I just wrote this up and posted it elsewhere, since we've got a few NFL fans here, I figured I'd post it here as well. Be forewarned, I was bored, so its wordy.
NFL owners - greedy?
I’m sure you’ve heard, but the NFL is currently in a dispute with the players’ union, and if it isn’t resolved, there could be a lockout for the 2011 season. Almost universally, media pundits are attacking the owners. They’re calling them greedy. They’re quick to cite statistics to make their case. But are they correct in their assessment?
First and foremost, let’s not act like these are unbiased journalists brimming with integrity. Even when not talking about the labor dispute, you probably don’t hear “integrity” and “sports media” in the same sentence very often, unless its accompanied by something like “lack of”. That aside, the members of the media have a huge stake in this debate. If there’s no NFL season in 2011, they stand to lose a lot of money – a lockout means bad things for ESPN, Sports Illustrated, and company. Keep that in mind when listening to what the media has to say here.
Moving on to the issue at hand. People are quick to attack the owners. Often, its stated how rich they are, and therefore, they shouldn’t want more money. That sentiment in itself doesn’t make any sense. The NFL is a business – a big one. Big businesses don’t exist out of charity. They exist to make money. Just because the owners are wealthy doesn’t mean they should stop trying to be profitable.
In an article on ESPN.com, Rick Reilly expounds about various owners’ wealth – he talks about Paul Allen’s yacht, or Jeffrey Lurie’s mansions. He insinuates by omission that these people got rich off the NFL. That’s simple not the case. Paul Allen was the co-founder of Microsoft, among other business ventures. Lurie was CEO/founder of a movie studio. Jerry Jones was an oil man, the Fords are involved in an auto company you may have heard of, Arthur Blank founded the Home Depot. The list goes on. While there are a few Rooneys and Bidwells that were born into the NFL, the majority of them made their riches in other endeavors, so talking about how wealthy they are has nothing to do with the state of the NFL. Not to mention, with all this character assassination going on, we forget how charitable these guys are. Paul Allen, for example, has donated excessive amounts to public projects in Seattle. I’m sure he’s not the only one.
Another oft-cited statistic is the NFL’s revenue. The pundits cry that the NFL is healthy, its making $9 billion/year. What they leave out is that that number is revenue – not profit. The costs of running an NFL team are very high. Let’s break it down in a little more detail. That number amounts to roughly $280 million per team. The salary cap is set at 60% of revenue - $1bil, meaning that each team’s cap is about $150 million. That leaves the owners with about $130 million. Now, factor in other costs. They have to pay to run the NFL itself (Roger Goodell makes about $10 mil/year himself). They have very high operating costs – think about what it costs to run the stadium. Electricity, water, maintenance, janitors, security, property taxes for a massive structure. Then there’s game-related expenses like equipment, charter jets for players to the games, coaching staffs, trainers and medical staffs. Payments to the union for retiree benefits. None of these things come cheap. While cities often chip in for a new stadium, so do the owners – Jerry Jones financed about $700-$800 million of the new Cowboys Stadium by himself.
So, what does all that come to? Well, we don’t know – its one of the union’s sticking points in the debate. We do know the financials for one team. The Green Bay Packers are publicly owned. They might not be in a huge market, but they are a storied, nationally-popular franchise that hasn’t built a new stadium in ages. Their profits are tumbling – down to $5 million net income in 2010, despite increased revenue. Think about that. The Packers have 5 players that made more money than the entire franchise did in 2010. They could barely give a low 1st round pick a signing bonus with that money. It amounts to a rough profit margin of 1.79% - compare that to Microsoft's 30.84%, Apple's 21.81%, or Target's 4.33% - and they're in retail, which has notoriously slim margins.
Of course this varies from team to team, but just like the players are bargaining collectively, so are the owners. I’m sure the Cowboys, Patriots, and Redskins all have a healthy bottom line, but what about the Bills and the Jaguars? Should their owners just sit back and accept losses? Of course not – these are business men. They are going to fight to make their business profitable. Its not greed, its common sense.
Don’t get me wrong. I’m not siding completely with the owners in this debate. I don’t agree with a lot of Roger Goodell’s revenue-driven changes over the past few years, and I think the 18 games season is a terrible idea. My point here is that you should look a little deeper here. The media is spoon-feeding you biased garbage (shocker!), and trying to demonize the owners as greed-filled monsters that would make Gordon Gekko blush. This is simply not the case. Both sides have valid points to their argument, and since none of us know the full story, we shouldn’t be so quick to point fingers.
