NFL Lockout: Who Is Winning The PR War?
Now, you might be asking yourself, why is a college site focusing on the problems of a professional league? Certainly, this is not CGB's main mission, but I think this situation is still relevant to Cal fans. Former Bears and current NFL superstars, such as DeSean Jackson and Aaron Rodgers might lose out on opportunities to play. Current Bears, such as Cameron Jordan, Mike Mohamed, and Shane Vereen, might find their professional career stopped before it even started. So, the impending lockout definitely is relevant to the Golden Bear fans who frequent this site, even if they don't have any particular NFL feelings.
I wanted to focus on the PR war. This is an incredibly complicated matter. Ask 10 different people what the labor issues are and you'll get 10 different answers with 10 different biases. I'll put my bias right out and note that I am, in general, in favor of the union/labor here. The problems here are essentially that the NFL does not like the deal with the Union they entered into in 2006. They are trying to get out of it, because they want more money. So, they go to the players to ask for the players to give up money, claiming that the NFL teams are hurting financially. The NFL Players Association (union) says prove it, show us the financial statements. The NFL says "Hell To Da Naw!" Since the teams refuse to prove that they are hurting, it leads me to believe that they are not negotiating in good faith. Thus, I side with the NFLPA.
However, that is just me. And I am not necessarily here today to talk about who is right and who is wrong. I want to talk more about who will be perceived to be right and who will be perceived to be wrong. This situation is somewhat similar to the Tree-Sitter lawsuit, insomuch as the PR war was so ridiculously divorced from the legal proceedings. Right and wrong there legally mattered nothing compared to the perception of right and wrong. So, let's take a closer look at the opening salvos in the PR war. After the jump, join me as we discuss the competing PR attacks by the NFL and the NFLPA.
First, let's look at the NFL's initial blast. When I got home Friday night (the day that the CBA expired and the NFLPA sued the NFL), I had received an email blast from "Roger Goodell." The NFL has an advantage in that it has emailing lists to blast out messages to its fans. I predict there are millions and millions of people who they can easily reach. This is a distinct advantage that the NFLPA does not have. Here is the letter that I received:
Dear NFL Fan,
When I wrote to you last on behalf of the NFL, we promised you that we would work tirelessly to find a collectively bargained solution to our differences with the players’ union. Subsequent to that letter to you, we agreed that the fastest way to a fair agreement was for everyone to work together through a mediation process. For the last three weeks I have personally attended every session of mediation, which is a process our clubs sincerely believe in.
Unfortunately, I have to tell you that earlier today the players’ union walked away from mediation and collective bargaining and has initiated litigation against the clubs. In an effort to get a fair agreement now, our clubs offered a deal today that, among other things, was designed to have no adverse financial impact on veteran players in the early years, and would have met the players’ financial demands in the latter years of the agreement.
The proposal we made included an offer to narrow the player compensation gap that existed in the negotiations by splitting the difference; guarantee a reallocation of savings from first-round rookies to veterans and retirees without negatively affecting compensation for rounds 2-7; no compensation reduction for veterans; implement new year-round health and safety rules; retain the current 16-4 season format for at least two years with any subsequent changes subject to the approval of the league and union; and establish a new legacy fund for retired players ($82 million contributed by the owners over the next two years).
It was a deal that offered compromise, and would have ensured the well-being of our players and guaranteed the long-term future for the fans of the great game we all love so much. It was a deal where everyone would prosper.
We remain committed to collective bargaining and the federal mediation process until an agreement is reached, and call on the union to return to negotiations immediately. NFL players, clubs, and fans want an agreement. The only place it can be reached is at the bargaining table.
While we are disappointed with the union’s actions, we remain steadfastly committed to reaching an agreement that serves the best interest of NFL players, clubs and fans, and thank you for your continued support of our league. First and foremost it is your passion for the game that drives us all, and we will not lose sight of this as we continue to work for a deal that works for everyone.
Yours,
Roger Goodell
As I stated previously, I approached this letter in a very skeptical manner. There is a lot of bla bla bla, but the first thing I noticed was they tried to paint themselves as the hard working guys while the union walked away. I was skeptical of this claim and dismissed it immediately. However, I have been following this case very closely over the last several months and knew that the NFL hasn't been trying that hard. I knew they had been condescending towards the NFLPA. I knew they had cancelled negotiation meetings at the last second. I knew they had just been slapped by the Court for trying to negotiate a lockout fund years ago with TV networks, indicating that they actively wanted a lock out.
Of course, that is me. Not everybody is as insanely focused on the legal issues in this case. For the average fan, who is focused on March Madness and hasn't thought of the NFL since the Superbowl, I think this is an extremely appealing statement. "We worked hard, they walked away." Very reasonable. Then, they note that the union initiated a lawsuit. This is 100% accurate. Of course, in America people hate litigiousness. It only adds to the NFL's argument that the NFLPA was not trying to get a deal and wants to sue for more money. Greed, greed, greed, greed, greed.
Then, they go through their last offer. The one that the NFLPA spurned. Read through the deal again:
The proposal we made included an offer to narrow the player compensation gap that existed in the negotiations by splitting the difference; guarantee a reallocation of savings from first-round rookies to veterans and retirees without negatively affecting compensation for rounds 2-7; no compensation reduction for veterans; implement new year-round health and safety rules; retain the current 16-4 season format for at least two years with any subsequent changes subject to the approval of the league and union; and establish a new legacy fund for retired players ($82 million contributed by the owners over the next two years).
As I read through this, even with my pro-labor stance, I started to feel differently. This seems so reasonable. Splitting the difference. That sounds fair. Reallocation of savings from rookies to veterans/retirees without affecting rounds 2-7. That sounds a little confusing, but basically they are going to pay Round 1 superstars less money and give it to the veterans (which was a big issue here). Ok, hurts those Round 1 superstars, but still it seems fair. And weren't they getting paid way too much anyway?
The rest of it seems so nice and reasonable. No 18 games schedule. Health and safety rules. Legacy fund for retired players. Take this at face value and it is stunning that the NFLPA could reject it. Or at least that is what one might think reading this letter. It is a perfect opening salvo for the NFL. They state they offered an amazing deal and the NFLPA just flat turned it down and went to us big bad lawyers. Who could like lawyers?? And those who associate with lawyers???
Now, I never received any similar matching email from the NFLPA. I don't even know if the NFLPA has a mailing list. I doubt I am alone in receiving only one side to the story. I read a lot of stories on various SBN sites and elsewise about the lockout. I went down to read the comments to see what the average fans were saying. They were saying things akin to "I used to be for the union, but now with this rejection of a very reasonable offer, I am leaning towards the NFL." This is all very anecdotal, of course, but it was similar to how I was starting to feel. Was the NFLPA acting unreasonable? Why did they reject this on its face reasonable deal?
I had to do some searching, because the answers did not come easily. The fact that the answers did not come easily indicate the advantage that the NFL has here. At ProFootballTalk.com, I found a listing of reasons why the NFLPA decided to reject the offer and decertify. Here you go:
"The NFL demanded a multi-billion dollar giveback and refused to provide any legitimate financial information to justify it.
The NFL’s offer on March 7 to give the NFLPA a single sheet of numbers was NOT financial disclosure. The players’ accountants and bankers advised that the "offered" information was meaningless: only two numbers for each year.
The NFL wanted to turn the clock back on player compensation by four years, moving them back to where they were in 2007.
The NFL offered no proposal at all for long-term share of revenues.
NFL demanded 100% of all revenues which went above unrealistically low projections for the first four years.
The NFL refused to meet the players on significant changes to in-season, off-season or pre-season health and safety rules.
The NFL kept on the table its hypocritical demand for an 18-game season, despite its public claims to be working toward improving the heath and safety of players.
The NFL wanted cutbacks in payer workers’ compensation benefits for injured players.
The NFL sought to limit rookie compensation long after they become veterans — into players’ fourth and fifth years
THE PLAYERS WANT TO KEEP PLAYING
The players offered repeatedly to continue working under the existing CBA, but were rejected by the NFL five times.
Despite publicly admitting no club was losing money, that TV ratings, sponsorship money, etc. were at an all time high, the NFL continued to insist on an 18-percent rollback in the players’ share of revenues and continue to deny the NFLPA’s request for justification."
