FanPost

the nfl revenue model is truly f***ed up


the more i think about it, the crazier it gets. i have been saying this all along but i never really put it into numbers. then i saw this by a cowboy blogger, one.cool.customer and he is dead on:

The way the current labor deal is structured, the following hypothetical example is happening in real life all the time. Say the Cowboys sell the naming rights to Cowboys Stadium for $32 million. Good news for the Cowboys, because they get to pocket all of that money. Bad news for the other teams, because those 32 million count towards the Total League Revenue as defined by the CBA, against which the salary cap is calculated. Effectively, this means that the salary floor for each team just went up by an additional $1 million, because the salary cap and salary floor is determined by the revenues generated by all teams, including the high-revenue teams.

If you’re a low-revenue team like the Buffalo Bills or Jacksonville Jaguars, you don’t like that one little bit, because where the Cowboys just made money, you’re expenses just went up, and there’s nothing you can do about it. Think about that for a minute: every time Jerry Jones has a great idea and increases his revenues, the expenses for all other teams go up. How crazy is that?

"Keeping up with the Joneses" just got a whole new meaning, and keeping up with the high-revenue teams in the NFL could become (and likely already is) a matter of life or death for a couple of franchises and markets in the coming years.

 In other words the cowboys are getting to keep all of their luxury box revenue and naming rights, local revenue, etc. which they are entitled to. that part is fine as this is the way capitalism works. but when you make the other teams pay their players more because you made more that is insane, this is anti-revenue sharing because you are essentially subsidizing the cowboys profits or any other team that takes in unshared revenue. that is a double whammy to the low revenue teams.

think about it this way, the average team in 2009 had average revenue (net of some offsets) of $250.5mm but the cowboys had $420mm in revenue. not all of the $170mm is unshared revenue but we will just use that number b/c i have no better one. so of $170mm in revenue the salary cap went up by $5.3mm. so the steelers payroll was inflated by $5.3mm but got no revenue to cover it while the cowboys payroll went up only $5.3mm and they got $170mm to cover it.

they may have to address this in the current CBA b/c it is unquestionly the real problem behind this whole lockout. even if it is not addressed in the current CBA there is no way it will not come to a head in the next 3-5 years. 

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

Join Behind the Steel Curtain

You must be a member of Behind the Steel Curtain to participate.

We have our own Community Guidelines at Behind the Steel Curtain. You should read them.

Join Behind the Steel Curtain

You must be a member of Behind the Steel Curtain to participate.

We have our own Community Guidelines at Behind the Steel Curtain. You should read them.

Spinner

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.

tracking_pixel_9341_tracker