hell and win." - Perry Fewell
Your daily source for Buffalo Bills information.
by MattRichWarren on Dec 7, 2009 6:59 AM EST up reply actions
Yes, this is bad for Buffalo and the Jags, Bengals and some others. Before dumping on Jerry Jones, Dan Snyder and other uber rich punching bags consider a few things:
1. There are no poor NFL owners. Some have more than others but every person who owns an NFL franchise is a billionaire or very close to it. Can you think of anything more pathetic than a billionaire crying poverty? Generally the spectacle arises when a really rich owner wants the city/state to pay for a billion dollar stadium for his private enterprise. In this case small market owners—all of them rich men—want a handout from the other teams. It’s hard to get worked up about one rich guy whining that he’s not as well off as some other plutocrat.
2. This only became an issue when the owners agreed—all but Mike Brown and Ralph Wilson—to the current revenue sharing system. It was a terrible deal for the owners as it included things like stadium naming rights in the percentage of money due to players. With carte blanch to rewrite the system from the ground up there is no reason to think that this will continue to be an issue.
3. Each franchise is a business. While the franchises share common advertising, rules, products, etc. at the end of the day each is a stand alone enterprise. For example, a friend of mine owns one of the most successful Quiznos in New Mexico. He’s under no obligation to send any of his profits to less successful Quiznos. Why would he? He’s the one who paid the franchise fee ($25,000 by the way), got the loan to build and open the restaurant, hire and train his crew and so on. Likewise, NFL franchises aren’t obligated to support one another financially.
4. I am not advocating a system in which teams get to spend whatever they want on players. I think that would be a disaster. Instead, I believe the NFL will adopt a system where the players get a greater share of the genuinely shared revenue (TV, endorsements, merchandise, etc) and owners keep 100% of unshared revenue (naming rights, parking fees, concessions, etc). Guys like Snyder can continue to merrily fleece fans in his area while teams like Buffalo will earn less—but everyone will have the same amount available to spend on players….and I wouldn’t be surprised to see players insist on forcing teams to spend every penny they can on players every year.
Of course we could make things more challenging, Lisa, but then the stupider students would be in here complaining, furrowing their brows in a vain attempt to understand the situation--Seymour Skinner
Excellent post Ron. All four points are spot on, especially number four because it’s great to see how this process can play out in a way that is fair to the bigger markets, smaller markets and players alike. Hopefully the NFL is smart and reasonable enough to build a new CBA around a salary cap that is based off of shared revenue streams while still allowing the richer owners to make buttloads off their big market teams.
I signed up for Second Life about a year ago. Back then my life was so great that I literally wanted a second one. In my Second Life I was also a paper salesman and I was also named Dwight. Absolutely everything was the same. Except I could fly. - Dwight Schrute
Very good post, Ron However, I actually think that your point #3 is not quite relevant to this situation. If the Quiznos stores are not in the same market, there’s absolutely no competition between them, so no reason to think any money should change hands. Also, even if the Quiznos stores are right in the same market/same city, although they would be possibly competing for the same customers, it wouldn’t be because the stores would have to compete for the same resources just to do their job (e.g. store A gets roast beef this week, but store B gets none because it went to store A). In fact, if the stores in the same market are owned by the same person, which they often are, there isn’t even competition for employees, because the same owner can put the same manager over all his stores in that maket, and managers can ask employees to switch between stores. All in all, the success of one store does not have to come at the expense of the other stores.
In the NFL, the owners are competing against each other within the same pool of resources (players) to compete against each other on the field. The success of each team is at the expense of every other team.
I’m not saying I think revenue sharing should happen, and I think all your other points are spot-on, I just disagree that point #3 is relevant to this discussion.
2010 Bills' truth in advertising: "Look out Cleveland, this year we score 6!" - bluecollarbuffalo
Point 3
I like where you are coming from with your post, but gotta disagree on 3. The Quiznos analogy doesn’t apply to the NFL, at least the way you’re posing it. You are inserting the standard free market ideology where it doesn’t have application or even reality, no offense.
The quintessence of organized sports is competition. If you are not distinguishing yourself by beating others in competition, what are you? A bunch of well payed athletes practicing and scrimmaging offense against defense. Wow, that’s fun. If I want to see athletically gifted people moving their bodies, I’ll go see Cirque du Soleil. At least they have chicks with rockin hard bodies in skin tight clothes and less.
It behooves any team owner to want competition, even if that means bigger market teams subsidizing smaller market teams. Its argued all the time that what makes the NFL great is the parity. Get rid of the parity and what do you have? MLB. See my post in a thread above.
The real product being sold to fans is the competition. The individual teams are creatures of the competition.