The most important aspect to this situation is, in my view, at the start and end of the list. The NFL continued to refuse to provide genuine information. Notice the offer from the NFL. Nowhere does it state that they will open the books. Further, at the end it notes that the players are happy to continue working under the current CBA. The players are being pushed around here by the NFL which refuses to show its work. The NFL offer might seem reasonable on its face, but it doesn't seem to even include any proposals regarding key aspects important to the NFLPA. There are some other disagreements on issues, such as whether there is a strong health/safety program. The language here by both sides is too vague to provide a meaningful analysis regarding whether the proposed health/safety programs are sufficient.
The problem for the NFLPA is that that is secondary. The NFLPA is focusing on the financial statements. The NFLPA is focused on the NFL proving that they are really losing money under the current deal. The average fan isn't going to really focus that much on it. If the NFLPA makes this about money, it's the old "Millionaires v. Billionaires" battle that hurt the NHL and MLB Players Associations (and will hurt the NBA Union soon enough). The NFL wins when its like that, because if people don't strongly take the side of the NFLPA, then the NFL wins.
The NFLPA would be better suited on focusing on the health/safety program. There has been a lot of news about injuries, concussions, early onset dementia and other health problems associated with playing football. People are genuinely concerned about the players as human beings. Us Cal fans just have to go back to the Oregon State 2009 game to remember how sickening it felt to see Jahvid Best laying there lifeless in the endzone. Americans will cotton to that idea and support the NFLPA if it can focus things on the health/safety aspects.
There is one final aspect to this that should be discussed. Cal alum and Yahoo! sportswriter Michael Silver wrote another article regarding the lockout. His work has been exemplary on this matter. Of course, every writer is going to approach the story with their biases. I saw Michael Silver enjoying pre-game beers with a few Cal football players and former Cal player and Superbowl champ Scott Fujita before the Cal-Stanford men's basketball game. Michael Silver is probably going to come from a pro-labor stance. This is, of course, not inappropriate. People come to read his work for his expert opinion on this matter, not to be a mere reciter of objective facts. Let's see what he has to say:
So now it’s a legal matter, and we’ll find out over the coming months whether Smith’s power play was inspired or ill-advised. As the situation plays out, we’ll hear all sorts of charges and accusations about which side made what proposal, which negotiators were sincere and which ones were unreasonable, and who deserves the bulk of the blame. Having communicated with people in each camp on Friday, I’m still totally confused about many elements of the owners’ final offer and why it took so long for it to be presented.
It is a very good article and it was difficult for me to find a key excerpt that really gave an overall perspective. I think that that paragraph is key here, especially the bolded area. If you read the article, it basically illustrates a NFL that shows no urgency in resolving the matter. It illustrates a NFL that blows off the NFLPA repeatedly and then at the last minute drops this on its face reasonable offer that might not be as reasonable if you dig deeper. The fact that the NFL hadn't really been close to its final offer and then just made a massive jump at the last second can be interpreted two ways:
1. The NFL was genuinely desperate to make a deal and really meant its offer.
2. The NFL wanted to have a strong PR hand and so it made an offer it knew that the NFLPA would never accept at the last second.
I lean towards the second aspect here. I think that the offer delineated by Roger Goodell's letter was not a genuine offer, but instead a tactic. I think it is going to work. I think the NFL's institutional advantages and ability to make fans tune out to the NFLPA's arguments will be strong. Now, the Brady et al lawsuit still could be disastrous for the NFL. But the NFL is hoping that the public will put pressure on the NFLPA to "stop the madness" and put the NFLPA in a weakened negotiation position. The NFL will seem like the reasonable actor, while the NFLPA pounds its chest about items that the average fan is not that interested in.
There is a lot more legalese to discuss here, but that is for an other time. I ask you, dear reader, what are your thoughts on the PR war?
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Generally I side with the owners
because generally they want to implement things like salary caps and more revenue sharing to help make the league more competitive. An excellent example would be the 1994 MLB work stoppage . . . I blame the players to this day to the Yankees ridiculous 200+ million dollar payroll. If the owners had been able to implement a salary cap, perhaps there would be more parity in that league (this is coming from a fan of a team that is consistently in the top 10 and often top 5 in team payroll). The NFL, on the other hand is a communist system with complete TV revenue sharing and a hard salary cap . . . is there anything more the NFL can do to create more parity? Hell no. Just split the money already . . .
CALIFORNIA ANGELS . . . ANAHEIM DUCKS . . . CALIFORNIA GOLDEN BEARS
Generally I side with the players
Because they’re the ones risking life and limb, bashing their brains together for my entertainment.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 9:41 AM PDT up reply actions
Playing devil’s advocate here because I don’t really know where I stand… but players do have a choice on whether or not to bash their brains in. These are the same folks who also choose not to finish their college education for a shot at glory.
Fire Starkey. You... complete me.
Nobody’s arguing that they have the choice. My point is, it’s the players that I find entertaining. What are the owners doing for me besides opening up the checkbook and then raking in the profits? The players are the ones creating value, so I have no problem with them getting a bigger share of the profits.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 12:01 PM PDT up reply actions
I’m ok with more distributed revenue sharing, as long as it doesn’t go into more “50 million guaranteed” draft contracts
"Remember the Maine! TO HELL WITH STANFORD!"
by CruzinBears on Mar 14, 2011 12:38 PM PDT up reply actions
sounds like you would sign with the players in this particular issue
like you said, the NFL already has major revenue sharing and parity is pretty damned high for a professional sport. Since all this is already in place, all that’s left is to “split the money,” as you put it. That’s what the players want more of. The owners are the ones who are saying that they need more money, that their teams are in financial hardship. The players, I think, want a fairer piece of the pie.
CGB: Wasting Your Potential, Your Time, & Your Life Since 2006.
The question TnH is asking though
isn’t who you side with, but which side is doing the better job in presenting it’s case – and here, I think its the owners. Odd to get the working man to sympathize with the billionaires (as opposed to the millionaires) but that just shows what a poor job the NFLPA is doing in getting it’s message out.
Excellent article TnH. See, you really can string two sentences together.
I don’t see how the league is winning this at all…or maybe it’s because I’ve been reading up on this as much as I can, but to me this boils down to what the players have been saying. That is – the owners are crying poor saying they’re losing money, but aren’t willing to be completely transparent about it. And If I’m the head of a union being asked to give back a huge amount of money, I want to know EVERYTHING I can before I cut a check for 325 million a year.
Proud to hold season tickets to the only NBA team owned by a Russian oligarch.
Hard to judge this one in a vacuum
Given what’s been going on politically in Wisconsin, Michigan, and much of the rest of the Midwest, it’s very difficult—at least for me (and Dave Zinn)—to not see the lockout as another example of greedy billionaires making exaggerated claims of a fiscal emergency to justify a war against working people and the unions that represent them. (And yes, I do see multi-millionare professional athletes as “working people” who need and deserve the protections that only a union can provide.)
I’m sure there are others, though, who just as strongly side with the NFL owners as a reflection of their support for the likes of union-busting Wisconsin Governor Walker. But in both cases, they’re wrong. :-)
Go Bears!
by California Pete on Mar 14, 2011 7:38 AM PDT reply actions
P.S. Last month, Dave Zinn also called out Aaron Rodgers for not taking a public stance on the political upheaval in Wisconsin, in contrast to many of his teammates (e.g., Charles Woodson). I love Rodgers, and I wouldn’t want him or any other public personality to take a stance that he doesn’t sincerely believe in, but I agree with Zinn. This issue is far too big, and silence just isn’t an option. Whose side are you on, Aaron?
Go Bears!
by California Pete on Mar 14, 2011 7:45 AM PDT up reply actions
Well, he’s still better than the famously apolitical Michael Jordan. He never took a stand on anything, because he said that “Republicans buy shoes, too.” So…
Proud to hold season tickets to the only NBA team owned by a Russian oligarch.
by yellow fever on Mar 14, 2011 7:48 AM PDT up reply actions
California Pete, thank you for your comments. Just wanted to remind you that this post is about the NFL lockout PR war in specific and the NFL Lockout more generally. Political discussion is generally not allowed on the front page, because it can turn into a divisive flame war quickly, something we try to avoid at CGB. This is especially true for a situation as explosively complicated as the Wisconsin situation. Thank you for your understanding of this matter.
