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Owners pull plug on $100M revenue sharing program

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  • Owners pull plug on $100M revenue sharing program

    http://sports.espn.go.com/nfl/news/story?id=4718965

    Not good news for smaller market teams.
    "Compadres, it is imperative that we crush the freedom fighters before the start of the rainy season. And remember, a shiny new donkey for whomever brings me the head of Colonel Montoya."

  • #2
    what was that programm?

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    • #3
      Huge deal here. Basically, the richer teams (Cowboys, Redskins, etc,) would all give parts of their revenues to smaller market teams (Packers, Jaguars, etc) to keep every team with enough money to hit the cap.

      That is gone, so the small market teams may have trouble hitting the cap and may have to lower contracts or release players. If the NFL goes uncapped, it will be monstrous.


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      • #4
        Originally posted by Shane P. Hallam View Post
        Huge deal here. Basically, the richer teams (Cowboys, Redskins, etc,) would all give parts of their revenues to smaller market teams (Packers, Jaguars, etc) to keep every team with enough money to hit the cap.

        That is gone, so the small market teams may have trouble hitting the cap and may have to lower contracts or release players. If the NFL goes uncapped, it will be monstrous.
        Correct me if I'm wrong, but isn't only a small portion of that revenue sharing now gone? I mean, it's not an insignificant portion of money, but there still is about 6.4 billion that is being shared yet. But I could be wrong, I don't know the financial workings of the NFL.

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        • #5
          Certain Portions of money is pooled a divided up, say like ticket sales, TV money and other things, this was to help a team like Green bay in a small city compete with the media juggernaut of the New York Market financially.

          The idea behind the revenue sharing is it benefits the league rather than a few markets, Jerry Jones and Dan Snyder were the two against it in the first place, this agreement and the salary cap were the two biggest issues with the CBA, that is still not in place.

          This is either a move closer to getting a CBA or a giant leap away. To me it seems like a Giant leap away, as the sharing was only an issue for a few owners and the labour union only cared how it affected their bottom line.

          I'll have to find my capology thing and re-check it.

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          • #6
            Yeah this is a huge step backwards for the NFL.

            Shared Money:
            • Two thirds of the money in the NFL comes from TV deals
            • All teams receive an equal share of the TV money.
            • Licensed merchandise such as jerseys also provide money
            • “Gate” money is essentially ticket sales. This is split 60/40 between home and visiting teams
            • This means teams love having games against teams popular across the country, playing against someone like Peyton Manning or Steve Smith is good for the home team financially.
            • Some teams try to package these tickets, if you want to see Peyton Manning against your home team, you've got to buy a ticket to see Jon Kitna as well
            • This helps to drive up revenue


            Key Points
            :
            TV contracts and now video game contracts have escalation clauses so from year to year e.g. ESPN has to pay more money to continue to show the Monday night games than the year previous.

            Of all this money a predefined % becomes the salary cap.


            Slightly More Advanced Revenue Sharing

            Revenue sharing between the owners and the players involves a certain percentage of money made by NFL teams being placed into the salary cap to pay players wages. Essentially the division of the money made by a team will decide how much money they can afford to pay the players.

            As the Collective Bargaining Agreements have altered the salary cap amounts so have they altered where the money goes. These agreements are generally accepted by the ownership of some teams and disliked by others, there’s almost never a consensus. Rich owners are happy they can afford to buy better players using money that would otherwise be spent elsewhere. Owners like Dan Snyder for example were happy with the increase in the monetary percentage going into the cap in the 2006 agreement, Due to the fact that the Redskins are almost never below the cap and strongly believe in building through Free Agency rather than the draft. In effect, he's now allowed to give money to players he's already wanting to give them but hasn't previously been allowed to.

