PDA

View Full Version : Another Informative Article From "It's All Over, Fat Man!"


listopencil
02-01-2011, 11:59 AM
This is an entry regarding the financial side of the NFL. It contains an incredible amount of infomation in my opinion, and relates to the lockout situation. It's not all Broncos realated. But it does affect the Broncos as well as all other NFL teams. Here's a chunk-

I say it doesn’t have all that much value. Maybe it gets a "reasonable buyer" to go to 10 times EBITDA, at the absolute most. I’ll put it to you like this. Let’s say that Pat Bowlen decides to sell the Broncos in the next few years. He has to get $1 billion for the team, because Forbes says that’s what they’re worth. If he can’t get that price, it will fundamentally affect the valuations of the other 31 teams, so he can’t take a discount. It’s kind of like how you get pissed when somebody sells their house 25 grand too low, two doors down from you. Your house value just dropped, and it’s like, thanks a lot, jerk! Well, in the NFL, nobody is going to get pissed; they’ll just decline to approve the sale, as required by the NFL charter, and probably leak a hit piece about the owner to Jason La Canfora, saying that the selling-low owner is senile.

Bowlen wants $1 billion, and he’ll probably get it, and be a winner, but that buyer is a sucker. The aggregate NFL-wide debt-to-crazy Forbes value ratio is presently 17%. The New Guy will probably lever up to 30%, which is as much as the NFL allows for a buyer of a new team. (The word leverage, and other forms like lever, simply means debt.) That means he’ll borrow $300 million. Let’s say he has to make bond payments of 7.5% of that per year. That’s $22.5 million per year, and remember, that comes after EBITDA in the income statement.

The Broncos’ EBITDA was only $22 million last year, and we expect it to be relatively flat, so suddenly, by dramatically overpaying for this football team, the New Guy is actually losing money. The company isn’t making enough income to pay its debt obligations. Even beyond that, let's say that the Broncos improve their EBITDA to something like $35 million, which seems like it could be feasible. When the $22.5 million goes away, and you pay 40% income tax on the leftover $12.5 million, you're left with After-Tax Net Income of $7.5 million. If you divide that $7.5 million into $700 million of equity ($1 billion of value minus $300 million debt), your return on equity is only 1%, which is unacceptable to any business. If you pay 45 times EBITDA, that’s what you get, sucker.


http://www.itsalloverfatman.com/broncos/entry/on-bubbles

listopencil
02-01-2011, 12:02 PM
I'm still going through the article right now. Large scale economics is not my strong suit by any means, so I'm slowly digesting it.

PRBronco
02-01-2011, 12:05 PM
Haha Ted Bartlett is an animal. Looking forward to reading this.

listopencil
02-01-2011, 12:06 PM
Man. Right off the bat (and without a whole lot of deep thought here, lol) take a look at who is in the top ten of that list of teams, and think about who ESPN slobbers all over...

listopencil
02-01-2011, 12:07 PM
Haha Ted Bartlett is an animal. Looking forward to reading this.

Thanks for mentioning the author, that's my mistake for not posting his name as the "quoted by". I'm gonna fix that right now.

schaaf
02-01-2011, 12:10 PM
huh, I wonder why Houston is so high

enjolras
02-01-2011, 12:14 PM
I'm still reading through it, but one quibble so far:

Think, for a moment, though, about a professional football team. They are not publicly traded, and therefore, donít have to follow Generally Accepted Accounting Principles (GAAP). They can basically set up a reserve for anything they damn well please, and reduce their reported earnings accordingly. I could give you outlandish examples, but how about a Reserve for Potential Losses Due to a Future Work Stoppage?

That's very likely not true. Generally when any corporation has a reporting liability to another entity they are (under terms of contract) required to use GAAP. I can't imagine that they are free from a reporting obligation to the players union, so it's really quite likely that they are reporting using general principles. That also matters for taxes as well.

*edit: He makes the claim that they're not reporting to the Union, which would really surprise me. */edit*

*edit 2: Otherwise I really can't find much to pick on here. I think he's discounting the value of the luxury item that is owning an NFL team. I'd argue that folks like Dan Snyder aren't in this for profit really. That certainly affects the valuation.*/edit"

listopencil
02-01-2011, 12:16 PM
Holy ****, Ted Bartlett is blowing my ****ing my mind with this stuff.

