Salary Cap Analysis

[sandtrapjack]

Salary cap is here to stay.

NFLPA President Gene Upshaw has stated publicly that without a new CBA or an extension of the current CBA it would render the 2007 season as a "cap-less" season. He stated emphatically that if that happened there would be a player lockout and a strike would be inevitable.

Biggest hurdle for the CBA right now, and has really always been, revenue sharing. It basically states that teams that bring in the largest revenues, like Washington and Philly, would be forced to share a portion of those revenues with smaller market teams, like Buffalo.

[backrow]

Originally Posted by sandtrapjack

Biggest hurdle for the CBA right now, and has really always been, revenue sharing. It basically states that teams that bring in the largest revenues, like Washington and Philly, would be forced to share a portion of those revenues with smaller market teams, like Buffalo.

And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

[Schneed10]

Originally Posted by backrow

And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

I can go on and on all day long about this topic.

In life, I like capitalism and reaping the benefits of your own labor. But not in sports.

In sports, the nature of the business is to put the most exciting product on the field, and generate more fan interest so that you can charge more for tickets, more for merchandise, and reach more eyeballs which brings in more advertising money. Revenue sharing helps ensure that each team is on equal financial footing so that the only place they are competing against one another is on the football field. If teams are competing against each other financially speaking, the competition shifts away from the football field and into the marketplace. Fans of small market teams will begin to perceive their teams have no chance and their interest wanes. The KC Royals are a perfect example. Major League Baseball can't get much out of that area, financially speaking, because nobody wants to see the Royals because they stink, nobody wants to buy Royals jerseys, and nobody wants to watch them on TV. But look at the KC Chiefs. Same market, but because of revenue sharing they can always field a competitive team. And because of that the fan interest is there in droves. The NFL can market to the entire country because of their revenue sharing plan. MLB is more limited.

[CrazyCanuck]

Originally Posted by Schneed10

In life, I like capitalism and reaping the benefits of your own labor. But not in sports.

In sports, the nature of the business is to put the most exciting product on the field, and generate more fan interest so that you can charge more for tickets, more for merchandise, and reach more eyeballs which brings in more advertising money. Revenue sharing helps ensure that each team is on equal financial footing so that the only place they are competing against one another is on the football field. If teams are competing against each other financially speaking, the competition shifts away from the football field and into the marketplace. Fans of small market teams will begin to perceive their teams have no chance and their interest wanes. The KC Royals are a perfect example. Major League Baseball can't get much out of that area, financially speaking, because nobody wants to see the Royals because they stink, nobody wants to buy Royals jerseys, and nobody wants to watch them on TV. But look at the KC Chiefs. Same market, but because of revenue sharing they can always field a competitive team. And because of that the fan interest is there in droves. The NFL can market to the entire country because of their revenue sharing plan. MLB is more limited.

Amen.

[backrow]

I like STJack! He comes with a bit of "tude" every time, but not nasty or insulting!

I just like throwing the "sand" back at him!

I see your point Schneed10. Don't like it particularly, but I see it.

[sandtrapjack]

Originally Posted by backrow

And I'm sure you would volunteer Jerry's Cowboy millions to be shared!

What ever happened to a novel idea like Capitalism? Or reaping the benefits of your own labor?

Not my point...but as long as you bring it up the Redskins LEAD THE LEAGUE in revenue. They are higher in revenue than Dallas by about 40 million.

So you need to be mentioning Dan Snyders name way before Jerry Jones.

[70Chip]

If the teams go to some sort of Draconian revenue sharing, what would be the motivation for any club to increase its revenues, or to field a winning team at all? If every team in the league ends up in the same place financially, why not just field a bunch of scrubs and wait for the money to roll in from elsewhere.
The stadium naming example is perfect. If Green Bay wants to continue with the name 'Lambeau' thats fine. How are they entitled to any of the money from teams who choose another way. Likewise why should a team that can sell 100,000 seats at a $100 each be penalized for the loyalty of its fans. It feels like the welfare teams are banding together to stick it to the more succesful franchises. They're already being subsidized as it is but they want even more.
Does anyone know exactly where the various owners stand? Is it part of the CBA negotiation or is it seperate? Does the NFLPA have a stand on this issue? Any help would be greatly appreciated.

[shallyshal]

Originally Posted by sandtrapjack

Salary cap is here to stay.