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You’re right, Twist. I wasn’t really intending to make a political stand here, but simply wanted to say that it’s very hard to separate the PR war regarding the lockout from the national political context in which it’s unfolding. I, for one, wouldn’t be nearly as passionately sympathetic with the players if this lockout had occurred, say, last year.
I certainly have no intention of starting a flame war. To that end, while I’ve showed my cards above, this is just my opinion, and I fully respect (if disagree with) anyone who holds the opposing views on the lockout, Wisconsin, etc.. And that will be the last I post about these issues here.
Go Bears!
by California Pete on Mar 14, 2011 8:11 AM PDT up reply actions
What do you think the NFLPA could do to better accomplish its PR goals?
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My old favorite morning show in DC...
…is the Sports Junkies on 106.7 – four guys who are basically just donks who happen to have good rapport on the radio. They actually broadcast their show FROM the offices of the NFLPA last Thursday and Friday, and had prolonged segments talking with Dee Smith and George Attallah of the NFPLA, plus some players like Dominique Fox and Drew Brees who are a big part of the player negotiating team. Probably not the widest possible forum to go to, but the podcast segments are out there if anybody wants to hear some straight-from-the-horse’s-mouth content from the players’ side of things.
Now, my legal experience is limited to one summer of running documents back and forth on a massive malpractice case in Birmingham, so there are other better lawyas than me that can rule on this, but the takeaway I get from the NFL is that the last-minute offer and publicity push is DIRECTLY tied to Judge Doty’s findings regarding the TV contract and the presumed lockout fund. It seems to me that with the NFLPA decertified as sole bargaining agent for the players, this sets the stage for a pretty open-and-shut finding of collusion and bad faith on the part of the NFL.
I think the (former) NFLPA’s best option is to point to the NBA. The NBA is in dire shape, half the clubs are losing money, several want to move, one is owned by the league and could be contracted – and they’re completely transparent about the situation. Nobody is going to be surprised when the NBA lockout comes, because it’s a matter of record that they’re in horrible financial straits. By contrast, the general impression from available data is that the NFL is essentially a giant cash machine, with ratings, attendance and viewing figures growing every year. If the sport and the size of the pie is growing, a billion-dollar clawback becomes impossible to justify on grounds of financial distress, especially when teams have 30-year waiting lists for season tickets or are opening Death Star-sized stadiums like the Palace of Jerry.
For the players, the mantra needs to be “We want to play. We don’t want anything more than what we already had. We’re willing to do our part to help with the league’s financial issues - just show us all what they are.”
"Well, if that ain't a show, I'll kiss your ass." - Gov. Jim Folsom Sr. (D-AL), 1948-52
The point you are making about the NBA is a good one. The NBA is very transparent here. But the NFL is claiming poverty, but not showing anything. If they actually had a team that was poor, youd think theyd be able to wave it all around for people to see.
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But these aren’t public companies (except GB). They should not have to waive around their financials for people to see. In fact, it is opening these organization up to a lot of risk by discloing their financials. As we all know about pro sports, the money you make and can give is a huge part of what makes a club competitive/not competitive.
I mean if you were in a negotiation to buy a house, the stupidest thing to do would be to give over your financial statements to your seller or buyer. “I have $100K in my savings account and my bank is willing to lend me $500k. But I only want to pay you $250k.” It would actually be pretty stupid for the owners to disclose that in a negotiation.
Fire Starkey. You... complete me.
They dont have to show it to you and I. We’re not asking for it. I mean wave it around to the NFLPA.
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Right but regarding my second point, it’s still dumb in a financial negotiation to disclose your financials. I mean Drew Brees should man up then and show his financials and show his need.
Fire Starkey. You... complete me.
By the way, I don’t actually have a stake in this. But given the results of the poll here, I don’t think the NFLPA is in any danger of being the David to the NFL’s Goliath. There is no sympathy on either side.
Fire Starkey. You... complete me.
The poll is not about who is right and who is wrong, but who is winning the PR war.
So, if I understand you correctly, you think it is OK for the NFL to demand 18% giveback claiming poverty, but then not have to in any way prove said poverty?
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Yes.
And are you saying that in a financial negotiation you would show someone details of your financials? If so, why?
Also, have the owners actually claimed “poverty.” Because if the owners never said it, then you’re making an editorial comment, showing just how well the NFLPA is playing this game.
Fire Starkey. You... complete me.
the owners have said
that the ‘stadium renovation and construction fund’ needs more $. they want an additional billion from the Shared revenue pot to go into it before each teams salary cap is calculated. and the reason given is that the teams don’t make enough $ right now to fund stadium work. So, rather than have to disclose to the nflpa that they all pay numerous ‘special consultants’ (i.e., illigitamate children of owners, and hookers) fat salaries they are saying no.
Go Bears Go
by Rocksanddirt on Mar 14, 2011 12:39 PM PDT up reply actions
Interesting. Okay not “poverty” but something closer to ‘need." But anyways, my main point is, I don’t think the NFL should have to show anything they don’t want to. Really, so what if the Owners can afford to pay the 60% share? I mean it seems to me what’s happening is that in 2006, Upshaw negotiated a sweetheart deal for the Players. Owners didn’t like it and are not trying to negotiate Employee Wages & Benefits down to a level that’s more in line with other service-based for-profit industries.
Fire Starkey. You... complete me.
Thats exactly what is happening. The NFL made a deal in 2006 that they are now backing out on. I’m happy we can agree!
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But since that 2006 agreement is expired/ing, shouldn’t they be able to re-negotiate it to a level that more reflective of their interests today?
Fire Starkey. You... complete me.
The current Collective Bargaining Agreement, initially negotiated in 1993, has been extended on several occasions, most recently in March 2006. The 2006 extension, which could have continued through the 2012 season, gave both the NFL and the NFLPA an option to shorten the deal by one or two years.
NFL clubs today voted unanimously to exercise that option and to continue negotiating a new agreement for the 2011 season and beyond that will work better for both the clubs and the players.
The NFL clubs voted to opt out of it. It was supposed to go to 2012.
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OK, they voted out of the contract, but that option was part of the contract, so they are not acting in bad faith by opening up negotiations at a time when they feel like the current deal is to their disadvantage. That the contract could have continued in place as currently constituted is immatterial to since1997’s argument.
So, basically, you gotta Go Bears!
Well, I’m clarifying that the agreement isn’t expiring as in a natural course of time. The NFL has actively decided to back out on the deal. They had the option to do so written into the agreement, so it is not a breach of the contract. So, what they are doing isn’t flat out illegal. That’s a positive, I guess!
Merely because it is legal does not mean I will agree that it should have been done. They opted out just 2 years after agreeing. Did things change that much from 2006-2008? I know that the economy in general cratered, but the NFL is stronger and more powerful than ever.
Further, even if the act of backing out is not necessarily negotiating in bad faith, they’ve made a variety of other actions that indicate bad faith to me.
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They are not “backing out of the deal.” They are exercising one of the rights they were given as part of the deal. They are choosing to enforce the deal in one of the manners specifically permitted by the deal.
I have accepted Twist's unconditional surrender.
So, it’s not a breach of the contract. Bully for them!
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If the union did not want the owners to have a right to re-open the 2006 collective bargaining agreement, they should not have agreed to include that provision in the agreement. No doubt, the union traded the re-opener clause for some other benefit or provision it wanted in the 2006 agreement. So the union got something it wanted in exchange for the re-opener, and it knew full well that if the owners wanted a re-opener clause, that meant the owners were contemplating re-opening the agreement in 2011. It’s not a good guy vs. bad guy situation. It’s two powerful groups each trying to get the better of the other.
I have accepted Twist's unconditional surrender.
I generally support the NFLPA and am happy to do what I can to help it “play this game.”
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As a matter of federal labor law, if an employer tells a union that it lacks the ability to pay to wages, benefits or other costs proposed by the union, then the employer is required by law to open its financial records to the union for inspection. So employers almost never plead “poverty” or “inability to pay.” Instead, they talk in terms of “remaining competitive” or “setting priorities.” But, if the owners ever did plead poverty, they would be required to open their books. Of course, once the union is decertified, the owners have no legal duty to bargain at all, to act in good faith, to open their books, or have anything at all to do with the union, since the union will no longer represent the players.