Beantown Bronco
02-01-2011, 12:37 PM
*edit: He makes the claim that they're not reporting to the Union, which would really surprise me. */edit*


It's true. The union has confirmed this in their arguments. They keep asking the owners to "open their books" and prove they're not making money.

listopencil
02-01-2011, 12:41 PM
Iím sure that the NFLPA knows that theyíre going to eventually have to accept the additional games, because finding more profit is an absolute must for the NFL, as weíve discussed. The union is clearly in a defensive posture, and their challenge will be getting all that they can of the incremental television and gate revenue for the two games, while maintaining the status quo on the other 16. (On Monday, Judy Battista of the New York Times wrote a similar thought, that the NFLPA has quietly accepted the 18 game schedule (http://www.nytimes.com/2011/01/31/sports/football/31labor.html?_r=1). Her article is pretty solid, and worth reading, although it's over-focused on short-term issues.)


Chances are, whatever incremental revenue that the NFLPA gets will come in the form of additional roster spots, to make up for injury-based attrition during the longer season. I could see rosters move from 53 to 57 players, and active rosters go from 45 to something like 48. NFL players actually miss a much smaller percentage of games due to injury than the players in any other major sport, so I donít get too worked up about the rhetoric around increased injuries. I basically consider it to be posturing, in the interest of taking some of the new revenue on the deal.


I'd like to see the rosters even larger, say 65 with 50 active.

Mediator12
02-01-2011, 12:43 PM
I'm still reading through it, but one quibble so far:



That's very likely not true. Generally when any corporation has a reporting liability to another entity they are (under terms of contract) required to use GAAP. I can't imagine that they are free from a reporting obligation to the players union, so it's really quite likely that they are reporting using general principles. That also matters for taxes as well.

*edit: He makes the claim that they're not reporting to the Union, which would really surprise me. */edit*

*edit 2: Otherwise I really can't find much to pick on here. I think he's discounting the value of the luxury item that is owning an NFL team. I'd argue that folks like Dan Snyder aren't in this for profit really. That certainly affects the valuation.*/edit"

It's not a claim, the NFLPA is crying like a baby to see the NFL's actual financials. In the recent past, NFL teams were tax write-offs for very wealthy people. The NFL has only recently been a solvent league capable of sustaining itself alone. The NFLPA could give a crap though, they want them to show them their actual numbers so they can cook the books and make it look like the owners are actually worth billions when in fact, they are not that good of a return on an investment.

listopencil
02-01-2011, 12:50 PM
Wow, the idea he puts out about allowing players to become UFA after two years if their respective team allows it to happen is very interesting. I like it, and I like what it would do to the agents. Sounds great to me.

bronclvr
02-01-2011, 12:51 PM
I tend to agree with enjorlas, that they would/should be using GAPP, but furthermore I would expect the Books to be audited-I would think the NFL and the City of Denver would require it. If not, Garbage in, Garbage out. I guess I don't understand why the NFLPA has the right to see anything-they aren't Owners or ShareHolders.

It doesn't matter whether or not they are making money-it's none of their business-the Owners are gonna win this one-

listopencil
02-01-2011, 12:55 PM
Damn. Player's dads as agents is starting to sound like a better idea...

Beantown Bronco
02-01-2011, 12:57 PM
I'd like to see the rosters even larger, say 65 with 50 active.

The owners are already struggling with their revenue to expense ratio. If the $20 mil profit figure from the article is correct, imagine the additional expenses associated with another 15 full time players. That would be more than $20 mil, even if they were all scrubs.

baja
02-01-2011, 01:04 PM
Owning a NFL team has never been a great business. It's more of a rich man's play thing. If your in NFL ownership to make money you have chosen poorly.

willyallthewei
02-01-2011, 01:06 PM
Just read the excerpt but i don't understand: 1.) Why he NEEDS to take out a loan, when there seems to be many other options 2.) why that loan has to be at 7.5% when it will be secured against an NFL team 3.) why the tax rate is 40%, and finally 4.) there are companies with negative EBITAs (this website that everyone goes on to spy on each other, was in the red until 2009) that people would pay a lot more for than the Broncos.

