Mr. Laz
02-17-2006, 11:51 AM
REVENUE SHARING STILL A BIG ISSUE
http://www.profootballtalk.com/rumormill.htm
Although we're hearing that progress is continuing toward a new CBA without regard to the fact that the owners have not agreed on a plan to expand revenue sharing, it appears based on information we've gathered that the issue remains a major point of contention among the 32 members of the Billionaire Boys Club.
As we understand it, seven teams are adamantly opposed to the notion of sharing revenue beyond the revenue that already is shared: the Eagles, the Patriots, the Jets, the Giants, the Redskins, the Cowboys, and the Texans.
Several franchises are pushing hard for it, with the Jaguars, the Steelers, the Packers, the Cardinals, and the Bengals believed to be among that group.
Though the rest are mainly up in the air on this one, the simple fact is that the seven who want no expansion of revenue sharing need only to recruit two more franchises to block any votes on changing the system, since 24 "ayes" are necessary.
For the "haves," who are realizing local unshared revenues grossly disproportionate to the unshared money earned by the "have-nots," the notion of coughing up the fruits of their labor, creativity, and/or business savvy is highly objectionable. Over the past year, we've heard (and read in published reports) a variety of arguments. For example, the Bengals should sell the naming rights to their stadium in order to generate more income.
More recently, we've heard rumblings along the lines that a popular team like the Steelers should simply raise prices across the board.
So that's the root of the problem. The teams who are making the most money believe that other teams can do the same, if they choose to try. Sharing all revenue can remove the incentive for teams like the Bengals and Cardinals and Jaguars to improve their financial position, since they'd know they'll be subsidized to a certain extent by high-earning teams like the Redskins, Cowboys, and Texans.
The other side of the coin, however, is that as teams like the Redskins continue to reel in huge revenues that aren't shared on a year-in, year-out basis, the competitive balance eventually will be affected, despite the fact that there is a hard salary cap in place.
Even now, the 'Skins are dumping millions into the coaching staff. Over time, the differences will also become increasingly obvious in other expenditures not regulated by a spending limit.
Frankly, we're not sure where we come down on this one. On one hand, businesses shouldn't be penalized for fairly and legitimately enjoying success. On the other hand, the "business" here is much broader than any one team, and a disruption of the competitive balance eventually would hurt everyone financially.
Our guess is that, in the end, nothing will be done until there is solid evidence that the earning disparity is affecting the on-field product. After all, the millions that Bob McNair has earned isn't translating into many Texan wins, and the relatively lack of local cash flow in Pittsburgh hasn't held back the Steelers.
http://www.profootballtalk.com/rumormill.htm
Although we're hearing that progress is continuing toward a new CBA without regard to the fact that the owners have not agreed on a plan to expand revenue sharing, it appears based on information we've gathered that the issue remains a major point of contention among the 32 members of the Billionaire Boys Club.
As we understand it, seven teams are adamantly opposed to the notion of sharing revenue beyond the revenue that already is shared: the Eagles, the Patriots, the Jets, the Giants, the Redskins, the Cowboys, and the Texans.
Several franchises are pushing hard for it, with the Jaguars, the Steelers, the Packers, the Cardinals, and the Bengals believed to be among that group.
Though the rest are mainly up in the air on this one, the simple fact is that the seven who want no expansion of revenue sharing need only to recruit two more franchises to block any votes on changing the system, since 24 "ayes" are necessary.
For the "haves," who are realizing local unshared revenues grossly disproportionate to the unshared money earned by the "have-nots," the notion of coughing up the fruits of their labor, creativity, and/or business savvy is highly objectionable. Over the past year, we've heard (and read in published reports) a variety of arguments. For example, the Bengals should sell the naming rights to their stadium in order to generate more income.
More recently, we've heard rumblings along the lines that a popular team like the Steelers should simply raise prices across the board.
So that's the root of the problem. The teams who are making the most money believe that other teams can do the same, if they choose to try. Sharing all revenue can remove the incentive for teams like the Bengals and Cardinals and Jaguars to improve their financial position, since they'd know they'll be subsidized to a certain extent by high-earning teams like the Redskins, Cowboys, and Texans.
The other side of the coin, however, is that as teams like the Redskins continue to reel in huge revenues that aren't shared on a year-in, year-out basis, the competitive balance eventually will be affected, despite the fact that there is a hard salary cap in place.
Even now, the 'Skins are dumping millions into the coaching staff. Over time, the differences will also become increasingly obvious in other expenditures not regulated by a spending limit.
Frankly, we're not sure where we come down on this one. On one hand, businesses shouldn't be penalized for fairly and legitimately enjoying success. On the other hand, the "business" here is much broader than any one team, and a disruption of the competitive balance eventually would hurt everyone financially.
Our guess is that, in the end, nothing will be done until there is solid evidence that the earning disparity is affecting the on-field product. After all, the millions that Bob McNair has earned isn't translating into many Texan wins, and the relatively lack of local cash flow in Pittsburgh hasn't held back the Steelers.