I have accepted Twist's unconditional surrender.
while it may be dumb in some situations...
it’s also a neccessary evil in others.
Go Bears Go
by Rocksanddirt on Mar 14, 2011 12:35 PM PDT up reply actions
If you make a claim, and the other side asks you for proof and you refuse to give it,
then they are eminently justified in treating that claim as bullshit (I think the term of art is “puffery”).
Which is exactly what the NFLPA is doing.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Everytime someone brings up Drew Brees as an example of how the players are already millionaires, the NFL wins a little bit more of the PR war. The NFLPA does not exist for Brees or Peyton Manning; they don’t need a union to command mutli-million dollar salaries. The union exists for the guys who will only ever sign their rookie contract, the guys who will be in and out of the league in a couple years, the guys who will suffer years of poor health because of injuries sustained when they were 24.
However, the union is only successful if the multimillionaire quarterbacks stand with them. I understand why the union feels its necessary that its leaders be the recognizable faces of NFL QBs, but the public needs to understand that the NFLPA is more about the guys they don’t recognize and will have forgotten about in a couple years (if they ever even learn their names in the first place). To the extent that the public doesn’t get this, the NFLPA has failed here.
So, basically, you gotta Go Bears!
by ragnarok on Mar 14, 2011 1:25 PM PDT up reply actions 4 recs
This.
Saw a really interesting video article online last week about a young Giants lineman whose family has moved back home to the Midwest for the offseason, to live with his and his wife’s parents(in an alternating pattern). Even during this past season, they kept cutting costs, trimming theur budget, trying to save what they could, not knowing where that next paycheck would come from once the season ended.
It’s a really important thing for people to remember – bravo to ragnarok for bringing it up, and yes, it’s an extremely important tool for the NFLPA in this PR war.
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They could approach it adversarially as buyers and sellers, or they could approach it as partners. Aren’t they all producers of the good known as NFL Football that gets sold to millions of consumers every year?
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 12:18 PM PDT up reply actions
But okay your main point is, can’t they just hold hands and sing this away? Haha, I’m being an asshole, sorry. :)
Anyways, I don’t think it’s realistic to expect partnership in an industry whose ethos is a competitive good vs evil. It’s no surprise that both sides are taking such an adversarial stance. Maybe they should get the cheerleaders to negotiate…?
Fire Starkey. You... complete me.
No, I’m not saying that. There are obviously many incentives for the owners and the players’ union to act in an adversarial manner. They are dividing up the pie, after all. On the other hand, an extended lockout that impacts the next season could do serious harm to the bottom line, so taking a hard line might hurt both parties.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 5:36 PM PDT up reply actions
What can the NFLPA do PR-wise?
I can only speak to what the players can do to maintain the sympathies of someone like myself, who because of the national political context, had me at “Hello.”
The more the players represent themselves as hard-working young men, many of whom are from humble economic backgrounds, putting their bodies on the line in order to make the most of a very limited window of time that they have to practice their trade, the more I’ll sympathize with them. The more it appears that they’re just a bunch of multi-millionaires engaged in a greedy squabble with other economically privileged people, well then it becomes a lot more difficult to sympathize with them.
Go Bears!
by California Pete on Mar 14, 2011 10:25 AM PDT up reply actions
you just answered your own question.
The more the players represent themselves as hard-working young men, many of whom are from humble economic backgrounds, putting their bodies on the line in order to make the most of a very limited window of time that they have to practice their trade, the more I’ll sympathize with them.
CGB: Wasting Your Potential, Your Time, & Your Life Since 2006.
Super interesting read TnH. To answer the question, the PA is winning the PR battle. Despite Roger Goodell’s access to a mailing list, at the end of the day, little boys (and to a lesser extent girls) grew up idolizing Troy Aikman, not Jerry Jones.
But as a capitalist and finance person, it’s a bit strange to me that the players get a larger share (60%) of revenue than the folks who put down the money and made the initial investment to make game day happen in the first place. The Owners, by virtue of their necessarily large investment, has the right to run its business as it pleases. If your poppa invested all of his savings into a sandwich shop and his workers got 60% of revenues in year 1, and in year 2 poppa only wants to pay 40% of revenues (of a larger pie than year 1), then the worker should be able to just accept it or quit.
Still, as a fan, this sucks. I’m always going to be on the side of my heroes, and that’s why I think the PA is still winning here.
Fire Starkey. You... complete me.
the worker should be able to just accept it or quit.
What exactly do you think the players are doing? They’re saying “we won’t work for the conditions you’re offering.” The NFL responded by, in effect, laying them all off.
You appear to be confusing management rights (hire/fire authority, control over finances, etc.) with dictatorial power. Arbitrarily setting your workers’ wages at whatever rate you choose is (thankfully!) not a “right” possessed by business owners, and has not been at least since wage labor replaced servitude in the 19th century.
I’m also rather confused by the use of 50% of revenues as some kind of lodestone, since it is easily possible to conceive of a business (let’s call it “Safeway”) in which the overwhelming majority of revenues go to labor and other overheads and the owners receive an extremely minute fraction of total revenues as profits.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Good point re: revenue sharing
Current revenue sharing
Average per player share = 60% * 1 player / 53 players/32 teams = 0.035%
Average per owner share = 40% * 1 owner / 32 teams = 1.25%
If you drop that to 50/50
Average per player share = 50% * 1 player / 53 players/32 teams = 0.029%
Average per owner share = 50% * 1 owner / 32 teams = 1.56%
So, even going to the owner’s 50/50 proposal on blind adherence to the owner’s stated need for the increase, owner shares would go up 24.8% and player shares would go down 17.1%. It’s not a small amount of money we’re talking about here.
"I wish him nothing but pain in his silly travels especially if they wind up in my octagon. Clearly I have defeated this earthworm with my words — imagine what I would have done with my fire breathing fists."
What exactly do you think the players are doing? They’re saying "we won’t work for the conditions you’re offering." The NFL responded by, in effect, laying them all off.
Right. I agree.
I’m also rather confused by the use of 50% of revenues as some kind of lodestone, since it is easily possible to conceive of a business (let’s call it "Safeway") in which the overwhelming majority of revenues go to labor and other overheads and the owners receive an extremely minute fraction of total revenues as profits.
Safeway: appx 26% of revenues is paid in SG&A (the “people” part). So less than half of 60%. But even then, I’ll give you the benefit of the doubt and say you’re not in the business of analyzing companies, so a more analogous industry would be service-based models like finance or law. For a typical Ibanker, your compensation relative to the revenue you bring in should be about 40%—which you then parcel out to your team. I’m saying 50-60% is huge b/c of the amortized and cash costs associated with your initial investment (eg. depreciation expenses, op & maintenance, and prin + interest).
Fire Starkey. You... complete me.
in environmental consulting
about 75 to 80% is labor.
20% is other stuff.
Go Bears Go
by Rocksanddirt on Mar 14, 2011 12:42 PM PDT up reply actions
Can you give me an example of a public environmental company? I’m gonna look that up. 20% for “other stuff” that doesn’t including owners return on equity means they have RIDICULOUSLY low:
-Capitalization expenses (interest and depreciation)
-Professional fees (consulting eats up a TON of legal fees)
-Travel & Entertainment (sales based model that requires flying everyone around and taking a lot of people out for fancy dinners)
-Communications & Technology (bberries, plans, computers, etc)
Which could make sense if the company in question has no scale and there’s essentially one person working from home. This is not analogous to a billion-dollar multi-national with very high fixed costs (eg. capital expenses for stadiums).
Fire Starkey. You... complete me.
Tetra Tech, inc. (think is the name)
the environmental consluting end of that company (they do numerous other things), has no capital equipment, they provide ’professional services to others who have capital investments. They primarily do federal government environmental consulting (i.e., military base closures).
the only T&E sales costs are for lobbyests, as you can’t T&E civil servants. When we sub’ed to them any C&T was project based not company wide. (short sighted, imo, but let them bill the federales for all the C&T).
it is absolutely not the same as a sports team with a capital investment in land and facilities.
Go Bears Go
by Rocksanddirt on Mar 14, 2011 2:19 PM PDT up reply actions
Keep in mind that a proper return on equity should be about 20%. Otherwise, nothing would get done because the return of putting down your equity $$ would be too low for anyone to actually make the investment.