NFL owners - greedy?
I’m sure you’ve heard, but the NFL is currently in a dispute with the players’ union, and if it isn’t resolved, there could be a lockout for the 2011 season. Almost universally, media pundits are attacking the owners. They’re calling them greedy. They’re quick to cite statistics to make their case. But are they correct in their assessment?
First and foremost, let’s not act like these are unbiased journalists brimming with integrity. Even when not talking about the labor dispute, you probably don’t hear “integrity” and “sports media” in the same sentence very often, unless its accompanied by something like “lack of”. That aside, the members of the media have a huge stake in this debate. If there’s no NFL season in 2011, they stand to lose a lot of money – a lockout means bad things for ESPN, Sports Illustrated, and company. Keep that in mind when listening to what the media has to say here.
Moving on to the issue at hand. People are quick to attack the owners. Often, its stated how rich they are, and therefore, they shouldn’t want more money. That sentiment in itself doesn’t make any sense. The NFL is a business – a big one. Big businesses don’t exist out of charity. They exist to make money. Just because the owners are wealthy doesn’t mean they should stop trying to be profitable.
In an article on ESPN.com, Rick Reilly expounds about various owners’ wealth – he talks about Paul Allen’s yacht, or Jeffrey Lurie’s mansions. He insinuates by omission that these people got rich off the NFL. That’s simple not the case. Paul Allen was the co-founder of Microsoft, among other business ventures. Lurie was CEO/founder of a movie studio. Jerry Jones was an oil man, the Fords are involved in an auto company you may have heard of, Arthur Blank founded the Home Depot. The list goes on. While there are a few Rooneys and Bidwells that were born into the NFL, the majority of them made their riches in other endeavors, so talking about how wealthy they are has nothing to do with the state of the NFL. Not to mention, with all this character assassination going on, we forget how charitable these guys are. Paul Allen, for example, has donated excessive amounts to public projects in Seattle. I’m sure he’s not the only one.
Another oft-cited statistic is the NFL’s revenue. The pundits cry that the NFL is healthy, its making $9 billion/year. What they leave out is that that number is revenue – not profit. The costs of running an NFL team are very high. Let’s break it down in a little more detail. That number amounts to roughly $280 million per team. The salary cap is set at 60% of revenue - $1bil, meaning that each team’s cap is about $150 million. That leaves the owners with about $130 million. Now, factor in other costs. They have to pay to run the NFL itself (Roger Goodell makes about $10 mil/year himself). They have very high operating costs – think about what it costs to run the stadium. Electricity, water, maintenance, janitors, security, property taxes for a massive structure. Then there’s game-related expenses like equipment, charter jets for players to the games, coaching staffs, trainers and medical staffs. Payments to the union for retiree benefits. None of these things come cheap. While cities often chip in for a new stadium, so do the owners – Jerry Jones financed about $700-$800 million of the new Cowboys Stadium by himself.
So, what does all that come to? Well, we don’t know – its one of the union’s sticking points in the debate. We do know the financials for one team. The Green Bay Packers are publicly owned. They might not be in a huge market, but they are a storied, nationally-popular franchise that hasn’t built a new stadium in ages. Their profits are tumbling – down to $5 million net income in 2010, despite increased revenue. Think about that. The Packers have 5 players that made more money than the entire franchise did in 2010. They could barely give a low 1st round pick a signing bonus with that money. It amounts to a rough profit margin of 1.79% - compare that to Microsoft's 30.84%, Apple's 21.81%, or Target's 4.33% - and they're in retail, which has notoriously slim margins.
Of course this varies from team to team, but just like the players are bargaining collectively, so are the owners. I’m sure the Cowboys, Patriots, and Redskins all have a healthy bottom line, but what about the Bills and the Jaguars? Should their owners just sit back and accept losses? Of course not – these are business men. They are going to fight to make their business profitable. Its not greed, its common sense.
Don’t get me wrong. I’m not siding completely with the owners in this debate. I don’t agree with a lot of Roger Goodell’s revenue-driven changes over the past few years, and I think the 18 games season is a terrible idea. My point here is that you should look a little deeper here. The media is spoon-feeding you biased garbage (shocker!), and trying to demonize the owners as greed-filled monsters that would make Gordon Gekko blush. This is simply not the case. Both sides have valid points to their argument, and since none of us know the full story, we shouldn’t be so quick to point fingers.
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