In short, I don't think this guy has a clue as to what the hell he is talking about.

Rohirrim
02-01-2011, 01:09 PM
Reminds me of the film industry. Whenever the actors go to the producers they're always like, "What? Money? We didn't make any money on that picture."

willyallthewei
02-01-2011, 01:10 PM
Reminds me of the film industry. Whenever the actors go to the producers they're always like, "What? Money? We didn't make any money on that picture."

Hollywood has a very very unique business model (or some would say not so unique). Motion pictures are designed to lose money, but the parent corp makes money.

listopencil
02-01-2011, 01:17 PM
The owners are already struggling with their revenue to expense ratio. If the $20 mil profit figure from the article is correct, imagine the additional expenses associated with another 15 full time players. That would be more than $20 mil, even if they were all scrubs.

I'm thinking the actual salary cap would still be a fluid representation of available revenue.

Tombstone RJ
02-01-2011, 01:27 PM
Long read, but very informative. I love that Ted understands basic economics and an idiot like Bill Maher is well and idiot like Bill Maher. Ted compares the NFL to a cartel in how it operates. Maher sees socialism in his twisted idiot brain.

Oh Bill, keep being a moron..

listopencil
02-01-2011, 01:30 PM
Just read the excerpt but i don't understand: 1.) Why he NEEDS to take out a loan, when there seems to be many other options

I don't know, I think he is assuming the new buyer will use whatever means the NFL allows to lower the amount of money he has to come up with up front.

2.) why that loan has to be at 7.5% when it will be secured against an NFL team

I have no idea how lenders come up with % they use for loans. I assume the lender is going to consider the profit margin of the business when figuring out how much the borrower can pay back.

3.) why the tax rate is 40%


More money involved means higher % from what I understand. Wealthier people, who make larger transactions, pay higher % taxes on those transactions.



and finally 4.) there are companies with negative EBITAs (this website that everyone goes on to spy on each other, was in the red until 2009) that people would pay a lot more for than the Broncos.

In short, I don't think this guy has a clue as to what the hell he is talking about.

Could be. Can you name some? I really don't know what you are talking about here and I want to try to understand it.




I'm absolutely NOT claiming to be able to understand all the financial ins and outs of his article. Can you elaborate on your comments a bit?

SonOfLe-loLang
02-01-2011, 01:48 PM
Long read, but very informative. I love that Ted understands basic economics and an idiot like Bill Maher is well and idiot like Bill Maher. Ted compares the NFL to a cartel in how it operates. Maher sees socialism in his twisted idiot brain.

Oh Bill, keep being a moron..

Maher was making an overall point. Obviously, the NFL isnt popular because it has some socialistic policies, but the entire idea of revenue sharing is very socialistic. Its the strong supporting the weak in hopes for a greater good. And for the NFL, it works.

SonOfLe-loLang
02-01-2011, 01:49 PM
Reminds me of the film industry. Whenever the actors go to the producers they're always like, "What? Money? We didn't make any money on that picture."

yeah, well thats more because bonuses wont kick in. Often times percentage of net is negotiated into deals.

willyallthewei
02-01-2011, 01:53 PM
I'm absolutely NOT claiming to be able to understand all the financial ins and outs of his article. Can you elaborate on your comments a bit?

Hey man.

Okay well first off I didn't read the article before, and I just scanned it now, and I'm going to retract what I said about the guy not knowing what he is talking about, he's trying to simplify it, albeit i still think he left things out either intentionally or unintentionally.

To elaborate on my questions:

1.) Leverage does not mean loans. Once a loan is paid back, the owner has 100% ownership, but if the NFL allows for 30% leverage, then without knowing anything else, I'm assuming he can issue non controlling shares of his company to other people (John Elway who would obtain part ownership, for example). In that scenario he does not have to pay a premium (7.5%) each year.

2.) 7.5% is in the area of how much a student has to pay for their loans, thats a lot. Home buyers generally pay less on their mortgages than other loans because the mortgage is a loan that is "secured" by your home as collateral (of course, you're not secured, its the bank whos secured when they come and foreclose it for sale ;)). In this case, the collateral is likely the assets of an NFL football team that is not only solvent but making money. 7.5% sounds way too high.