Also, taxes take off 35% of income after expenses. So you’re working with VERY little money here if you’re paying up to 80% in labor.
Fire Starkey. You... complete me.
yes.
there is NO $$ in environmental consulting except in so far as you use it drive capital investment work (see Bechtel).
Go Bears Go
by Rocksanddirt on Mar 14, 2011 2:19 PM PDT up reply actions
I’m neither an accountant nor a financial analyst, but I think there are limits to the value of applying conventional business metrics to the world of professional sports franchises.
Yes, the teams are private, for-profit ventures, and the owners reasonably expect to enjoy a significant return on their invested equity. But these are also “clubs” that, not unlike owning a garage of rare automobiles or a giant luxury yacht in the harbor at Monte Carlo, are collectible and tradable tokens of the super rich. Thus, much of the return on investment an owner can expect to earn comes in the form of capital appreciation that may not have a whole lot to do with the financial performance of the underlying business.
While I see the value of calculating a return on equity of these franchises, I’m not sold on the idea that we can really identify what a “proper” return would be.
Go Bears!
by California Pete on Mar 14, 2011 2:51 PM PDT up reply actions
I really respectfully disagree here, CP because as an Owner, you are on the hook for contractual payments on:
Player compensation agreements
Lease agreements and/or Debt agreements
Coaching/Administration comensation agreements
Vendor agreements
etc.
If your revenues come in less than expenses on these obligations, then that means you fork out the cash (or your LLC forks it out) yourself. You are on the hook. By SIGNIFICANT contrast, neither Leonardo Da Vinci or Mr Aston Martin is gonna come collecting from you after you purchase your painting or boat or whatever. This risk of loss is PRECISELY why equity owners require a higher return to go in.
Fire Starkey. You... complete me.
Sure, but I think his point was that even if the operating expenses barely broke even (which, I doubt they’re barely breaking even) these franchises are continually appreciating in value at quite a fast rate.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 5:47 PM PDT up reply actions
Yeah, but to be fair, you can’t eat appreciation. When I put together RE deals I never even mention appreciation, it’s all about cash on cash.
Am I known as Cugel the Clever for nothing?
By “I doubt they’re barely breaking even”, I meant that I suspect they are making large profits.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 8:54 PM PDT up reply actions
I don’t understand what you or CP are saying. What is your definition of “franchise appreciation”?
These are businesses. Unless you’re making profits that increase your equity position, the value of these franchises ARE NOT appreciating.
In fact, ticket revenue doesn’t even cover the cost of the Jags stadium. And they can’t get anyone to buy the naming rights to Everbank field. This franchsie certainly is NOT appreciating.
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The franchise is appreciating in that they could sell it for significantly more than they paid for it.
Yea i generally understand the concept of appreciation. But these aren’t like coins or paintings. Just like any business that would be sold, they would have to be valued and sold like a business. A franchise that is projecting expense growth at a rate higher than revenue growth would have a low discounted cash flow valuation and would potentially be sold at a low valuation, perhaps less than the amount originally paid for. What I don’t understand is why everyone just assumes that these franchises are so valuable given the revenue/cost structure. Look at the Greenbay reports online. It’s not a great picture.
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Because this goes way beyond simple business costs. Owning an NFL franchise is a luxury item that many, many people are willing to pay lots of money to own, regardless of future earning potential. And with a rather limited supply (32 franchises, many of which are firmly controlled by long term owners) that creates an artificially high demand
I’d be shocked if an owner ever sold a franchise for less than they bought it for.
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No. Please, let's use facts, not feelings
http://www.nytimes.com/2010/03/17/sports/17teams.html
Teams who lose money get sold for less than they were bought for. Look, i think the issue here is people think that owners are like Scrooge McDucks swimming in a bank vault of gold coins. In fact owners are more than likely conglomerates who are saddled with debt with stricter debt terms than usual and are now being required to put up personal guarantees for hundreds of millions of dollars of debt.
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None of those examples are NFL teams though, and the NFL is on vastly better financial footing than any other league.
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The St. Louis Rams are an NFL team. Also while not on the auction block, the Jags are in dire straits.
Plus, how are you so sure that the NFL is on such great financial footing? The Green Bay report sure doesn’t reflect making money hand over fist and I thought the NFL didn’t provide details.
Fire Starkey. You... complete me.
The St. Louis example in the article didn’t have anything to do with losing money – they just mentioned that the owner died, leading to a team sale.
As for why I don’t think the NFL is losing money? Well, for one thing there was a study released a while back (it was discussed in a DBD a few months back) that showed only 2 teams operating at a deficit. How can you lose money when you’ve got a ginormous TV deal and publicly funded stadiums (partially or otherwise)?
And if they were really losing money they’d probably open their books in some fashion to the players to prove why the labor deal needs to change.
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Okay, using Scootie’s Forbes article on franchise income: after you subtract interest, taxes, and debt service payments on their stadium debt:
-10 team have negative operations
-17 teams make less than $5mm
In an environment where costs are rising (including coaches and players salaries and benefits) at a faster rate than revenue growth, this is no fat cat league.
You’re right St. Louis Rams are making money. $12.7mill in 2010.
Teams that are not, after debt service and taxes :
Denver Broncos
Atlanta Falcons
Oakland Raiders
Carolina Panthers
Pittsburgh Steelers
Minnesota Vikings
Detroit Lions
Miami Dolphins
New York Giants
New York Jets
Fire Starkey. You... complete me.
Are we looking at the same link? The one I’m looking at lists Detroit and Miami as the only two teams with a negative operating income. I might be misinterpreting the data though.
The #1 greatest threat to America: BEARS
Yeah I added back interest, taxes and debt service. The operating income is EBITDA (earnings before interest taxes dep and amortization). I added back the debt service and taxes in order to show the actual net income of the teams since they do have to pay these obligations. I assumed 15-year principal repayment at 5% interest.
Fire Starkey. You... complete me.
Also, bear in mind that you’re talking about 1 year’s worth of data in the midst of a deep recession.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 10:07 PM PDT up reply actions
Also, the Charlotte example is like a worst case scenario: A team bought during decent financial times, but in a small market in a lower profile league compared to the NFL, then sold during the worst economic times, for less than a 10% loss on the buying price.
The #1 greatest threat to America: BEARS
I know what you’re saying Since, but I don’t buy the idea that sports franchises, particularly NFL franchises, follow normal business rules when it comes to valuations.
The last NFL franchise I can find that changed hands is the Vikings, in 2005 for $600M. According to Forbes, which does a franchise valuation annually, they lost money last year, and declined in value. Yet, they are still valued at $775M, more than 25% more than their purchase price five years ago. Details here.
Of course, that’s just conjecture, since they haven’t just changed hands for $775M, but Forbes is a pretty respected source in this area.
Here is the article written based on those Forbes valuations. Basically, the franchises dropped in value on 2010.
http://www.usatoday.com/sports/football/nfl/2010-08-25-nfl-franchise-values_N.htm
What is the valuation based on? Basic business valuation issues: no potential owners with enuf cash to put in, lack of debt options, revenue declines and the looming lockout. My basic point: these are businesses and are subject to the same rules as all other businesses with regards to valuation: Capital access and the principles of risk/reward.
Fire Starkey. You... complete me.
Maybe he’s the exception, but Jerry Jones reportedly purchased the Cowboys for $150 million and the franchise is now estimated to be worth nearly $2 billion. At least these are the numbers reported by Forbes. Now, that valuation no doubt reflects a belief that the Cowboys are highly profitable, but somehow I think most Cowboys fans—and probably Jones himself—would gladly trade in those profits for another Super Bowl trophy.
To bring the thread back to PR, just as the players probably don’t want the likes of Brady, Brees, and Manning, to be the face of the union, the owners would probably be well served if Jones wasn’t their face—plastic surgery and all.
Go Bears!
by California Pete on Mar 14, 2011 8:47 PM PDT up reply actions
What Scootie said.