NFLPA President Gene Upshaw has stated publicly that without a new CBA or an extension of the current CBA it would render the 2007 season as a "cap-less" season. He stated emphatically that if that happened there would be a player lockout and a strike would be inevitable.

Biggest hurdle for the CBA right now, and has really always been, revenue sharing. It basically states that teams that bring in the largest revenues, like Washington and Philly, would be forced to share a portion of those revenues with smaller market teams, like Buffalo.

not if they decertify the union. then there would be no lockout.

the league does not want a work stoppage for certain

[MTK]

The NFL is where it is today because of revenue sharing.

[Schneed10]

CBA Update from Pasquarelli (I must say he does a good job covering the business aspects of the NFL)

http://sports.espn.go.com/nfl/column...len&id=2305744

"Indeed, the new league year commences March 1, and free agency begins just two days after that. Without an extension to the CBA, the 2007 season will become a so-called uncapped year, meaning teams will be able to prorate signing bonuses over just four years, the smallest term ever. That will make free agent contracts, along with deals for first-round draft choices, much more difficult to negotiate."

Could it be that the Redskins had the foresight to realize that signing their 2006 first round pick could become difficult, convincing them that it made sense to trade for the rights to select Jason Campbell in 2005? Hard to know if that was their thought process, but if it was, kudos. Good planning.

[70Chip]

"Rumors have been that Tagliabue is poised to move forward with the labor accord, even if it means delaying an internal agreement on revenue sharing among his constituents, but several owners said privately this week they prefer their internecine issues be resolved before they engage NFLPA executive director Gene Upshaw again. The fear among the smaller-revenue teams remains that clubs such as the Washington Redskins, who are paying their offensive and defensive coordinators more than several franchises are paying their head coaches, have gained too big a spending edge."

I have my answer from the hated Lenny P. They're ganging up against us.

[Schneed10]

Originally Posted by 70Chip

"Rumors have been that Tagliabue is poised to move forward with the labor accord, even if it means delaying an internal agreement on revenue sharing among his constituents, but several owners said privately this week they prefer their internecine issues be resolved before they engage NFLPA executive director Gene Upshaw again. The fear among the smaller-revenue teams remains that clubs such as the Washington Redskins, who are paying their offensive and defensive coordinators more than several franchises are paying their head coaches, have gained too big a spending edge."

I have my answer from the hated Lenny P. They're ganging up against us.

On that note, this article says that Upshaw doesn't view it as a roadblock to extending the CBA. Of course he wouldn't because he doesn't represent the coaches, the owners have to decide amongst themselves what to do about this. We'll see what happens with all of this stuff, it seems to be getting more complicated by the day.

http://www.washingtontimes.com/sport...4644-3194r.htm

[lifetimeskin]

Schneed/Canuk,

I am a little confused, we keep talking about this 30% rule. If there is no extension of the CBA, and NO salary cap next year, what does it matter? Couldn't we have a payroll of $200M without a salary cap?

[CrazyCanuck]

Originally Posted by lifetimeskin

Schneed/Canuk,

I am a little confused, we keep talking about this 30% rule. If there is no extension of the CBA, and NO salary cap next year, what does it matter? Couldn't we have a payroll of $200M without a salary cap?

You are correct that with no salary cap our payroll could be as high as we want. However this no-cap environment would only exist in 2007.

The 30% rule has more to do with our cap situation in 2006. The Skins are currently like $20 million over the 2006 cap. We can save about $15 million off our 2006 cap by restructuring a bunch of roster bonuses due to key players. By restructuring we can push a bunch of money to 2007 and subsequent years. Unfortunately the 30% rule would prevent us from doing so, and we'd lose all these potential savings.

So without a new CBA it's gonna be really hard for the Skins to keep their core intact, and make any new free agent signings basically impossible.

[Schneed10]

Originally Posted by CrazyCanuck

You are correct that with no salary cap our payroll could be as high as we want. However this no-cap environment would only exist in 2007.

The 30% rule has more to do with our cap situation in 2006. The Skins are currently like $20 million over the 2006 cap. We can save about $15 million off our 2006 cap by restructuring a bunch of roster bonuses due to key players. By restructuring we can push a bunch of money to 2007 and subsequent years. Unfortunately the 30% rule would prevent us from doing so, and we'd lose all these potential savings.

So without a new CBA it's gonna be really hard for the Skins to keep their core intact, and make any new free agent signings basically impossible.

Ditto.