3.) There's a lot of ways to get money out of a franchise: dividends, shares, salaries. Tax is determined by the way the entity is structured. I don't know how an NFL team is structured, but I am as curious as you to know why he thinks 40% should be the number, or how it should be taken into account, because we don't know what the owner would do with the net profit, or if and how he would extract it.

4.) I was talking about Facebook, but Facebook is not unique, plenty of companies with negative EBITAs, EBITDAs, are worth more than $1 Billion. He very quickly covered the concept of future cash flows. To accountants, they don't draw models for this stuff, to a finance guy, the future is everything.

Finally, I have no idea of the intricacies of owning an NFL franchise, there may be subsidiary benefits that can be valued by someone who knows the industry. Perhaps most NFL teams own several corporations that can pump revenue out of it, making the final owner money, without it showing on the team's books,these practices are not uncommon and are used to minimize legal liability exposure and tax.

Tombstone RJ
02-01-2011, 02:00 PM
Maher was making an overall point. Obviously, the NFL isnt popular because it has some socialistic policies, but the entire idea of revenue sharing is very socialistic. Its the strong supporting the weak in hopes for a greater good. And for the NFL, it works.

The NFL is run like a cartel, much like OPEC. But it's operated in the free market. That's not socialism, at most that is collusion. Also, I had no idea the Health Insurance Industry is also a cartel, yet congress is not trying to break up this cartel, wonder why?

This is how stupid our congress is. There's a very simple way to bring down the cost of health insurance, break up the cartel. Does congress do this? Nope, instead it creates more government to really **** everything up.

Congress and the executive branch (and the judicial branch) all need to be kicked out of Washington.

Mediator12
02-01-2011, 02:03 PM
Maher was making an overall point. Obviously, the NFL isnt popular because it has some socialistic policies, but the entire idea of revenue sharing is very socialistic. Its the strong supporting the weak in hopes for a greater good. And for the NFL, it works.

Except that it is exactly the opposite of socialism, it's price fixing! Bill Never needs facts, just supposition ;D

The cartel methodology is exactly why teams can remain competitive even when certain teams are losing money hand over fist on new debt. They inflate values to keep prices high and attract interest while agreeing to share primary revenue streams. As for the NFLPA's guru's articles, they are quite hilarious to me. They ignore the elephant in the room (the fact owners need enhanced revenues) as to why we are even having this new CBA and simply write the to lowest common denominator and cry woe is me!

SonOfLe-loLang
02-01-2011, 02:15 PM
The NFL is run like a cartel, much like OPEC. But it's operated in the free market. That's not socialism, at most that is collusion. Also, I had no idea the Health Insurance Industry is also a cartel, yet congress is not trying to break up this cartel, wonder why?

This is how stupid our congress is. There's a very simple way to bring down the cost of health insurance, break up the cartel. Does congress do this? Nope, instead it creates more government to really **** everything up.

Congress and the executive branch (and the judicial branch) all need to be kicked out of Washington.

Government doesnt do this because these corporations are running government. If the universal system was instituted in the 60s/70's, this would obviously never be an argument. Its now too big and the country will go down the ****ter.

And Cartel or no Cartel, obviously the NFL isnt a socialist system (Green bay packers aside..who have lots of socialistic value), the idea of revenue sharing is socialistic at its core, in the sense that you have 32 independently owned entities that share revenue equally in order to solidify strength as a whole. Because of revenue sharing, the poor never fall too far behind, and for football, it preserves competition within its own organization (not as a money making body in the greater american economy). This idea is a socialistic idea, im not saying the NFL is a socialist institution

willyallthewei
02-01-2011, 02:15 PM
Maher was making an overall point. Obviously, the NFL isnt popular because it has some socialistic policies, but the entire idea of revenue sharing is very socialistic. Its the strong supporting the weak in hopes for a greater good. And for the NFL, it works.

Revenue sharing is an concept that is commonly tied to Socialism, yes. But by that logic, is a father who pays for his kids college tuition practicing socialism?

Maher's analogy focuses on the interaction between entities, but ignores the characteristics of those entities. Socialism is generally a term used to describe interaction between a state and its citizens.

He could always extend the definition, I guess.