I’m sure there’s some scholarship somewhere on this, but we’re dealing with entities whose value can’t be entirely boiled down to the usual metrics of balance sheets, profit-and-loss statements, and the like. I mean, what would you pay to own a piece of the Dallas Cowboys or the New York Yankees? Being the owner of such a cultural icon is not the same thing as owning shares of, even a controlling interest in, your typical corporation. These are iconic possessions that hold value to the owner—who are fans as well as business people—even if they’re losing money. Indeed, isn’t one of our prevailing pet peeves as fans of pro sports when the owners of our favorite teams act too much as profit-driven capitalists rather than executive partners of their coaches and players competing for a championship?
While conventional financial measures are very much relevant, and the financial risk of all that invested capital is real, I don’t think one can unproblematically apply conventional rules of thumb, such as an expected ROE of 20%. Owning a pro sports team is just different. Or at least it should be.
Go Bears!
by California Pete on Mar 14, 2011 8:25 PM PDT up reply actions
No, it’s not that different. In fact, if you ARE making an emotional decision to buy the Charlotte Bobcats, I would really advise you to refrain. Instead, do what Michael Jordan is doing and make a very level-headed decision to protect the wealth that you earned.
http://www.nytimes.com/2010/03/17/sports/17teams.html
Fire Starkey. You... complete me.
Is protecting wealth the sole goal of the wealthy? I sure hope not, because that would make charity a completely irrational, and “emotional” act.
Go Bears!
by California Pete on Mar 14, 2011 8:52 PM PDT up reply actions
What? Why are you talking about charity?
Okay I totally get the disconnect. Fans think owning a franchise is an act of charity or some sort of public service. It’s not. It’s a business decision.
Fire Starkey. You... complete me.
We’re definitely talking past each other. Owning a sports franchise is not an act of charity. Obviously. But purchasing a $100 million stake in a franchise is not your usual $100 million investment either, comparable to buying, say, $100 million of Apple Computer debt or equity.
While conventional investing presumably can be broken down to rational guidelines of expected risk and return, owning part of a team is at least partly an irrational, emotional act. And it’s an act that does carry with it responsibilities—in a social if not legal sense—to the fans that support the team. We’ve actually strayed quite far from the topic at hand—the labor dispute—but I and some others are simply questioning your assumptions that standard financial metrics can be unproblematically applied to this situation.
At a broader level I am disturbed by the assumption that capital/wealth exists for the one purpose and one purpose only: to multiply itself in the most rational way possible. (This was the point of the charity reference; Bill Gates must be a fool for giving away all that money since this puts a huge dent in his personal ROE.)
In the PR battle, owners quickly lose fans such as myself—who’ve “invested” a lot of their own time, emotional energy, and money at the ticket office and concession stand—when those owners appear to operate the franchises we love from the sole point of view of a return-maximizing capitalist rather than that of someone who wants to win championships and create a great experience for the fans. It’s not that I’m rooting for the owners to lose money, nor do I begrudge them getting a reasonable risk-adjusted return on their investment. But when you own a team, you DO have a responsibility to your fan base. And you do enjoy difficult-to-value perqs of being an owner. No, I don’t see owning a team to be a form of charity. But I do see owning a team to be an act of fanaticism as much as an act of business.
Go Bears!
by California Pete on Mar 14, 2011 9:30 PM PDT up reply actions
I agree. Owning a sports team is an investment, but it’s also taking a position of social responsibility in the civic life of whatever community your team is located in.
California Golden Bears: 2nd place is nothing to sneeze at!
by atomsareenough on Mar 14, 2011 10:08 PM PDT up reply actions
ROE of 20% is great, but it’s big. Lots of very “successful” companies operate on significantly less than that.
Let’s look at one of the tech world’s darlings, CRM. It’s software, so there’s no manufacturing cost, like a football franchise. They have significant capital expenditures in the infrastructure required to host their product, analogous to a stadium. Their stock has damn near doubled in the last year. It’s a billion dollar corporation, public for years, healthily growing revenues. Their ROE? Just under 6%.
Okay lets do this:
You’re making a buying decision of a franchise. You have $100 million. Franchise costs $100 million.
Your return on your $100 million is 6%. You would be on the hook to pay any losses out of pocket or maybe lose your investment. That is your equity risk
Or you can lend Apple Inc. $100 million at 6%. They’re investment grade so you will more than likely get paid back. AND you don’t take the risk of any losses that Apple Inc may/may not incur. 6% is about the debt return for investment grade companies.
In the capital stack, returns must correlate to the risk you’re taking:
Sr. Debt is lowest risk, hence lowest return at 4-8%.
Then junior debt at 8-12%
Then Mezz debt at 12-20%
Then preferred equity at 15-25%
Then senior equity at 20+%
So then why in the world would anyone take debt returns for equity risk? This is why a proper return on equity is so high.
Fire Starkey. You... complete me.
I fail to see why you're distinguishing one kind of overhead from another, since neither one is profit
But that’s just quibbling over the details of a bad analogy. All analogies to pro sports are bad, because pro sports is a sui generis industry.
The group of players who play for the NFL have literally irreplaceable talent. They are not even remotely comparable to lawyers or investment bankers, who, much as I like to flatter myself that I’m a uniquely awesome and smart individual, are easily replaceable with people who are comparably good.
I’m honestly not sure what you’re referring to with “depreciation expenses, op & maintenance, and prin + interest”, but if the first term of that is referring to stadiums, treating depreciation as a cost to the owner is rather laughable in light of the fact that most stadiums are essentially given to teams for free through taxes on the public.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Interesting. I’m going to google Green Bay’s financials to get a better sense of facts/reality. Let me get back to you.
I wonder what our discussion here says about who really is winning the PR battle. I think what it does say is that Cal fans may not be indicative of the general public since we’re so analytical.
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THIS
I think what it does say is that Cal fans may not be indicative of the general public since we’re so analytical.
Go Bears Go
by Rocksanddirt on Mar 14, 2011 2:20 PM PDT up reply actions
Haven’t finished my research but an already intersting tidbit:
In 1998, the Packers hired a consultant to develop plans to renovate Lambeau Field. The proposed $75.0 million project was expected to widen the concourse, increase the number of restrooms and concession stands, and establish two retail stores. In addition, a new press box, additional seating, and a stadium club were expected to be built. However, in March 1999, the Packers chose not to proceed with these planned renovations. Packers officials indicated that their plans were no longer viable because changing economics within the NFL would not allow the Packers to generate sufficient new revenue to remain competitive in the league.
Fire Starkey. You... complete me.
link
http://legis.wisconsin.gov/lab/reports/Green%20Bay%20Packers.pdf
Fire Starkey. You... complete me.
The problem is that the Packers are actually owned by the taxpayers in question
Unlike the vast majority of pro sports franchises, they can’t externalize their costs onto people who have no interest in football.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Okay… can you give me two examples of non-Greenbay Municipalities that have given their stadiums for free, and to which franchises? City/County finances are public record so you can backwards induct what the expenses are for a given franchise.
“Free” is also a misnomer since I will bet (but will verify with research) that the clubs pay an “operating lease expense” back to the Municipality instead of a “depreciation expense.” The difference is that the asset (the stadium) is actually on the books of the Muni when there is an operating lease expense. And when you have a depreciation expense, it means the asset is on the books of the franchise—ie. the franchise owns the asset. Essentially, the 49ers are the renters who are paying the mortgage through a lease agreement, but the County of SF took out the loan (probably through a bond issuance).
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Not exactly free, but relevant:
County tax paid for 3/4 of the Minnesota Twins’ new stadium:
http://minnesota.publicradio.org/display/web/2006/12/29/stadiumtax/
Miami Dolphins seek taxes from TWO counties to fund stadium renovation:
http://www.miamiherald.com/2011/01/05/2001882/dolphins-seek-cross-county-tax.html
Right here at home:
Santa Clara City Council Approves 49ers Stadium Hotel Tax
Economic study reports show the tax would likely generate $35 Million, which would go toward the stadium. An additional $79 Million of public contributions are earmarked for the project, and the team and the National Football League say they are putting in about $493 Million and the Santa Clara Stadium Authority is putting in about $330 Million.
It’s not totally free, but that is certainly the citizens of a given area forking out money for a professional sports franchise.
I sense that there may be more to the discussion that I’ve overlooked, so feel free to add or detract accordingly.
CGB: Wasting Your Potential, Your Time, & Your Life Since 2006.