Also, to an extent, your buddy with the Quiznos franchise is underwriting other Quiznos (certain contributions are made annually to the franchisor for marketing and keeping the expansion going), as is the overall ubiquity of Quiznos helping your buddy – its one of the strong selling points of having a franchise instead of just a stand-alone sandwich shop. When you pull into a town from somewhere else, you can gamble on Jimmy’s Deli or you can go to Quiznos (or McD, or Buger King, or Taco Bell etc.) and know what you are going to get within reason.
There was a reason that Anti-Trust laws were passed – to foster competition. In the end, we all benefited because Standard Oil was not allowed to have a monopoly. Same with Bell. The efforts to preserve competition, even when it seems unfair in a purely free market sense (a complete fantastical dream by the way) more fans benefit when it is the guiding value. Maybe some of you will keep rooting for the Bills when they are relegated to the status of tomato cans permanently, but I will lose interest. I’d bet its the same for a bunch of others also.
The overall point remains: instead of forced redistribution of wealth the league should find another way to level the playing field. Otherwise, successful teams are punished and unsuccessful teams are rewarded. That’s not good for the long term outlook of the league—successful teams will be less motivated to generate cash knowing it will be given to others and unsuccessful teams will happily continue to take handouts.
According to legal anti-trust maneuverings by the league, the teams are indidually owned and operated but also under the umbrella of the league as a whole. That’s how the league justifies the shared revenue genereated by merchandising. It’s also how the league likely justifies things like the salary cap. As such, the teams aren’t competing to sell more merchandise nor to increase their salary cap limit.
Teams do compete for players, which is why the salary cap is critical. Like you, many fans will lose interest in the sport if there is obvious competitive imbalance. That will hurt the loser teams but also take a toll on the perpetual winners as well. After all, if about 40% of the NFL fan base goes looking for a sport that isn’t essentially rigged the almighty TV revenues will drop accordingly.
Of course we could make things more challenging, Lisa, but then the stupider students would be in here complaining, furrowing their brows in a vain attempt to understand the situation--Seymour Skinner
I wish I specifically knew what forms of revenue this was about. Is it all non shared revenue? I assume that tickets are part of this, but what about playoff tickets? Does a percentage of that go into a shared pool? Merchandise? And merchandise sold in stadium too? I’ll assume that advertisements, local TV deals and naming rights aren’t shared, but I could be way wrong on that.
Does anybody know enough about this to explain it a little more? What I know is that every team doesn’t just throw specific forms of revenue into a pool and then every team splits it up evenly. It’s a luxury tax type system like MLB uses where teams that make a certain amount have to put income into a pool where other teams then get that money. I have no clue how it’s determined which teams get the money.
It’s important to realize that football will never be like baseball and the way that certain teams dominate. The NFL gets ridiculous money from their TV contracts and that money will always be shared. Wikipedia has that total at 20.4 billion dollars over the life of all the current TV deals and the article says that all shared revenue sits at 6.5 bil per year. So this 100 mil pool is really nothing in comparison. The NFL is a 16 game season compared to the 162 games of baseball so the big discrepency in tickets sales in baseball adds up tenfold compared to football teams. Even a league that goes without a cap for 25 years wouldn’t lead to anywhere near the spending differences that happen in the MLB where the Yankees spend 6 or 7 times as much as the lowest payrolls.
I signed up for Second Life about a year ago. Back then my life was so great that I literally wanted a second one. In my Second Life I was also a paper salesman and I was also named Dwight. Absolutely everything was the same. Except I could fly. - Dwight Schrute
This is stadium based and for teams like the Bills and Vikings it is a major hit.
http://espn.go.com/blog/nfcnorth/post/_/id/6949/vikings-a-big-loser-in-revenue-sharing-news
The NFL gets ridiculous money from their TV contracts and that money will always be shared.
Except for the fact that the reason the NFL gets this money is because of their anti-trust exemption. If they lose this, and Congress is always looking for a reason to meddle with the league, then kiss that goodbye. NFL teams will have to negotiate their own tv contracts which would be the kiss of death for the Bills.
by twoeightnine on Dec 7, 2009 12:13 AM EST up reply actions
I’m assuming that stadium based means ticket sales? Or is it more complex than that?
And the article says that the top 15 teams all put into the 100 mil pool and the bottom teams all get a percentage of that based on what they pulled in from the ticket sales. So the question is, where does Buffalo rank in terms of revenue from tickets? It can’t be very high. They have a ton of seats, but the lowest prices in the league due to a lack of big money seats and an abundance of cheaper nosebleeds in addition to prices that are low in general. The article also says that the Vikings are 2nd last and this will cost them 5-10 mil in yearly revenue, so it’s a substantial hit if a team like the Bills took that out of player and coaching salaries as opposed to Ralph’s pocket. It’s not the end of the world either, especially if Buffalo is in the 5 mil range as opposed to the 10 mil range. It would make it even more difficult for Buffalo to keep the team after it’s sold without building a new stadium.