SonOfLe-loLang
02-01-2011, 02:23 PM
Revenue sharing is an concept that is commonly tied to Socialism, yes. But by that logic, is a father who pays for his kids college tuition practicing socialism?

Maher's analogy focuses on the interaction between entities, but ignores the characteristics of those entities. Socialism is generally a term used to describe interaction between a state and its citizens.

He could always extend the definition, I guess.

Well in this sense he's saying the entity of the NFL is the state, the teams are the citizens. It was a very loose analogy

listopencil
02-01-2011, 02:30 PM
Hey man.
....



Cool, thank you. That did help me better understand what you were saying.

OBF1
02-01-2011, 02:30 PM
Excellent...long read. Alot makes sense and I hope he is right about his "Time table" for acceptance of a new CBA

Rohirrim
02-01-2011, 02:42 PM
Maher was making an overall point. Obviously, the NFL isnt popular because it has some socialistic policies, but the entire idea of revenue sharing is very socialistic. Its the strong supporting the weak in hopes for a greater good. And for the NFL, it works.

When the NFL uses that model to keep weak market teams in business, it's a beneficial business cartel. If the government does it to give health care to the poor, it's socialism. I don't see why so many have such a hard time appreciating the joke. ;)

kappys
02-01-2011, 03:06 PM
Hey man.

Okay well first off I didn't read the article before, and I just scanned it now, and I'm going to retract what I said about the guy not knowing what he is talking about, he's trying to simplify it, albeit i still think he left things out either intentionally or unintentionally.

To elaborate on my questions:

1.) Leverage does not mean loans. Once a loan is paid back, the owner has 100% ownership, but if the NFL allows for 30% leverage, then without knowing anything else, I'm assuming he can issue non controlling shares of his company to other people (John Elway who would obtain part ownership, for example). In that scenario he does not have to pay a premium (7.5%) each year.

2.) 7.5% is in the area of how much a student has to pay for their loans, thats a lot. Home buyers generally pay less on their mortgages than other loans because the mortgage is a loan that is "secured" by your home as collateral (of course, you're not secured, its the bank whos secured when they come and foreclose it for sale ;)). In this case, the collateral is likely the assets of an NFL football team that is not only solvent but making money. 7.5% sounds way too high.

3.) There's a lot of ways to get money out of a franchise: dividends, shares, salaries. Tax is determined by the way the entity is structured. I don't know how an NFL team is structured, but I am as curious as you to know why he thinks 40% should be the number, or how it should be taken into account, because we don't know what the owner would do with the net profit, or if and how he would extract it.

4.) I was talking about Facebook, but Facebook is not unique, plenty of companies with negative EBITAs, EBITDAs, are worth more than $1 Billion. He very quickly covered the concept of future cash flows. To accountants, they don't draw models for this stuff, to a finance guy, the future is everything.

Finally, I have no idea of the intricacies of owning an NFL franchise, there may be subsidiary benefits that can be valued by someone who knows the industry. Perhaps most NFL teams own several corporations that can pump revenue out of it, making the final owner money, without it showing on the team's books,these practices are not uncommon and are used to minimize legal liability exposure and tax.

I think overall this is a solid article.

1) The question is how is the author using leverage - I suspect he is using it to suggest debt/lien against a corporation being limited to 30% rather than to suggest that the "owner" must maintain 70% of the shares - just an assumption though

2/3) 7.5% and 40% are probably way to high - but he mostly sticks with EBITDA during the article so it doesn't impact the overall gist of what he is saying too much. Very little comment on net profits.

4) He does cover this point to an extent by claiming that the NFL doesn't have much of a way to grow profits - they have been unsuccessful at marketing the NFL beyond the USA. Facebook is valued because of its potential future earnings that could rise dramatically - in the article the author outright states he doesn't think the owners have any real revenue generating options besides extra games.

listopencil
02-01-2011, 04:10 PM
Other than the financial issues-something finally happened this last season that I had been waiting for, and I didn't see much about it. We had a team go undefeated in its division but miss the playoffs. I know that the Raiders were a crap team in a crap division, but it did happen. I know we also had a team make the playoffs with a losing record, but they actually beat the defending Superbowl champs so it was suddenly kind of a non issue.