I believe 2 of the 3 newish Houston stadiums were partially (mainly?) financed by convention taxes (hotels and rental cars)
As was Jerry Jones’s palace:
Originally estimated to cost $650 million, the stadium’s current construction cost was $1.15 billion,13 making it one of the most expensive sports venues ever built. To aid Cowboys owner and general manager Jerry Jones in paying the construction costs of the new stadium, Arlington voters approved the increase of the city’s sales tax by 0.5 percent, the hotel occupancy tax by 2 percent, and car rental tax by 5 percent. The City of Arlington provided over $325 million (including interest) in bonds as funding.
The #1 greatest threat to America: BEARS
The whole picture...
Minnesota Twins: Hennepin County raised 63% of the financing. Rest was from owners. The Twins are under a 30-year lease to pay back the city. So NO THIS IS NOT FREE MONEY
Miami Dolphins: SunLIfe stadium 90% privately financed. AGAIN, NOT FREE.
49ers: Not yet built. Not much info on the lease agreement b/w team and santa clara county.
SUMMARY: Counties sign up to build these stadiums for teams bc of future revenue. They do this by raising debt. Who pays back the debt? Partially a tax on hotel/tourisms in the vicinity who would benefit from the stadium plus lease payments from the team. AGAIN. NOT FREE MONEY. Counties provide upfront financing and owners kick in equity.
Fire Starkey. You... complete me.
Link
http://football.ballparks.com/NFL/
This will give you breakdowns of all the NFL stadia. WHo financed it and who;s on the hook to pay for renovations and paying back the debt.
Hint: Team is on the hook for A MAJORITY OF THESE EXPENSES.
Fire Starkey. You... complete me.
Okay, I can cherrypick examples too
Marlins ($300M spent by county). Yankees ($1.2B in taxpayer subsidies).
This is pointless without a systemic analysis (which, once you do it, will show that the substantial majority of expenditures on sports facilities are at taxpayer, not team, expense).
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
If I’m reading Wikipedia correctly, Qwest Field was financed entirely by the taxpayers:
The stadium was built between 2000 and 2002 after voters approved funding for the construction in a statewide election held on June 17, 1997.
Also, Jacksonville wasn’t 100% publicly, funded, but they still got a huge sum from taxpayers:
Total construction time was under 20 months and total cost was $134 million – $60 million of which was provided by the city of Jacksonville.
I’m sure there are others but I don’t really feel like wikipedia searching 32 stadiums.
The #1 greatest threat to America: BEARS
Are the Packers owned by the taxpayers, i.e., the government? I have always thought they were owned by numerous individual shareholders who chose to buy shares of the company.
I have accepted Twist's unconditional surrender.
They're owned by individual shareholders, but there are HEAVY restrictions on who can buy shares
It’s not publicly traded. You have to actually be a resident there; I cannot just go buy a share of the Packers (unlike the Boston Celtics, which are a true public corporation).
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Paul, interesting article on GreenBay. GB 2010 Financial Update
While I understand that they are owned by ~100,000 residents of GB, the franchise is still not a tax-payer owned entity. Some interesting excerpts:
The Green Bay Packers once again were profitable over the past fiscal year, but their operating profit dropped more than 50 percent from the previous year as the rising cost of player salaries continued to outpace revenue growth.
I think what may be at issue with Owners vs Players 2011, is that the financials WILL show a profit, which may be pointed to as proof that the Owners are lying about their ability to remain competitve. But, Owners also need to have high retained earnings in order invest in their stadia and perhaps have the dry powder to pull the trigger on a free agent or coach in order to remain competitive.
Fire Starkey. You... complete me.
those are true
but the $ they want to siphon off is to go to the league wide stadium fund, that teams can borrow from at attractive terms.
the free agent/coach issue is a bit more challenging unless you waste a lot of money in less productive operations (e.g., Raiders seat license program)
Go Bears Go
by Rocksanddirt on Mar 14, 2011 2:25 PM PDT up reply actions
i heard that the NFL stadium fund was kaput... true?
Just what i heard.
CGB: Wasting Your Potential, Your Time, & Your Life Since 2006.
sorry that last part was unclear...
what i meant was:
Even if Owners show a profit, the trend is also at issue here. Owners will be focused on the trend and the fear is that Players will be focused on the bottom-line 2011 profit. The fact that expenses are growing at a faster rate than revenues is just bad and I can see why Owners have made a conscious effort to just get this all figured out now.
Fire Starkey. You... complete me.
Very interesting, Since.
I was pro-players and anti-fat-cat owners, but this gives me pause.
As a small-business owner, it’s been tough the last few years. Business has been down 15-20% each year…so no bonuses or promotions. If my staff said, “Bullsh!t. We want you to open your books, prove to us that it’s down.” Well, I’d be inclined to fire them all.
However, the right/wrong part of this argument isn’t the issue at hand…it’s who is winning the PR battle. The fact that my knee-jerk reaction is to sympathize with the players suggests that they’re winning.
In some ways, I’m disturbed that I can be swayed so easily.
Even with all the facts at hand, the issue for me is that the NFL is not like a small business. They’re allowed to circumvent many of the rules/regulations that everyone else has to deal with. So, I’m not sure that they do have the right to run their business as they please. I don’t think it’s fair for them to have their cake and eat it to. If they don’t have to play by the rules as a business, then they get to deal w/ the consequences now when their employee’s union is ticked off.
I wish I were smarter so that this all made sense to me.
Old Toothwrangler
I want to also note that to state this is an employer/employee situation is moderately misleading. It is in a technical sense. The Texans employ Mario Williams. Got that. But the union, as a whole, is not the employee of the NFL. The Union is a partner to the NFL. They should be working together. Sharing information.
So, I don’t think it is analogous to your small business, no disrespect to your business intended.
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The union is a partner? Not really. Unless by partner you mean someone who has the right to have a share in deciding how to run your business, but has no responsibility for any losses you might suffer as a result of those decisions.
I have accepted Twist's unconditional surrender.
If the owners are losing money, it is going to affect the players. They arent going to want to pay large salaries, in that instance.
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By decertifying and threatening anti-trust litigation that, if successful, could end the system upon which the NFL is built, the union is essentially threatening to try to destroy the NFL. Even if that’s just a bluff, and even if one thinks it is justified, it indicates that owners and unions are not partners.
I have accepted Twist's unconditional surrender.
Yes, it is unfortunate that the NFLPA has been pushed to this point by the owners trying to “take back their league” as Jerry Richardson so eloquently put it. I’m sure they all wish they had other options. Unfortunately, it does not appear that they do. The NFL has made it clear that they either all take a 18% pay cut or be locked out.
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In my experience of labor negotiations, there is rarely a circumstance where one side is all good and just and reasonable and the other side is all evil and greedy and intransigent.
I have accepted Twist's unconditional surrender.
You are right, CalBear81. This truly is a rare circumstance! What history we live through.
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The National Labor Relations Act requires employers and unions to bargain in good faith over all mandatory subjects of bargaining to reach a new collective bargaining agreement. The Act does not require the parties to agree to any specific proposal or to make any concession. But it does require that the employer, in particular, be willing to consider union proposals in good faith, and to explore alternatives and/or make counter-proposals where appropriate. Whether an employer has bargained in “good faith” is looked at based on the totality of the employer’s conduct throughout the negotiations. Of course employer (and unions) often take strong positions during bargaining, and decline to alter them. Whether this is “bad faith” depends on whether the employer has a reasonable justification for taking such a position, and whether the employer is willing to be more flexible in other areas. One thing an employer cannot do is make a “take-it-or-leave-it” proposal on a key issue such as wages. The employer may refuse to increase its wage offer if it has a legitimate justification for doing so, and/or if it has shown willingness to genuinely explore other alternatives that will let it achieve its stated goals. If an employer were simply to say: agree to an 18% cut or be locked out, that would almost certainly be unlawful bad faith bargaining.
The union has the right to file an unfair labor practice charge with the National Labor Relations Board, if it believes the employer’s conduct constitutes bad faith bargaining. Of course, the employer will always be ready to come up with excuses and justifications for its actions, which may or may not satisfy the NLRB. But this is a remedy available when the union believes there is evidence of bad faith by the employer.
