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Old 03-07-2013, 07:43 PM   #114
El Minion
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Join Date: Apr 2005
Posts: 1,771

Originally Posted by El Minion View Post
I think the the reason for the owners locking out the players is the growing imbalance of non-shared local revenue from the high revenue teams, e.g. NY, Dal, and NE, and the low revenue teams, Buf, Cin etc. because of the influence of the shared revenue on the salary cap.

This from Foxworth last year:

On the labor situation, Domonique Foxworth hits the nail on the head
Posted by Gregg Rosenthal on July 25, 2010, 9:16 AM EDT

Ravens cornerback Domonique Foxworth, a player whom many expect to eventually succeed Kevin Mawae as president of the NFL Players Association, recently spoke with a group of reporters at Capitol Hill. (For Redskins fans in the crowd, has a version that includes some comments about coach Mike Shanahan, who originally drafted Foxworth five years ago.) As transcribed by Aaron Wilson of the Carroll County Times, Foxworth summarizes the financial aspect of the situation in a way that the union should print on bumper stickers.

Let痴 take it from them.

It痴 perfect. It痴 beautiful. Sure, the owners won稚 agree. But the two sides are disagreeing on pretty much everything. At a time when the two sides are developing talking points, Foxworth finally has come up with something that the union can use to best attack the league痴 position.

Here痴 the broader context. Foxworth was asked to explain why he believes that a lockout will occur. And here痴 what Foxworth said: 典hey can get more money and we can get less money. Instead of bickering about how to split up the money, it痴 more advantageous and galvanizing for them to say, 銑et痴 take it from somebody else. Instead of fighting with Daniel Snyder and Jerry Jones over revenue sharing, it痴, 銑et痴 take it from them.樗

That last line is the key. As we explained in the wake of the release of the Packers annual financial report, the union has failed (to date) to push the connection between unshared revenues and the league痴 effort to shrink the players piece of the pie. In 2006, the owners agreed to a Band-Aid that 30 of them liked at the time but that most of them now abhor. So with the players now receiving their cut based on total revenues, including the stuff the teams don稚 share, it could be that the permanent fix for the problem of the profits of the low-revenue Bengals being reduced by a salary cap influenced by the high revenues earned by other teams arises not from sharing the unshared revenues but from reducing the labor costs so that the low revenue teams will still earn an acceptable profit.

In other words, 鏑et痴 take it from them.

Foxworth also became passionate when responding to a quote that Foxworth says Pats owner Robert Kraft made during a 2009 interview with HBO痴 Real Sports with Bryant Gumbel. Foxworth claims that Kraft said the owners are taking all of the risk. We vaguely recall Kraft痴 comment; it was made within the confines of the financial risks. But the word 途isk gives the players an opening that none of them, to our knowledge, had previously utilized.

Foxworth utilized the hell out of it.

的知 asking for respect, Foxworth said. 添ou can稚 say I知 not taking risks. That type of thing gets under my skin and pisses us off. Who痴 taking
the real risks and who痴 making the real gains? Robert Kraft is
bringing in millions of dollars and he痴 never had a concussion.
He痴 never tackled anybody. I doubt he痴 had any knee replacements.
It hurts us to hear stuff like that. I would imagine he would
rethink it and I hope he doesn稚 really feel that way. It痴
impossible to say we池e not taking risks. Wes Welker will limp for
the rest of his life and will have arthritis. Tom Brady will deal
with that for the rest of his life. I want him to look those guys
in the eye and say they池e not taking risks.

According to the version of the interview, Foxworth added on the end, 的t痴 infuriating.

Though this point doesn稚 have as much pop as 斗et痴 take it from them because Kraft obviously wasn稚 addressing physical risks, in this game of high-stakes contract poker the slightest slip can be used by the other side. The only real surprise here is that it took the players so long to do it.

But, hey, better late than never. And though Foxworth may be grossly out of touch on a couple of other issues (more on that later this morning), he has done a good job of giving the rank-and-file a quick and easy way to characterize the league痴 objectives.

Instead of taking it from each other, let痴 take it from them.
Domonique Foxworth was right! Now Carolina Panthers owner Jerry Richardson is trying to fleece the public! Handouts to billionaires like Jerry Richardson


Leaked NFL Documents: While Owner Cried Hardship, Carolina Panthers Had $112 Million Profit Over Two Years

Tommy Craggs

In 2010 and 2011, as the NFL prepared for and staged a lockout of its players, Carolina Panthers owner Jerry Richardson was among the hardest of the hardliners, urging his fellow owners to "take back our league" by demanding a more management-friendly collective-bargaining agreement.

Meanwhile, according to an audited financial statement obtained by Deadspin, Richardson's Panthers were making more than $100 million in profit over the fiscal years covering those two seasons.

The statement is for the years ending March 31, 2011, and March 31, 2012. Over the first period, as Richardson argued that the NFL's business model was hopelessly broken and steered the owners toward a showdown to extract more money from the players, the Panthers recorded an operating profit of $78.7 million. The team had gone 2-14 on the field, but Richardson and his partners were able to pay themselves $12 million.

Over the following year, after the owners had won their lockout and reduced the players' share of league revenue from 50 percent to 47 percent, the Panthers brought in $33.3 million in operating profit. Richardson began lobbying for public subsidies to renovate his 17-year-old stadium. The team went 6-10.