It's something I noticed immediately when they realigned the divisions. That a team could go 6-10, undefeated in its division, and another team could go to the playoffs at 10-6 while losing every division game. I understand that the playoffs are about the two best-in-conference teams eventually meeting up, but it just feels wrong to me. Division games have lost the sense of impact. McD fist pumping after we beat the Pats to go 6-0 his first year annoyed some people but it shows he knows what the newer alignment is all about.

Now I see this rumor of an 18 game season and I am intrigued. I doubt that the NFL would do it but this could set up some epic divisional football. I'm thinking something like this:

12 games within your division. 2 home and 2 away each. Spread them out as evenly as possible over the season to minimize the effects of seasonal weather and balance out how "team momentum" changes over the course of the year.

3 games against the teams that finished with the same rank as you in their respective divisions, in your conference. Say we finish 2nd, we play the 2nd place teams in the three other divisions of our conference.

3 games against the teams that finished with the same rank as you in their respective divisions, in the opposite conference, dissimilar divison. That is, for the Broncos it would be NFC North/South/East

2 Preseason games against opposite conference, similar division. We'd play the NFC West in the Preseason. Team match ups could rotate, or be based on geographic proximity. Or they could also be based on ranking. 1st and 2nd place teams play against each other, 3rd and 4th ranked teams could play against each other.



I think it would be fun.

HAT
02-01-2011, 04:27 PM
As much as I like rivalry weeks...I think 12 would be way to much. I could dig 3 each though. (Alternating HFA)

9 Division games
4 vs. a specific NFC division on a rotational basis
4 vs. another AFC division same as above
1 'flex' game every year where they try to find a compelling match-up with some sort of tie-in that the fans would want....How great would a Broncos-Bears game been in 2009?

SoCalBronco
02-01-2011, 10:10 PM
I spent a good chunk of time and read the whole thing. And yes...Ted Bartlett is an animal. I enjoyed the Peter King lines, too. :)

Mountain Bronco
02-02-2011, 11:05 AM
Hey man.


2.) 7.5% is in the area of how much a student has to pay for their loans, thats a lot.

Really? My student loan is 1.5% and my wifes is 3.2% and I have never heard of a student loan over 5%. Student loans are typically very cheap and actually provide a a good measure of security for the lender if they are federal student loans.

Anyway, there are to many assumptions that the article makes and all the subsequent posters make to actually evaluate this. Assumptions are never a good way to evaluate anything and with the number of assumptions he makes this is pure speculation and nothing more. Interesting though.

Mountain Bronco
02-02-2011, 11:21 AM
Went and looked at student loan rates and they are actually pretty high right now (anywhere from 5.8 to 8.5%) though a lot have gradually lowering rates as you make payments on time, automatic withdrawal etc..., but still much higher than when I borrowed. Mine stared at 3.2 and went down to 1.5%.

Suprised me a bit, but it has been 8 years since I borrowed in that arena.

Tombstone RJ
02-02-2011, 02:17 PM
Government doesnt do this because these corporations are running government. If the universal system was instituted in the 60s/70's, this would obviously never be an argument. Its now too big and the country will go down the ****ter.

And Cartel or no Cartel, obviously the NFL isnt a socialist system (Green bay packers aside..who have lots of socialistic value), the idea of revenue sharing is socialistic at its core, in the sense that you have 32 independently owned entities that share revenue equally in order to solidify strength as a whole. Because of revenue sharing, the poor never fall too far behind, and for football, it preserves competition within its own organization (not as a money making body in the greater american economy). This idea is a socialistic idea, im not saying the NFL is a socialist institution

There are no "poor" among the NFL owners. All the teams contribute financially. This model simply cannot be applied to the general society, period.

And yes, I agree. The Health Insurance Industry is in bed with Washington DC and this is why the fed gov fails, over and over and over.

El Minion
02-02-2011, 02:56 PM
I think overall this is a solid article.

1) The question is how is the author using leverage - I suspect he is using it to suggest debt/lien against a corporation being limited to 30% rather than to suggest that the "owner" must maintain 70% of the shares - just an assumption though

2/3) 7.5% and 40% are probably way to high - but he mostly sticks with EBITDA during the article so it doesn't impact the overall gist of what he is saying too much. Very little comment on net profits.