As I understand it, the players union did not choose to file any unfair labor practice charges against the NFL. Instead, it has chosen to decertify and threaten the destruction of the NFL. To me, this means: (1) the union does not believe there is sufficient evidence that the NFL has negotiated in bad faith to win before the NLRB; and/or (2) the union has decided its interests are better served by threatening the destruction of the NFL than by using the available legal procedures to try to achieve its ends. As I said before, this is about two powerful entities trying to get the better of each other.
I have accepted Twist's unconditional surrender.
This comment is so long, I am struggling to come up with a glib, trollish response. But I was doing so well for so long!
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Didn’t the Doty ruling essentially call out the NFL for operating in bad faith?
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As I understand it, that decision relates to whether certain actions by the NFL violated the existing contract, not to bad faith bargaining over a new agreement. The Special Master assigned to hear the evidence and make the initial decision had found no violation by the NFL, then the district court judge, Doty, reversed the Special Master’s decision and found that there were contract violations.
Under the National Labor Relations act, it is the National Labor Relations Board (NLRB), a federal administrative agency, which has exclusive jurisdiction to determine whether an employer is bargaining in bad faith. A federal judge like Doty has no authority to decide that issue. (A decision by the NLRB can ultimately be reviewed to a federal court of appeal, but a federal trial court judge like Doty would not have any authority to review the decision of the NLRB.) On the other hand, the NLRB does not have jurisdiction to interpret or enforce an existing collective bargaining agreement. That lies with the courts or, if specified in the agreement, an arbitrator. So there is a split of power: the NLRB has sole authority to determine whether the parties are bargaining in bad faith over a new collective bargaining agreement, while the courts (or an arbitrator) have sole authority to interpret and enforce an existing collective bargaining agreement.
Judge Doty has ruled that the NLRB violated the prior collective bargaining agreement by not sharing certain revenues with the players. But his decision does not, and cannot, cover whether the NFL has been bargaining in good faith for a new agreement.
If there is evidence that the NFL has flagrantly violated the prior agreement, the NLRB would probably find that relevant to the question of whether they are currently bargaining in bad faith. But the issue of whether or not the NFL has been bargaining in bad faith over a new agreement can only be raised if the union files an unfair labor practice charge with the NLRB, alleging bad faith bargaining by the NFL. And if the union decertifies, any obligation the NFL had to bargain with the union, in good faith or otherwise, will end.
If a union does file an unfair labor practice charge, and the NLRB determines that there is probable cause to believe that unfair labor practices (ULPs) have occurred, then the NLRB can go to a federal trial court and ask the judge to issue an injunction ordering the employer to take or refrain from taking certain actions, such as a lockout. I understand that some sort of proceeding is pending in court now regarding the lockout. But whether it is an action by the NLRB seeking to enjoin the lockout as a ULP, or whether it is an action by the union and/or players claiming that the lockout is a violation of the just terminated collective bargaining agreement, I do not know.
I have accepted Twist's unconditional surrender.
The union did not have this option. It is one of the rights that was given up in the CBA, and is one of the reasons why the CBA is governed by a federal judge. The CBA operates well outside normal labor laws, which is why decertification could be effective for the NFLPA.
Are you saying that the union expressly waived the right to file an unfair labor practice charge over bad faith bargaining for a new collective bargaining agreement? I have not researched that specific issue, but my gut reaction is that such a provision should be void as against public policy, since it would encourage bad faith bargaining and would also contravene federal labor law established by Congress. I suppose it’s possible, but it seems pretty shocking that the union would have agreed to it or that the courts and/or NLRB would uphold it.
I have accepted Twist's unconditional surrender.
If the union agreed to a contract with a re-opener and waived its right to file unfair labor practice charges over bad faith bargaining by the NFL, then they knowingly created the present situation in which their only alternative is decertification and lawsuits aimed at destroying the NFL, and my sympathy for their position is reduced to zero.
I have accepted Twist's unconditional surrender.
OTOH, if the owners knew that this was the union’s only option, then they must have known they were playing with fire if they pushed them into using it.
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by atomsareenough on Mar 14, 2011 10:10 PM PDT up reply actions
Rather than an unfair labor suit, I believe the players are instead suing under federal antitrust law. They are no longer a union, so they are suing as some sort of combined entity of private contractors, with Tom Brady listed (alphabetically) as the lead plaintiff.
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by California Pete on Mar 14, 2011 8:34 PM PDT up reply actions
They're not suing as any kind of entity
It’s a class action suit by a number of individual players, on behalf of the rest.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Filing a ULP charge would be of little purpose
The purpose of filing these sorts of failure-to-bargain charges is, as I understand it, typically so that any subsequent strike will be considered a “ULP strike” rather than an economic strike, thus guaranteeing that employees won’t be permanently replaced.
In this case, there is literally zero risk that the NFL players will be permanently replaced, because (as I already pointed out) they are just not replaceable. The outcome of ULP charges would, assuming the union wins six months from now, be… an order telling the employer to go bargain with them. And that’s about it.
What’s the point?
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
If you fire your employees
you can hire new employees to take their place. It won’t be a seamless transition, but you’d probably be chugging along pretty well in a couple months.
However, as we all know from watching recent quasi-documentaries, if the NFL owners fire Drew Brees, they have to hire Keanu Reeves.
I thought Keanu Reeves was an F B I AGENT!
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but we'd have wiry kickers and sumo wrestler linemen!
Hilarity would undoubtedly ensue!!
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Double standard
When an employer wants to cut wages, it’s just business. When an employee wants to negotiate a wage cut, it’s a stab in the back.
I would suggest to you that your “inclination” is in fact a remarkably counterproductive one, at least with regard to your individual business. I cannot figure out how it would make sense to cut a productive employee just because they had the temerity to want to know how the business is running.
Not to get all Marxist on the thread, but this seems like a classic example of behavior that reflects class interests rather than individual interests.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
Also, business in the NFL is certainly not down, at all, in the past few years. I think this is one reason why it’s hard to understand their cry for more money, when they signed up to this agreement five years ago at a time when revenues were lower than they are today.
Also, the negotiated TV payments during a lockout just scream bad faith.
The judge's decision gave the players a HUGE PR boost, without question
It made the league look incredibly cynical.
"We don't want our people to be preoccupied with seminude, crazy men jumping up and down who are chasing an inflated object," said Sheik Mohamed Osman Arus, head of operations for the Hizbul Islam insurgent group.
I think you have to put the onus on the owners to bring the league back...
Because the owners are the ones who both sought the initial changes to the Collective Bargaining Agreement AND locked the players out. Remember – this isn’t a strike, it’s a lockout – the players can’t come back to the teams unless the owners allow them to return.
It’s also the owners who are asking the players to take pay cuts to save the league, without indicating any proof that any teams in the league are in any sort of financial danger.
It’s also the owners who want the players to play two extra regular season games without any raise in pay or health benefits.
If you want to rely on a bullsh*t “millionaires v. billionaires” dichotomy, so be it, but it’s not only patently false but gives the owners way too much credit.
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I feel like the players are winning
at least as much as anybody can win this P.R. war. I feel like the majority are just going to say ‘screw ’em all’ and tune out. Like Twist, I’m pretty biased in favor of the players.
I mean, let’s consider the facts here: We have a system that is wildly successful. Players and owners are both making money hand over fist, even during the worst economic downturn in 80 years. It strikes me as a system that is obviously mutually beneficial. And yet the owners want to opt out to make even more money for them, but not the players? While simultaneously advancing a proposal that will increase the injury risk to players while claiming to care about their health at the same time? Yeah, that’s a bunch of B.S.
And it’s not like the owners are a bunch of doctors that got a degree, started their own small business and actually ran some risk. As far as I know most of them either inherited their teams, or bought them after they were already independently wealthy, then made money on the backs of the players and/or the taxpayers who payed for stadiums.
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Rather ironically, with the death a few years back of Lamar Hunt and most (all?) of the other AFL pioneers, that leaves Al Davis as one of the most sympathetic owners from this perspective. Unlike the bulk of his colleagues in today’s NFL, Davis is a true risk-taking entrepreneur who stuck his financial neck on the line to invest in a very risky enterprise of uncertain value. He didn’t buy an already established icon a la Jerry Jones; he built that icon himself.
Go Bears!
by California Pete on Mar 14, 2011 8:41 PM PDT up reply actions

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