The pro football business was very good in Carolina in those two years, even if the pro football wasn't. That much is evident from the document, which can be found at the bottom of the post and which offers a rare look inside an NFL club's books.

Team financials in all sports are closely guarded documents, particularly because so much league business耀tadium deals with municipalities, negotiations with players unions羊elies on obscuring the owners' financial picture. During collective bargaining in 2011, the NFL players union repeatedly asked owners to open their books. They were repeatedly denied.

"These franchises are a license to print money," says Dennis Howard, a business professor at the University of Oregon, who looked over the Panthers' financial statement at Deadspin's request. "This team is pretty damn healthy," he says, and its financial outlook is "very bright," citing the new, owner-friendly collective bargaining agreement and the league's fat new TV contract, signed in 2011, which kicks in next year. Under the terms of that deal, Howard estimates, the Panthers could bring in an additional $60-$65 million in annual TV revenue alone.

Richardson's public posture over the past two years certainly hasn't suggested a man presiding over a twentysomething percent profit margin in one of the NFL's smaller markets. He was management's point person in labor negotiations. A witness told Yahoo's Michael Silver about a March 2010 meeting at which Richardson addressed his fellow owners: "Jerry said, 'We signed a [expletive] deal last time, and we're going to stick together and take back our league and [expletive] do something about it.' He was practically yelling. It was amazing, and it set an incredible tone." In one memorable press conference before the work stoppage, Richardson, now 76 years old, drew a crude pie chart that showed the players swallowing up a preponderance of league revenue.

"I don't think many business schools would say that's a model that's going to sustain itself," Richardson said, claiming that team owners had "a negative cash flow of $200 million."

In 2011 and 2012, however, the cash position of the Panthers was healthy: $8.3 million and $38.4 million, respectively. Assuming Richardson's number has any basis whatsoever, it's likely he was factoring in an accounting sleight-of-hand known as the roster depreciation allowance (more on which later). "If one is searching for a reason for the early termination of the CBA and the lockout in 2011," writes Roger Noll, a sports economist at Stanford, in an email, "financial distress is not it!"

Last fall, the team began drawing up plans for renovating Bank of America Stadium, which was built largely with Richardson's money and which opened in 1996. The Panthers figured renovations would cost $300 million, $200 million of which, they'd hoped, would come out of the public till. Charlotte has been eager to help, to the tune of $144 million. But the state thus far has been less accommodating, and with good reason.

"Based on the team's financial condition, there is absolutely no justification for such a large public subsidy," Howard writes in an email. The financials "show unequivocally that the team has the capacity to finance the improvements on its own. The team could easily pledge a portion of the anticipated increase in TV revenues to finance the debt service for the improvements."

A few other notes about the Panthers' financial statement:

  • Why the big gap in operating profits between 2011 and 2012? The Panthers decided to spend money on talent. Player payroll jumps from $78 million to $100 million, and amortization of player signing bonuses goes from $24 million to $54 million.
  • If we shuffle around the line items on page 5 in the viewer below, we can get a broader sense of where an NFL team's revenue comes from. The Panthers' local revenue揚ame receipts, luxury suites, and so on謡as $95 million in 2011 and $98 million in 2012. (Incidentally, Carolina's ticket prices are among the lowest in the league.) Revenue from the league溶ational TV contract, NFL Ventures謡as $150 million in 2011 and $155 million in 2012. In other words, the league kitty accounts for more than 60 percent of the Panthers' operating revenue. Why is that important? Local money lay at the heart of the lockout. The impetus behind the work stoppage wasn't so much player costs as it was a widening gap among teams in stadium-generated revenue. The lockout, as we've written many times before, was actually an intramural dispute that the owners chose to take out on the players instead. At bottom was a growing imbalance between those clubs with new, revenue-rich, luxury-box-fattened stadiums, many of them built through the league's G-3 financing program, and those in older facilities.
  • Richardson's claim of $200 million in negative cash flow is difficult to fathom, says Howard, who a decade ago had access to profit and loss statements for NFL teams and recalls only two teams, the Arizona Cardinals and the Oakland Raiders, suffering operational losses. One possibility is that Richardson was figuring in the infamous roster depreciation allowance. The RDA is an accounting gimmick whereby a new owner of a sports franchise gets to write off 100 percent of the purchase price of the team over a 15-year period, on the specious logic that a roster depreciates the same way, for instance, that your office's new fax machine does. That tax deduction shows up on the books as an operating expense, even though it's a pretend-loss that exists only in the quirks of the tax code. Thus, Stephen Ross, who purchased the Miami Dolphins for $1 billion, can claim an operational hit of nearly $70 million. "It has a huge impact on the bottom line," Howard says. "You're able to transform a real profit into an operational loss."
  • On page 7 of the viewer, you'll see an $80 million loan repayment in 2011. That's explained on pages 16 and 17. The NFL offers revolving credit to teams at very low interest rates, another perk of ownership.
  • Regarding the $12 million self-payment (page 6, "Distributions to partners"): We don't know if this is typical without access to other teams' financials. But given the Panthers' financial success under Richardson, Howard says, "I think he's extracting his fair share." You can find the team's organizational chart and entity listing here.

Carolina Panthers, 2011 & 2012

[Download as PDF]

Last edited by El Minion; 03-07-2013 at 07:46 PM..
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