I’m not remotely worried about the NFL ever being forced to negotiate TV deals on a team by team basis. I don’t think pro sports will ever have the anti-trust laws applied to their TV deals.
I signed up for Second Life about a year ago. Back then my life was so great that I literally wanted a second one. In my Second Life I was also a paper salesman and I was also named Dwight. Absolutely everything was the same. Except I could fly. - Dwight Schrute
My understanding is that ticket sales are split evenly between the home and visitng teams, playoff or not. Naturally, this is a source of frustration for owners who charge an average of $100+ per ticket. Buffalo makes a lot more money playing in Dallas than Dallas does playing in Buffalo. The obvious solution is to allow teams to keep all of the money from ticket sales at their stadiums. Then no owner would care what any other owner charged for tickets. The only exception would be playoff games, when the revenue would need to be divided between the two teams…..and, hey, if Dan Snyder doesn’t like the meager take when playing a playoff game in, say, Green Bay then he needs to make sure his team hosts the game instead of being the visitor.
My understanding is that all NFL badged merchandise revenue is shared evenly, just like the TV money. Again, the teams that generate the most merchandising revenue aren’t happy about not getting a proprotional share but there’s really no easy out here.
Of course we could make things more challenging, Lisa, but then the stupider students would be in here complaining, furrowing their brows in a vain attempt to understand the situation--Seymour Skinner
This is not a problem...
I don’t claim any real knowledge of what the nfl revenue sharing provides other than the fact that it’s a $100 mio fund that accounts for about 1.5% of revenue..but isn’t the real problem the uncapped year? You guys are making all kinds of references to baseball —baseball has revenue sharing (they call it luxury tax), but no cap.
If there was no revenue sharing but there was a cap, every team would still have the potential to be competitive, right?
What revenue sharing ensures is that teams that lose money still can turn a profit. This is an absolutely ridiculous situation that helps nobody except bad owners. I mean there’s always the case of the “rebuilding year” where the revenue sharing could act as a loan to help poor teams improve there franchise in a manner so that they can turn a profit on their own —but how long should that take? 4 years? Seems fair to me.
It’s not like these owners don’t have the capital to invest in their franchises. Yea, some owners may have have to actually make a real investment in the team to ensure future profit —but that’s the way all business is. If you’re not confident that you can run a successful business —then maybe you shouldn’t be operating it.
There’s also the case of incentives…there is is still the incentive to go out and try to earn more money —make your franchise more valuable etc…but revenue sharing means that you don’t have to. Getting rid of revenue sharing creates an incentive for all owners to be more competitive.
If the theory is true that winning = profit, then the only thing that this will do is force owners to go out and sign the best players.
The other side is that teams that used to lose out on this deal will be bolstered…but again, if the cap remained in place, this should not matter. There didn’t seem to be any mandate that says a team must spend the money it receives in revenue sharing —other than to meet the salary floor. Seems to me that any team receiving money should be breaking exactly even each year.
not worried yet
we are going to hear a lot of claims, some frightening and some that make us excited for improvements to the league, but in the end we should take it all with a grain of salt. This is going to be a very public negotiation process as both sides are going to be duking this out no holds barred. The NFL is one of the premier industries in the U.S., its going to be messy.
"you just have to know there's always going to be adversity. None of these games are going to be easy. Nothing will be given to us" - Paul Posluszny
Guys. Seriously. You can get off the ledge. This was 100M dollars spread over 9 teams. That’s only 11.1M dollars for each of those teams, presuming Buffalo was one of them.
There is still over 6 BILLION DOLLARS in revenue sharing going on next year. Billion – with a B. Here’s Peter King’s Twitter Take:
Teams will still share about $6 billion in rev. it’s a shot across the bow to players, who will seek to get NFL’s intentions overturned.
"Play like hell and win." - Perry Fewell
Your daily source for Buffalo Bills information.
Good to hear. Thanks for the update, Matt.
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by TheAfghanTwilight on Dec 7, 2009 7:08 AM EST up reply actions
Even more uncapped year stuff in today’s web rumblings.
"Play like hell and win." - Perry Fewell
Your daily source for Buffalo Bills information.
by MattRichWarren on Dec 7, 2009 7:30 AM EST up reply actions


