            The second portion of revenue sharing involves the sharing of money between teams. Right now the highest earning 15 clubs essentially subsidize the less financially successful bottom 13. This format also requires the highest earning team to pay more than the 13th highest. These forms of agreement are designed to keep the league competitive. Arguing essentially that the Dallas Cowboys wouldn't make X amount of dollars every year if people didn't want to see them fight against other teams (or in recent times, trample). The league needs to be a 15 round, drag out, Rocky Balboa esque fight, not a 2nd round knockout, if it is to continue making money and expanding. What should be noted however is that not all owners feel this way. Jerry Jones for example advocating cutting non-performing owners like you would an underachieving player.



            The previous agreement:
            2006 was the last year in which labor strife seemed imminent. Essentially the NFLPA and their leader Gene Upshaw were demanding 60% of total revenue be given to the players. An increase from what was previously 55.5%. To put that into monetary terms from the year 2005 to 2009 the cap will have seen an increase in 43% (approx), from 85.5 to 123 million dollars.

            It was at this time that the most recent revenue sharing agreement between clubs was also agreed to. Some of this was difficult for owners to swallow. Not only were a lot of owners now having to give more money to players they did or didn't want to pay (remember the minimum salary cap exists as well), they were also having to pay other clubs their money. Understandably, though the deal went through, in large part due to dramatic impassioned speeches from Paul Tagliabue and Al Davis, there wasn't realistically a cohesive agreement. It was more of a “oh if it has to be that way” than a “yes” from most owners. This didn't exactly lay a good frame work for future negotiations.
            The owners don't like the way they're sharing money between the NFL teams. High earning franchise owners are unhappy that their ability to make money within a market is then to the benefit of dysfunctional organizations. On a personality level, most of the newer breed of owners are former cut-throat businessmen who've never heard the word “share” when it came to their profits, let alone with their direct competitors. The low earning organizations are plain and simply unhappy as any money they are receiving is making it hard for them to expand due to the new salary cap and players demands.

            Getting a consensus vote for half the voters to lose a piece of their pie isn't going to happen any time soon either. So they find a place to agree on where to find more money, take it back from the salaries.

            http://draftcountdown.com/forum/showthread.php?t=22933 (full thread with the explanation of the labour crap)

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            • #7
              Well this is awesome

              [/sarcasm]

              by BoneKrusher
              <DG> how metal unseen
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              • #8
                Well, at least we'll get to sign more future probowlers like Danny Amedola, Samkon Gado, and a couple other dudes with the last name Butler who are not named LeRoy.

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                • #9
                  Originally posted by Twiddler View Post
                  Correct me if I'm wrong, but isn't only a small portion of that revenue sharing now gone? I mean, it's not an insignificant portion of money, but there still is about 6.4 billion that is being shared yet. But I could be wrong, I don't know the financial workings of the NFL.
                  Yeah I'm not sure how big a deal this is. As long as the NFL teams are sharing the billions in TV revenue equally, I fail to see how an extra 100 million split between 8-12 teams is going to make a huge difference.

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                  • #10
                    The Raiders will stay in the bottom even after Al Davis dies I guess...

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                    • #11
                      Wow this sucks for the Titans, sucks worse for the Bills


                      Originally posted by bearsfan_51
                      Show me your Wang, if you will.

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                      • #12
                        Does this mean the NFL is turning into MLB?



                        Originally posted by Jurrell Casey
                        I love light skin and white women but my main chick is brown skin

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                        • #13
                          Originally posted by DoughBoy View Post
                          Does this mean the NFL is turning into MLB?
                          Yah basically. The fairness of the drafting system will help out a bit though.

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                          • #14
                            Not good news for raider fans


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                            • #15
                              Originally posted by DoughBoy View Post
                              Does this mean the NFL is turning into MLB?
                              If it goes uncapped, it will end up a lot like the MLB next year. Hopefully the draft doesn't end up anything like the MLB draft.

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                              Originally posted by BaLLiN72
                              i wish NFLDC had something like "wall to wall" where we could see Brodeur and Job's conversations.
                              Originally posted by Job
                              NFLDC would be jizzing itself non-stop.

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