4) He does cover this point to an extent by claiming that the NFL doesn't have much of a way to grow profits - they have been unsuccessful at marketing the NFL beyond the USA. Facebook is valued because of its potential future earnings that could rise dramatically - in the article the author outright states he doesn't think the owners have any real revenue generating options besides extra games.

I think that is why the owners are squeezing the players to take less money, they have reached market saturation and the only revenue growth is nominal. Marketing internationally really hasn't worked as planned, e.g NFL Europe. Time to cut into players salaries to squeeze more profit, since outsourcing pro football players is not an option.

SonOfLe-loLang
02-02-2011, 03:12 PM
There are no "poor" among the NFL owners. All the teams contribute financially. This model simply cannot be applied to the general society, period.

And yes, I agree. The Health Insurance Industry is in bed with Washington DC and this is why the fed gov fails, over and over and over.

So youre claiming all NFL teams would generate the same revenue if there were no sharing? Talk to the MLB

willyallthewei
02-02-2011, 08:12 PM
Really? My student loan is 1.5% and my wifes is 3.2% and I have never heard of a student loan over 5%. Student loans are typically very cheap and actually provide a a good measure of security for the lender if they are federal student loans.

Anyway, there are to many assumptions that the article makes and all the subsequent posters make to actually evaluate this. Assumptions are never a good way to evaluate anything and with the number of assumptions he makes this is pure speculation and nothing more. Interesting though.

When did you get that student loan? ;)

EDIT: oh, forgot to add, I was thinking of graduate loans, should've mentioned that!

Mountain Bronco
02-03-2011, 08:30 AM
I consolidated my graduate loan in 2004. As I said above, I was shocked to see how much higher the rates are now.

Mediator12
02-03-2011, 09:01 AM
So youre claiming all NFL teams would generate the same revenue if there were no sharing? Talk to the MLB

No, he is claiming that the league shares the highest revenue sources and that it would not be a model that society could accept without the cartel model I believe.

Mediator12
02-03-2011, 09:25 AM
I am going to say this again, the NFL has just recently been a profitable enterprise. And, it is a highly speculative profit based on overvaluation of individual franchises and the league as a whole. The whole Reason the CBA is being renegotiated is to allow owners a chance to keep franchises in the black in the future. Ted did a great job in showing how overinflated the Franchise values are and how it looks worse in the future.

The perception that the NFL is too expensive by its fans is very high. The perception that the NFL is the strongest professional sports league going is there. The NFL will not open their books to the union, because they do not want the public to know exactly HOW much in trouble they are with all the perceived success of the league. Everything Ted puts in that article is technically speculation, but its true! Releasing their financials to the NFLPA would provide them with leverage over the owners on the perceived strength of the league.

What this has always been all about it the huge amount of REVENUES the players receive each year. They are paid a huge gross amount of 50% of GDR. The players make a ton of money, and the expenses of a Football team are a lot higher than that of other Sports. The roster size, the coaches, staff, and support personnel, and facilites costs are much higher than other sports. In short, despite the huge perceived success of the NFL that the owners want you to think is happening, it is not a very viable financial investment. That is why they opted out of the CBA and are being so aggressive in the lockout discussions.

Mediator12
02-03-2011, 05:13 PM
Here is a good quote from Bob Batterman of the NFL's Outside Attorney's:

Although the players' union knows the NFL's revenues down to the penny, it contends that the league has not been transparent enough about the rising costs that led to the owners opting out in the first place.

Bob Batterman, the NFL's outside labor attorney, told the media that the union isn't looking for "cost," they are looking for the amount of profits the teams are making. There is a difference, Batterman said.

Why not share the profit margins then?

"Because that's never, never solved a labor dispute," he said. "It just ups the rhetoric."

That is all the crying the NFLPA is doing. They want people to know how much the owners are really making and use it as leverage in the NEW CBA. It is a crock and I am glad someone else finally said it!

The players got a whopper of a deal on the last CBA in order to prevent a stoppage, and now they need to sign a much more fair deal for both sides. However, they will fight like lunatics to not "lose ground" from the previous deal no matter that it screwed the owners and lined their pockets.

Good luck! I just hope they all get less revenue to share.