Revenue Sharing.

[Defensewins]

Originally Posted by Daseal

Could someone explain this to me a bit? From what I understand the teams that make more money (Redskins, Cowboys, Raiders, etc.) have to share money with teams that don't? To me this doesn't make sense at all. Owners like Snyder get crucified for being a money hungry wolf, then is forced to share his money? He spends a lot of money marketing and making the skins have mass appeal -- yet for some reason has to share his income with a team that doesn't work so hard.

Is it simply to make it so poor teams fill the salary cap and keep the league competitive? I just don't understand why successfull owners, at least in the income department, are forced to help owners who aren't nearly as good.

I agree with your concern with this system, there is no incentive for the poor teams to be more lucrative and perform on the field.

The NFL's complicated economics works like this:

The NFL is making about $5.2 billion in revenue per year. Every owner starts out with nearly $100 million a year each from national television and radio contracts and national sponsorships. In addition they get one-third of ticket revenue from each game played, which is pooled and redistributed equally among all teams. The clubs also receive equal portions from a 12 percent royalty on every NFL-branded piece of merchandise. In all, about $3 billion of the $5.2 billion pot is shared equally.
Under the current collective bargaining agreement, which expires at the end of the 2007 season, an annual ceiling is placed on player payrolls of about 65 percent of defined league revenues. So even if Snyder makes more money, he cannot spend it on players salaries. After the $100 million distribution from the league, teams are largely on their own.
Because Snyder is a smart at generating additional revenue, the Redskins' annual revenue has increased from more than $100 million a year when Snyder took over the team in 1999 to around $245 million. So this proves there is no correlation between high-revenue teams and winning percentage. And no correlation between salaries paid and winning percentage.

My major problem with this system is seeing cheap teams like the Cardinals perform so poorly on the field and the owner is a cheap lazy SOB. But yet he is pocketing millions and under spending by $10m on players salaries. Then he complains when his stadium is empty. He is creating the problem. He has not incentive to improve, because the leagus is subsidizing his team. Hard working owners like Snyder are paying his salary and bills.